NFDA criticizes new VED revelations

‘The sudden removal of the Vehicle Excise Duty (VED) exemption for older vehicles will severely damage the market value of thousands of vehicles, which will be bad news for dealers and owners alike’ according to Sue Robinson, director of the RMI National Franchised Dealers Association (NFDA).

The Treasury announced yesterday (Tuesday 29 April 2008) that it was abolishing an existing VED exemption on higher road tax rates for vehicles emitting more than 225g of CO2 per Kilometre registered between March 2001 and March 2006.They stated that this was to encourage owners of these vehicles to replace them with newer, environmentally friendly models.

However Robinson disputes the effectiveness of this measure: ‘The extra costs involved in running these older vehicles will make them extremely unattractive to potential buyers, thereby ruining trade-in values for dealers. At the same time, many motorists may feel that they are better off running these vehicles into the ground rather than lose money selling up.

‘As a result the measure is unlikely to achieve any substantial reduction in CO2 levels.‘

Robinson adds: ‘The motorist has proved to be an easy target for additional taxation by the Treasury in recent years, and this latest development shows they intend to continue using it to raise additional revenue.’