Drivers with certain types of vehicle face £1,732 car tax increase due to 2025 hikes

Buying one new vehicle will set buyers back an average of £1,732 more thanks to car tax changes, fresh analysis from Go Compare has revealed. The first-year Vehicle Excise Duty (VED) rates were raised earlier this year, putting hundreds of pounds onto bills.

Charges are worked out based on emissions levels, hitting van owners particularly hard as most rely on petrol and diesel engines. Go Compare's calculations indicated that van drivers would fork out an additional £15.5 million during the opening six months of the new tax year, reports the Express

This means van drivers face paying roughly £1,732 extra on Vehicle Excise Duty (VED) from April 2025. Expert Tom Banks has warned: "The increased VED rates will result in a big hit if you buy a brand-new van later this year, but there are things you can do to absorb the blow."

He added: "The tax rates are based on CO2 emissions, so if you're able to, this is a good time to switch to a van using cleaner fuels in the cheaper tax bands." Diesel van emissions frequently land them in the highest VED brackets, meaning these vehicle owners bear the brunt of the increases once more.

Consequently, Go Compare cautions that owners might witness a steep average rise of £1,807 per vehicle during the first half of the 2025/26 financial year. The research reveals that new petrol van purchases will generate an additional £1.2 million, working out at an average of £1,354 more per petrol van.

Following the alterations, purchasers choosing a hybrid van will only need to stump up an extra £252 in tax for road usage. These bills would be £1,500 less than those of diesel van drivers, although the initial outlay for hybrid models is expected to be significantly higher.

On the flip side, opting for an electric van will only set you back an extra £10 annually for road usage, offering a substantial incentive for those with the means to invest in one. Specialists at Go Compare have highlighted that purchasing second-hand hybrid or electric vans could be a good move, offering more affordable prices alongside the tax perks.

Tom added: "If you can't buy a suitable hybrid or electric van, you could go for a 'nearly new' one instead. This lets you enjoy a vehicle that's pretty much as good as new without breaking the bank, and means you can dodge the increased tax."