New diesel surcharge having a positive effect on used car market

The new car tax arrangement for diesels has increased the prices of some popular family cars by over £300, seemingly overnight.

On 1 April many diesel cars had a price hike as the chancellor passed another tax increase on diesel cars, which added between £15 and £520 to the cost of taxing the cars, which dealers paid on behalf of buyers which in turn has put the prices of cars up.

The new diesel surcharge was announced in last year's budget, and move every car up a tax band. The surcharge is only for the first year, after which a standard rate applies.

However, the tax hike has actually had a positive effect on pre-registered diesels, because the tax hike only applies to new diesels. Pre-registered cars are, for all intents and purposes, second hand, but only have a handful of miles on the clock and often come with sizeable savings, on top of the lower ta that they're subject to.

'With new diesel sales still on the way down, but used diesels still popular, we foresee customers searching out the greater savings available with pre-registered and nearly new cars,' said BuyaCar.co.uk managing director, Austin Collins. 'Cars sporting the brand new March 18-reg plate were already on sale by the middle of last month, so it's clear that there are plenty of deals available, offering substantial savings.'

The increases brought by the tax increase are alarming. A new price of a petrol Ford Kuga Titanium 1.5 T EcoBoost rose by just £30 from 1 April, but the diesel equivalent jumped by over 10 times that – £315. A new Ssangyong Korando didn't have a price increase in petrol trim, but rose by £350 in diesel configuration.The Mercedes E-Class E350 also didn't have a price increase as a petrol, but rose by £440 as a diesel.