VED rates 2020 penalise new large cars

A change in the way that emissions are calculated means drivers who buy larger petrol or diesel vehicles from new will be hit with a higher initial car tax payment. In a bid to increase take-up of electric vehicles, some drivers could be hit with an increase of more than £1,000 on their first year's payment of vehicle excise duty.

The increased VED rates will penalise diesel vehicles that are not RDE2 compliant.

VED rates 2020: First tax payment when you register the vehicle

You have to pay a higher rate for diesel cars that do not meet the Real Driving Emissions 2 (RDE2) standard for nitrogen oxide emissions. Your car’s manufacturer will be able to tell you if your car meets the RDE2 standard.

The new VED rates will have petrol and diesel cars paying £150 per year in subsequent years. Alternative fuel vehicles will pay £140, while electric vehicles will pay nothing.

What is an RDE2 diesel vehicle?

When a new car goers on sale in Britain, it first undergoes strict emissions testing. Previous standards were determined under standard laboratory testing, and state a new diesel or petrol car must emit no more than 0.080g/km of nitrogen oxide (NOx). By contrast, RDE stands for Real Driving Emissions. The test aims to establish the emissions a car produces under real driving conditions (e.g. not in a laboratory). The new VED rates will hopefully the cheating of diesel emissions tests that brought scandal to VW and others.

The ethical choice

The ETA was established in 1990 as an ethical provider of green, reliable travel services. 30 years on, we continue to offer cycle insurance, travel insurance, breakdown cover and home insurance while putting concern for the environment at the heart of all we do.

Car emissions scandal

Cars are responsible for 15 per cent of Europe’s total CO2 emissions and are the single largest source of emissions in the transport sector. VW might have been exposed over its use of cheating devices, but the car emissions scandal is far from over.Mercedes topped a list of Europe’s car fuel economy cheats, according to a report four years ago by transport lobby group T&E. The worst offenders were the Mercedes A and E class which were found to guzzle an average of 56 per cent more fuel on the road than was claimed in the sales brochure.

Fuel efficiency tests are carried out in laboratories and prone to extensive manipulation, but researchers have found that even when they took into account all test loopholes, as well as those clean technologies that perform better in the lab than on the road, it proved impossible to explain fuel efficiency gaps higher than 50 per cent. This raises the question of whether Mercedes, like Audi, is detecting when the car is being tested and artificially lowering the emissions during the test.

Most car brands have an average gap higher than 40 per cent: Peugeot (45%), Toyota (43%) and Volkswagen (40%) - with the notable exception of Fiat (35%). All this means that a typical driver spends over £400 in additional fuel costs over the course of a year compared to what is stated in sales materials.

Greg Archer of T&E said: “There has been no improvement in the average efficiency of new cars on the road for four years because carmakers manipulate tests to achieve their CO2 targets instead of designing the car to be efficient on the road. As a result, drivers are being tricked and forced to buy more fuel; governments defrauded of tax revenues; and climate targets undermined.”