Road Tax Problem

[ianharding]

I ordered a new car in Sept 2021 (RAV 4 Hybrid). List price was £39900 or so; I researched it online before test driving and ordering. I made it very clear to the dealership that I would not buy anything with a list price over £40,000, so as to avoid the ridiculous £480 annual road tax from year two on (especially for an economical hybrid). We proceeded on this basis and I placed the order and paid a deposit. Had I been happy to pay this tax, I'd have bought something different.

Anyway, it got built in December and shipped in January, finally arriving mid-February. When i went to sign the registration details, I noticed the list price was recorded as £42,970, pushing me into the high tax bracket. Toyota had increased their prices in February. I remonstrated with the dealership. They said they couldn't do anything, they'd have to try to get DVLA to change it. I'm still waiting. I'm due to collect the car on March 1st. I should add I have dealt with 4 different people at the dealership, there was no continuity. They should have spotted this and dealt with it before I had to point it out to them.

This could cost me another £1675 if I keep the car 6 years. So who is liable for the cost if DVLA won't play nice - Toyota? The Dealership? I'm sure I'm not the only person facing this issue.

[ColinB]

I've heard of several people on here who've had this problem, unfortunately there's nothing you can do. The tax is set at the list price with extras when first registered, not when ordered. It doesn't make sense but that's the rules. 

[FROSTYBALLS]

The list price at the time of the first registration is used to determine whether the car is over £40,000 and thus eligible for the additional VED payments between years 2 and 5. No one is liable - not Toyota nor the dealer - that's the system. If anyone is at fault it is you for not checking how the VED system works before ordering.

[ianharding]

I had a horrible feeling that might the case. I do feel the dealership should have been more proactive about this, since I made it very clear I thought this tax was ridiculous and had no intention of paying it. i should have been given the option to pull out of the order once it was known a price rise was coming. As i say, if I was prepared to pay the tax, I'd have bought something else (more expensive) in the first place.

[Catlover]

Can you not take purchase of the vehicle, keep what you got.

[ianharding]

5 minutes ago, FROSTYBALLS said:

The list price at the time of the first registration is used to determine whether the car is over £40,000 and thus eligible for the additional VED payments between years 2 and 5. No one is liable - not Toyota nor the dealer - that's the system. If anyone is at fault it is you for not checking how the VED system works before ordering.

Well, I was fully aware, that's why I chose a car with a list price below £40,000. 

[FROSTYBALLS]

2 minutes ago, ianharding said:

I do feel the dealership should have been more proactive about this, since I made it very clear I thought this tax was ridiculous and had no intention of paying it.

To be honest, the dealer probably wouldn't have known until January the price increases were coming.

1 minute ago, ianharding said:

Well, I was fully aware, that's why I chose a car with a list price below £40,000. 

But by the sound of it, you didn't know the £40,000 limit was applied at the time the vehicle is first registered - not when it is ordered. So you weren't fully aware. It is easy to blame someone else, but at the end of the day, the fault is yours.

[gazzie]

I ordered a FWD Dynamic with sunroof and pearlescent paint in January which was under the £40,000 as didn't want to go into the higher tax. I noticed the price increase which would take it over. I contacted my dealer this week who has assured me that because I ordered the vehicle before the increase it will not be in the over £40,000 tax......I even discussed changing the spec on the order to take under and was told that there was no need......Im now confused.

 

[ianharding]

22 minutes ago, gazzie said:

I ordered a FWD Dynamic with sunroof and pearlescent paint in January which was under the £40,000 as didn't want to go into the higher tax. I noticed the price increase which would take it over. I contacted my dealer this week who has assured me that because I ordered the vehicle before the increase it will not be in the over £40,000 tax......I even discussed changing the spec on the order to take under and was told that there was no need......Im now confused.

 

Well, I can assure you the list price shown on your registration details will be the new list price, whatever that may be, because that's how DVLA works. I hope for your sake it's under the 40K still. if it isn't and they somehow manage to keep the price as per original order, please let me know. My dealership said they can't change the price back to the order amount. I am sure a lot of people are being caught out by this, not just Toyota buyers.

[FROSTYBALLS]

39 minutes ago, gazzie said:

I contacted my dealer this week who has assured me that because I ordered the vehicle before the increase it will not be in the over £40,000 tax......I even discussed changing the spec on the order to take under and was told that there was no need......Im now confused.

