UK car loan hunters could be hit by new pollution tax

Thu, 23 Mar 2006

Car loan hunters may have to take into consideration the new tax on high carbon dioxide emitting vehicles when looking to finance a new car.

In his budget yesterday, chancellor Gordon Brown announced that cars would be taxed on how much carbon dioxide they emit, with those emitting less than 100grams per kilometre exempt from tax.

This means car loan hunters looking to finance a car producing more than 226g of CO2 per kilometre could face a road tax fee of £210.

However, recent research from AA Personal Loans suggests this new tax could have limited impact on those looking to finance a car. According to a survey of car loan hunters in the UK, the majority said they wanted a high performance practical car, rather than an environmentally friendly model.

The lowest duty rate on a high CO2 emitting car will be £40, but the rates can soar to £210.

Car loan hunters in the UK could use a car loan payment calculator to see if they can afford to pay out for the extra duty on their heavily polluting vehicles. Or they could look to finance a new car that is environmentally friendly.


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