The annual UK budget is always a testing time especially with the economy the way it is presently. Chancellor George Osborn had announced this year that his annual budget would be aimed towards people who work hard. In his keynote speech, he had stated that the economy would not fall back into a recession and stressed the primary goal would be to get more people back into work and reduce the number of people claiming benefits. The budget was delivered this year with help for homebuyers, motorists and beer drinkers. So what does this year’s annual budget really mean for motorists? Here we outline some the key points: -
Fuel duty increases cancelled
The proposed fuel duty increase that had been scheduled for September was cancelled by George Osborne; this would have added 3p to the cost of petrol and diesel. Apparently motorists would have been forking out in excess of £1 billion in extra fuel duty and Vat should the fuel duty increase have gone through. Basically it means that petrol prices would have been 13p more expensive per litre had the duty not been frozen out over the last 2 years. For a Ford Focus, it could actually represent a saving of around £7 per full tank of petrol. For motorists, this has offered some relief as fuel duty has not gone up for the past 2 years since January 2011. The current economic climate has seen planned increases shelved for the last 2 years. Apparently the government has lost a total of £6 billion in revenues due to fuel duty being frozen for 2 years.
There has been widespread positivity towards the fuel duty freeze with consumer groups and UK industry bodies welcoming the news. There was an acknowledgment throughout that previous increases had harmed the economy. The RAC foundation also announced that this would bring much needed relief for families already burdened by the high costs associated to running a vehicle. The high cost of fuel has meant that members had reduced journey times, and cut general household expenditure due the continued high cost of fuel.
Tax Allowance
The budget also brought more relief for motorists with the chancellor announcing that there would be an extension to first year tax allowance. This would be for those who purchase ultra-low emission vehicles. The chancellor also announced the introduction of new company car tax rates for lowest emitting cars. The car tax rates will commence from April 2015 will be introduced at 0-50g/ km CO2 and 51-75g/km CO2.
SORN
Another budget announcement that will indeed affect vehicle owners is the SORN (Statutory Off Road Notification). Previously this would be renewed each year whilst your vehicle was off the road. Under the new budget, there will be no need for renewal.
Tax Disc Grace Period
Not having a task disc on your car would normally be regulated to 5 days before you would be legally liable. The chancellor announced that this would be extended to a period of 14 days.
Classic Cars
There was more budget news for those who have classic cars. Currently owners of classic cars do not have to tax it. The classic car exemption has now been forwarded a year meaning that any classic cars that were manufactured before the 1st January 1974 will now be exempt from tax obligations. There appears to be some positivity for motorists from this year’s budget though there are still those who feel it is not enough. Quentin Wilson from FairfuelUK feels that freezing annual fuel duty is just not enough. To stimulate current economic growth, the government really needs to do more by introducing substantial fuel cuts.
While the 2013 UK Budget addressed new vehicle duties, many readers overlook how changes in budgetary policies can shift supply and demand in the used car market. A rise in fuel duty or vehicle excise duty (VED) often leads owners to sell older, less efficient cars, increasing supply and driving down resale values. Conversely, incentives for low-emission vehicles may stimulate demand for late-model petrol or diesel cars, stabilizing prices. Understanding these dynamics can help you decide whether to sell your current vehicle now or hold onto it until market conditions improve.
If you need to bridge a short-term cash gap while waiting for better resale prices, consider exploring options like a 500 dollar loan to cover immediate expenses without waiting for your vehicle sale proceeds.
Budget announcements can influence interest rate expectations and lender confidence, affecting auto loan rates across the UK. An accommodative monetary policy or tax relief for vehicle financing providers may lead to slightly lower APRs, making it cheaper to purchase a new or used car on finance. Conversely, if the budget signals tightening inflation control, lenders may increase rates to offset higher borrowing costs. Staying informed about these shifts ensures you choose the most cost-effective financing option when purchasing or refinancing a vehicle.
For immediate funding needs when rates are unpredictable, you might explore a $1,000 quick loan no credit check as a stopgap measure until vehicle financing terms become clearer.
Although the 2013 Budget introduced some green vehicle incentives, updates to grant schemes and emissions regulations often follow in subsequent budgets and policy statements. These grants can significantly reduce upfront costs if you’re considering an electric or plug-in hybrid vehicle. For example, low-emission grants for workplace charging or home charging installations can lower your total cost of ownership. Keeping up with the latest incentives helps you decide whether to switch to a cleaner vehicle now or delay the purchase for better future grant eligibility.
If you need additional liquidity to take advantage of current green vehicle deals, a small personal loans online option can help you cover deposit requirements and installation fees.
Vehicle running costs extend beyond fuel and taxes to include servicing, spare parts, and repairs. The 2013 Budget’s inflationary impact can lead to gradual increases in mechanic labor rates and parts prices. Moreover, any changes to VAT or import duties on vehicle components can affect the cost of repairs. By forecasting these potential cost rises, you can budget for regular maintenance or consider the long-term savings of a more fuel-efficient or electric model.
When unexpected repairs strain your monthly budget, a $500 loan could cover minor repair bills, preventing deferred maintenance from leading to costlier breakdowns later.
Beyond immediate budget announcements, future changes in VED, company car tax, and congestion zone charges often favor low- and zero-emission vehicles. Electric cars remain exempt from road tax in many cases, while hybrid vehicles benefit from lower band rates than conventional petrol or diesel cars. Understanding the current tax bands and anticipating upcoming shifts lets you calculate long-term savings. This tax advantage could offset higher purchase prices over the vehicle’s lifespan, making an EV or hybrid a financially savvy choice.
If you require extra funds to switch to a greener vehicle, consider applying for direct private lenders for personal loans that specialise in tailored financing solutions, even if your credit score isn’t perfect.
Impact on Second-Hand Vehicle Market Prices
Changes in Vehicle Finance and Loan Rates
Environmental and Emissions-Based Vehicle Grants
Effect on Maintenance and Running Costs
Tax Implications for Electric and Hybrid Vehicles
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