The implications of the recent budget

As you’re on this car finance site, you probably have an interest in vehicles, are a driver or are hoping to become one very soon. As such, there’s no doubt at all that the budget affects you, whether you’re a millionaire or on minimum wage. Let me just say this first - the budget hits you where it hurts.
Once again, us cash-cow drivers with car finance are going to suffer in a number of ways…Fuel Petrol and diesel prices had a planned rise of 2p per litre - however thanks to much industry (and some faceless entities) lobbying, we’ve now seen this put back to October. To me though, this just stinks of ‘stealth tax‘. What I mean by this is that if the government can make everyone calm down or forget about it for long enough, they won’t complain half so much and the coffers will still be filled. Fuel duty also has a guaranteed rise of 0.5p per litre in 2010 - no doubt with more raises in-between, all this on top of your car finance repayments.
Alternative fuel Car finance that aren’t powered by petrol or diesel are on ‘alternative fuel’. Those vehicles could well come in for a discount of up to £20 per year on their road tax. Not great, but better than nothing. Duty differential will disappear from alternative fuel and a Renewable Transport Fuel Obligation will force suppliers (such as Shell) to ensure that 5% of their fuel comes from renewable sources.

Vehicle excise duty/road tax - The number of bands for car finance vehicles will go all the way up to 13 from next year, with band M (255g of cO2 per km) being charged an annual fee of £425 per annum. Vehicles with a lower than 150g output per km will pay a lower rate from 2010 (why not from next year like the higher paying vehicles is anyone’s guess). Vehicles with a lower rate than 130g will not pay road tax in their first year. If this were every year I’d see the point… but just in the single year? Regardless, the most shocking fact is that band M vehicles will receive a massive bill of £950 in the first year.

Funding for more car finance tax - The government has freed up funding for local councils and private companies to investigate the idea of further congestion charges and national road pricing. It’s a great way to essentially fund further taxation I must say, and I’m not quite sure how making people pay more will stop them using the roads that they physically must use.

My overall thoughts on the budget and car finance - Frankly, as per usual, those who drive have been hit where it hurts - their wallets. I’m not surprised, given the fact that more than £45 million is generated for HMRC every year, over and above the car finance. However, as long as the government has the ideal of ‘being green’ to hide behind, people won’t rally behind the injustice of how much we pay for vehicles. The budget is once again unfair and a great way to eke more money out of an unwitting public let alone the car finance.
As a side note, due to the fact that we’re close to recession, this is one good year to buy a used vehicle on car finance. Depreciation is going to be 8% more than expected, so look for car finance in a couple of months to pay a price that’ll keep some change in your pocket.