The Chancellor isn't hugely popular with many of you after his recent Budget and if you are car driver then it is easy to see why.
That's because the most polluting vehicles will face a £950 "showroom" tax that comes into effect from April 2010.
The government is also introducing a new top band for the most polluting vehicles that emit more than 255g of carbon dioxide per km.
However, you can still get a family car or even a 4x4 without paying high car taxes and destroying the planet. Which are both very good things indeed...
Under the new CO2 rules you can buy a BMW 3 series or a VW Golf and you could pay up to £750 in tax...or nothing at all.
Confused? Then join the club!
Put it this way, if you visit your local car showroom after 2010, then you will be faced with a stark choice:
a) buy the sleek petrol model and you'll pay £550 to tax it for the first year.
b) opt for the same car but with a smaller diesel engine, and you'll drive away having paid absolutely nothing in car tax. Welcome to the crazy new world of car taxation as outlined in the new budget.
Budget 2008; the diagnosis
Despite the new car tax plans, it is possible to buy a 4x4 or a people carrier and avoid paying much in the way of car tax by carefully choosing the right model.
Now, under the new car tax regime, the questions you need to ask if you are buying any car (new or used) are; how much carbon dioxide does it emit, and which tax band is it in?
Dear old Darling's budget does away with the old regime that gently pushed you towards buying the least polluting cars. The new structure demands you buy an environmentally friendly vehicle that doesn't spew out huge quantities of carbon dioxide (and kill vast numbers of wildlife...)
Surprisingly this can include 4x4s (no really!) As an example, the Jeep Patriot 2.0 diesel emits 180g of CO2/km and will, from next year, cost substantially less to tax than many family estates.
Click here to see how much tax you'll have to pay after the 2008 budget.
Although the headline-grabbing changes from Alistair Darling don't come into play for another 2 years, if you are thinking of buying a car soon, then you need to factor in these changes ASAP!
How do the changes apply to me?
- In the short term, the big losers are those of you driving large petrol-engined cars; in the next 2 years you will see your annual road tax bill climb by between £100 and £200.
- The real shock will hit you in 2010, when you face the so-called showroom tax; a higher road tax in the first year that reflects the car's CO2 emissions.
- Cars emitting more than 255g of carbon dioxide per km (like the Range Rover Sport and any Ferrari) will come with an £950 bill for the first year's tax; but way short of the £2,000-£5,000 demanded by many environmental groups.
- At the other end of the spectrum, if you buy a new car in 2010 that emits less than 165g of CO2/km will get the first year's car tax for free!
- Bizarrely, this group not only includes most small- and mid-sized cars, but also some quite serious cars. The BMW 3 series 2.0 litre diesel emits just 128g/km, and after the first year the road-tax bill will be just £35 a year. Compare that to a 3-series with a sporty 3.5 litre petrol engine, and the bills are quite different; the first year you will pay £550 and £310 a year from then.
Time to downsize?
- These anomalies will apply across all the manufacturers' ranges of cars, and the new regime seems to favour you if you are happy to downsize or switch to diesel.
- Take the Toyota Avensis estate; by 2010 a petrol 1.8 will cost you £210 a year to tax, while the slightly larger diesel (2.0 litre) will cost £125 a year because it emits less C02.
- In comparison, the tiny Citroen C1 and the like will cost just £20 to tax, from March 2009 onwards.
- If you are buying a used car now, you need to look closely at what you'll be paying to tax your chosen model in the future. Large petrol, automatic MPVs, such as the Volkswagen Sharan, will cost £455 a year to tax from 2009; which would render them unattractive to potential buyers.
Meanwhile, if you own a car that was registered before March 1 2001, you will continue to pay according to engine size. You will pay £120 a year if your car engine is smaller than 1,549cc. Older cars with bigger engines will pay £185 over the next 12 months, and £200 a year for 2009/10.
So, it may sound confusing but it just takes a bit of homework to find out what your car will cost:
a) To work out what you'll be paying to tax your car in the future go to SMMT.co.uk (click on to data services, then CO2, and lastly "search").
b) Key in your car details and it will tell you how much Co2 g/km it emits.
c) Then read across this table to work out what you'll pay.
d) The table, which only affects cars registered after March 2001, shows what you pay this year, and after 2009 when the new banding regime come into effect.
So, while it may appear confusing, don't let it scare you.
If you do a bit of legwork, then you can beat Darling's car tax increase!
Search for new and used cars using BuyYourCar.
Budget 2008: the diagnosis