From Yahoo Finance: 2025-03-31 10:19:00

Vehicle Excise Duty (VED) and First Registration fees will change from April 2025, impacting vehicle pricing, leasing costs, and financing strategies. Road tax rates will rise, with high-emission vehicles facing the most significant increases. EVs will no longer be exempt, with a £10 “showroom tax” in the first year.

EV ownership costs are set to rise with the new tax changes. EV drivers can avoid charges for another year by acting before 31 March 2025, saving £195. Older EVs registered before April 2017 will pay just £20 per year, making them attractive in the used market.

Finance providers should reassess residual value assumptions due to the changes in total cost-of-ownership calculations. Increased first-year VED may reduce demand for high-emission cars and boost interest in lower-emission alternatives, including pre-2025 EVs.

Customers financing new vehicles may benefit from purchasing before 1 April to avoid increased upfront costs. The 2025 VED changes will have key impacts on motor finance and leasing, affecting pricing models and consumer demand.



Read more at Yahoo Finance: key impacts for motor finance and leasing