Want to pay nothing in VED road tax? You’ll have to buy an EV. Here are out top 10 tax-free cars under the latest rules

The UK VED road tax system can be full of pitfalls, especially for the unacquainted. If you’re buying a new car, you’ll want to know how much that vehicle is going to cost you on a month-by-month basis, and that can vary wildly depending on which of the car tax bands your new wheels fall into. More often than not, a car’s on-the-road price will include its first year of tax, but after that it’s down to you to pay up every year.

From 1 April 2017, the government introduced new rules which completely shook up the system. Cars which previously cost pennies to tax now face significant annual bills and if you want a vehicle that’s free to tax for the foreseeable future you’ll now need an electric car.

That’s right, gone are the days when you could buy a tax-free car running on conventional fuel. Only zero-emissions vehicles will qualify for that particular privilege, and even then there’ll be something to pay annually on models costing over £40,000, so even hydrogen fuel cell cars pay the taxman for the first few years.

Read more: Auto Express

After a couple of slow performances in previous months, in November, the European passenger plug-in market was back at cruising speed, with +31% year over year (YoY) sales.

There were some 37,500 registrations, pulling the year-to-date (YTD) count to 345,000 deliveries (+34%). In broader context, 2018 EV market share grew to 2.4%, thanks to a 3.2% market share in November.

But if on the surface everything seems to be back to normal, when you separate the fully electric (BEV) and plug-in hybrid (PHEV) powertrains, there are seismic changes. On the BEV side, sales (or I should say deliveries) jumped 96% YoY, the segment’s highest growth rate since July ’14. Fully electrics reached a record 23,000 registrations (61% share of all plug-ins), allowing them to (finally!) surpass PHEVs in the total year breakdown. This is the first that has happened since 2014. Historic month, indeed!

On the other hand, PHEVs continue feeling the sting of the new WLTP standard, with sales down (-14% in November) for the third month in a row, the segment’s worst downward trend since … well, forever. Will PHEVs in Europe recover sometime in the future, or are they going to be swallowed by the upcoming BEV flood?

One thing is certain, BEVs start 2019 with the upper hand.

But the PHEV debacle isn’t equal across all brands. Some automakers (BMW, Mitsubishi, Volvo…) did their homework and continue to thrive under the new rules, leading to some brilliant performances. In particular, the #3 Mitsubishi Outlander PHEV is soaring again.

In November, the top spots didn’t have major surprises since sales were high across the board. Three of the top 5 best sellers last month hit record performances (the i3, e-Golf, and Zoe), while the Outlander PHEV had its best month since 2015. The leader, Nissan Leaf, didn’t have a memorable score simply because Leaf output in the Sunderland factory is limited by the weight of the Qashqai production there. Maybe Nissan should think about sending units from the US to Europe?

Read more: Clean Technica

USED car values fell by 1.7 per cent in December as demand weakened to its lowest since November 2017, according to Cap HPI.

The December used car market saw the usual drop-off in retail and trade demand, with some vendors deciding to hang on to stock and aiming to sell for higher prices in January. Any fall in values, however, has to be seen in the context of an exceptionally strong year overall in 2018.

Electric vehicles showed the strongest average performance with values rising by 0.3 per cent at three years and 60,000 miles. Models such as the Renault Zoe, Nissan e-NV200 and Nissan Leaf continued to be in demand, with prices increasing, while Tesla and BMW models struggled to achieve cap clean prices.

Derren Martin, head of UK valuations at Cap HPI, said: ‘The pattern continues for the more affordable electric cars to be sought after, whereas at the higher end finding buyers is more difficult.

‘As a new year gets under way, there is often a feeling amongst vendors and buyers that prices go up as we enter January. Over the last five years, the average value movement in our Live product during January has actually been a drop of 0.4 per cent.’

Read more: Car Dealer Magazine

Less than 2% of vehicles used by transport department are electric, despite minister’s vow

Chris Grayling has been accused of failing to back up his positive words on electric cars with action after it emerged they account for less than 2% of his department’s car fleet.

The UK transport secretary said the government would “lead consumer uptake” of the cars when he laid out his plan for tackling air pollution with a switch to battery-powered vehicles.

However, he has come under fire for subsequently scrapping grants for plug-in cars, in a move condemned by vehicle manufacturers as “astounding”. Now official figures have revealed that only 29 of the 1,830 vehicles run by Department for Transport and its agencies are electric.

Labour said it was “laughable” that two months ago Grayling had been “bragging” about the DfT’s plans to take on more electric vehicles.

“The Tories’ policies show how little they care about the environment and dealing with air pollution. Chris Grayling’s hypocrisy and failure to get his own department to order more low-emission vehicles is further proof of that,” said Andy McDonald, the shadow transport secretary.

The Maritime and Coastguard Agency and Driver Vehicle and Standards Agency, which carries out driving tests, are the worst performers. Neither has a single electric model among their hundreds of cars.

So far this year, the DfT has bought 10 electric vehicles, including some of Jaguar’s £64,450 well-reviewed I-PACE models. Last year, it bought three. Other popular models in the UK include the Tesla Model S, which sells from £53,500, and the smaller Nissan Leaf, which starts at £21,990.

The government has set itself a target of making a quarter of its car fleet electric within four years, and 100% by 2030. About 2% of new car sales in the UK are of electric models, either fully electric or plug-in hybrids.

Read more: The Guardian

Electric vehicles are expected to become much cheaper over the next two years as stronger residuals make them more attractive to the leasing sector.

Vantage Leasing says it should become cheaper to lease a battery powered car.

There is anticipation of a strong second-hand market for electric vehicles in 2021/22, which will in turn reduce the depreciation cost in a lease payment before then.

“Higher residual values for EVs in coming years due to the anticipation of a second-hand market should also make it cheaper to lease an electric vehicle in the very near future.

“That’s because any enhancement of EV residual values means the depreciation cost in a lease payment will also be smaller,” said James Buttrick from Vantage Leasing.

Registration figures from the Society of Motor Manufacturers and Traders (SMMT) show a dormant EV market, where sales of pure electric vehicles only increased by 1,307 vehicles from 2017 to 2018 year-to-date.

However, supply issues and the switch to WLTP has affected the availability and lead times of many electric and plug-in hybrid cars in the last 12 months.

Read more: Fleet News