A Northampton-based vehicle leasing company is urging businesses with electric vehicles to consider changing their car purchase plans in order to avoid hikes in road tax.

 

Silverstone Leasing, based at Preston Deanery, has warned drivers about the Government changes, which will see road tax introduced for electric vehicles next month for the first time.

 

From 1^st April 2025, vehicle excise duty, as it is officially called, will be going up for almost all vehicles.

 

Electric vehicles, which currently do not pay road tax at all, will pay £10 for the first year and £195 from the second year onwards, whether they are leased or bought outright.

 

All electric vehicles registered between 2017 and 2025, will also be charged the standard £195 rate. Older electric vehicles, registered from 2001 to 2017, will pay £20 annually.

 

Luxury cars with a recommended retail price of more than £40,000 will also see their additional tax rise, from £410 to an extra £425 per year. With the new standard £195 tax for all electric vehicles registered after 2017, this takes the luxury car road tax to £620 a year.

Silverstone Leasing account manager Tom Bailey said: “At the moment, road tax is only payable on petrol and diesel vehicles, but now that’s coming into to force for electric cars too. As you can imagine, a lot of electric vehicles sit above that £40,000 luxury car threshold so the road tax is massively jumping up in terms of the price per month across the board because you’ve got to factor that in.

“It’s a significant jump up, but with a lease, as we offer, you get the added benefit of road tax being included. We’re aiming for an April delivery for most customers, but the good news is that there’s still time to take delivery of a new vehicle in March if you’d like to avoid the upcoming tax increases.

 

“If a vehicle is registered in March, the driver will pay the current road tax rates, which could mean a monthly saving of around £20 /month for luxury cars, given the new RFL changes in April 2025.”

 

Tom reckons the shift will result in individuals and companies looking to change their vehicles slightly sooner than planned to avoid the tax increase or choose vehicles slightly under the luxury car banding.

 

Some manufacturers have already responded to the forthcoming legislation changes by dropping their prices below the £40,000 threshold.

 

Tom said: “We have already seen a shift in buyer trends. Those who had planned to change their cars in April are potentially looking at taking it at the very last weekend of March, having delivery just a few days before the April deadline to save a bit of money.

 

“Electric vehicles have been exempt from road tax until now, but the government has clearly recognised that they’re missing out on a significant portion of revenue from these vehicles. While electric vehicles don’t produce tailpipe emissions, they still contribute to wear and tear of the roads, such as from tyres. Given this, it was always likely that the government would eventually introduce road tax for all vehicles, including electric ones, as a way to help fund road maintenance and infrastructure, considering the impact of all vehicles on the road network.”

 

As road tax is going up across the board, there’s no escaping the rise by choosing a petrol or diesel car instead. Silverstone Leasing continues to see buyers choose electric vehicles over traditional fossil fuel as they boast lower maintenance requirements and reduced servicing costs.

 

Companies looking at switching to an electric fleet should consider slightly less expensive vehicles that dip under the luxury threshold to avoid the top end of the new road tax.

 

Tom added: “There’s a lot of incentives out there in terms of the actual rentals coming down. There’s always been a bit of uncertainty I think on electric vehicles in terms of residual values, but when you lease a vehicle, you don’t have to worry about that. It really just comes down to what the figure is per month.

 

“People are watching the pennies more and more and electric vehicles still do make good sense for a lot of people because there are fewer running costs. The maintenance element is a whole lot less and the cost to charge it up is considerably cheaper than a tank of fuel.”

For more information on how you can get the best deal on your vehicle lease, contact Silverstone Leasing on 01604 978480 or visit www.silverstoneleasing.com