Think it may depend who you spoke to, as some salespeople haven't got the best product or systems knowledge. 

Have a look at page 19 of the following topic:

 

[ianharding]

42 minutes ago, FROSTYBALLS said:

To be honest, the dealer probably wouldn't have known until January the price increases were coming.

But by the sound of it, you didn't know the £40,000 limit was applied at the time the vehicle is first registered - not when it is ordered. So you weren't fully aware. It is easy to blame someone else, but at the end of the day, the fault is yours.

No, I was aware. What I didn't know was that Toyota had increased their prices and the impact this would have. My complaint is the dealership should have kept me informed, and if necessary given me the option to cancel the order. They knew full well that i did not want to pay this ridiculous tax.

[ianharding]

9 minutes ago, FROSTYBALLS said:

Think it may depend who you spoke to, as some salespeople haven't got the best product or systems knowledge. 

Have a look at page 19 of the following topic:

 

Thanks......confirms my worst fears. And to the point made in the thread, as I can afford a £40K car I can afford the tax, but I object to it on principle. I am buying an economic car, not a gas guzzler. I've been a diesel driver for years (my wife's 1.6 Honda attracts a tax rate of £20 or so and does 65mpg). It's just another tax grab. And it's laughable calling it road tax, the roads I drive on are in a shocking state and getting worse by the year.

[gazzie]

Im in the process of e mailing the salesperson at the dealership now for absolute clarity so I can decide if I need to alter my order or if I can do anything about this the reason I went for the FWD was to keep under the 40K

 

[Roy124]

Ian, you call it a road tax.  It has not been a road tax for many years it is VED, vehicle excise duty, a tax by another name. 

In fact it has not been a road fund tax for 85 years. 

If you see a hole it may not be a pot hole. 

[FORBES]

29 minutes ago, Roy124 said:

Ian, you call it a road tax.  It has not been a road tax for many years it is VED, vehicle excise duty, a tax by another name. 

In fact it has not been a road fund tax for 85 years. 

If you see a hole it may not be a pot hole. 

Vehicle Excise Duty (VED) - also known as road tax, car tax, or the road fund licence

[Cyker]

Yeah a lot of people have been caught out by these post-purchase price hikes tipping over the premium car tax threshold.

A few people have altered the spec to get it below the tax bracket threshold, and some have even cancelled their orders. I know it's been especially galling for people who wanted the PHEV, but opted for the Hybrid instead *specifically* to get below the premium tax threshold, but due to delays or whatever the price got pushed up between them ordering the car and the paperwork going through, catching them out.

Frankly the dealer should have been clearer that this was going to happen, but it seems a lot of them have been misinforming their customers that, as they placed the order before the price hike, they'd be okay, when this is untrue.

Just be aware, you CAN cancel and get your money back - Even if you have taken possession of the car, you are within the honeymoon period and are well within your rights to reject the car without even having to give a reason. Can consider getting e.g. the PHEV or getting, hmm, say, a Mk4 Yaris  

 

[Red_Corolla]

It's about 1% of the price of the car.  I don't think any further comment should be necessary.

[Cyker]

Well that's the counter argument, the whole 'if you can afford a 40k car you can afford the extra tax'. For some people it's the principle of the thing. To me that's a lot of fuel!!

I do think there should have been a grace period, esp. for people who had a car on order but not yet registered, as this just seems really unfair, esp. for people who compromised on a spec or choice of car specifically to stay below the threshold and/or are only in this situation due to manufacturing delays outside their control.

If it happened to me and I'd picked a base-model, I'd be proper pissed and would definitely cancel it and get the kitchen sink model instead! If I was being forced to pay such a high tax (Remember that's on top of the 155/145!) I'd refuse to stick with a compromised car.

 

[FROSTYBALLS]

1 hour ago, Roy124 said:

It has not been a road tax for many years it is VED, vehicle excise duty, a tax by another name. 

 

53 minutes ago, FORBES said:

Vehicle Excise Duty (VED) - also known as road tax, car tax, or the road fund licence

In fact Government just call it Vehicle Tax: https://www.gov.uk/browse/driving/vehicle-tax-mot-insurance

[Roger_N]

3 hours ago, ianharding said:

I ordered a new car in Sept 2021 (RAV 4 Hybrid). List price was £39900 or so; I researched it online before test driving and ordering. I made it very clear to the dealership that I would not buy anything with a list price over £40,000, so as to avoid the ridiculous £480 annual road tax from year two on (especially for an economical hybrid). We proceeded on this basis and I placed the order and paid a deposit. Had I been happy to pay this tax, I'd have bought something different.

Anyway, it got built in December and shipped in January, finally arriving mid-February. When i went to sign the registration details, I noticed the list price was recorded as £42,970, pushing me into the high tax bracket. Toyota had increased their prices in February. I remonstrated with the dealership. They said they couldn't do anything, they'd have to try to get DVLA to change it. I'm still waiting. I'm due to collect the car on March 1st. I should add I have dealt with 4 different people at the dealership, there was no continuity. They should have spotted this and dealt with it before I had to point it out to them.

This could cost me another £1675 if I keep the car 6 years. So who is liable for the cost if DVLA won't play nice - Toyota? The Dealership? I'm sure I'm not the only person facing this issue.

I am one of those in the same situation as yourself, since October the Excel Rav4 I ordered has gone up 3 times a total of £3220. At first I was furious but then I thought I've 2 options, just cancel the order and loose £200 deposit, I don't suspect the garage would mind given the current supply situation, or buy the car and look to sell it at the end of the first but give it a chance to see if it has enough good things to make keeping it worth while.

I was offered a really good price for my current car and was told on numerous occasions the price would be honoured , this part could be the deal breaker for me if they don't as I believe Toyota are keeping the price the I was quoted at the time of purchase.

I should fined out in the next few weeks. 

[ianharding]

48 minutes ago, Red_Corolla said:

It's about 1% of the price of the car.  I don't think any further comment should be necessary.

It's the principle. I've got far better things to do with £335 a year than give it to a government that writes off £9Bn in fraudulent COVID loans - just one example of their profligacy.

[Lawnmowerman]

3 hours ago, gazzie said:

I ordered a FWD Dynamic with sunroof and pearlescent paint in January which was under the £40,000 as didn't want to go into the higher tax. I noticed the price increase which would take it over. I contacted my dealer this week who has assured me that because I ordered the vehicle before the increase it will not be in the over £40,000 tax......I even discussed changing the spec on the order to take under and was told that there was no need......Im now confused.

 

Your specified options bring it to £40,170.

The other side of the coin is those who purchased the PHEV initially only to see a massive price drop from Toyota effectively slashing the value of their car overnight - despite assurances that the price would increase soon. They have my utmost sympathy.

[Firecycle]

I'm in the same boat and the whole if you can afford a 40k blah blah blah was aimed at me, which in itself was a rather childish comment. I have now since accepted the Tax for what it is and will have to stump up the extra, but like quite a few here my car was specced to be below 40k and the long wait and price rises are not of my making, it's the idiots in Westminster who are to blame. 

[Hybrid21]

Thing is you guys have saved more than the increased road tax.

You've saved on the new car price increases, which could be around £3000.

You've saved by getting probably around another £3000 for your trade in as second hand car prices have went through the roof.

So that's around £6000 savings 👍 

You're still in a win situation even with increase in your road tax. 

Iain

[Flatcoat]

11 hours ago, Red_Corolla said:

It's about 1% of the price of the car.  I don't think any further comment should be necessary.

I appreciate everyone has a spend limit If it is a problem then simply cancel the order. I am sure the dealer will be able to sell it very quickly. This is happening across the market with inflation hitting car prices in the past 2-3 months. Where I have a problem is with the govt not raising the £40k threshold in line with inflation. Should be about £45k - or even more. The price drop on the PHEV had no impact on the VED, the PHEV is still over £40k. It is also noticeable that when it comes to tax everyone complains that what they pay is too much - but expect others (business, the ‘rich’) to pay ever more….. and as for the Covid loans the chancellor said at the time the scheme wasn’t perfect but the urgency of the situation was such that ‘introducing something should not be delayed by the pursuit of perfection’. And now working in the public sector it is that constant pursuit of perfection (it is cover for unwillingness to take risks and make decisions) that everything takes forever and STILL costs stupid amounts and money gets wasted. NHS anyone?