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Wednesday, 15 February 2017 08:45

Tax hike may spell the end of the diesel car - how will you be affected?

Take a long loving glance at your beautiful diesel car sat on your drive at the minute and weep. For in a couple of years there shall be far fewer diesel vehicles dominating our roads.

That’s the way it is going with the news that we are going to get taxed out of owning diesel cars in the next few years in a bid to help cut air pollution, especially in our inner cities.

A new report released at the back end of last year highly recommended that people in the UK should be weaned off purchasing diesel cars because of the damage that they were doing to the air quality. It also suggested that the way to get people out of diesel cars was to hike tax up on the highest polluting diesel cars and ultimately price people away from diesel cars.

At the moment diesel cars still have a heavy presence on Britain’s roads. This is partly because in the early 2000s, the then government reduced the duty on low sulphur diesel by 3p. Company car tax on diesels was also reduced.

Some people wondered why the government started pushing diesel cars at that time and the fact of the matter is because they wanted to meet climate change targets that were set back in the early noughties.

It proved to be a fatal mistake, however. At the time it was believed that diesel was better for the environment as they produced less carbon than petrol counterparts – carbon is the biggest contributor to global warming so it seemed straight forward to promote the use of diesel engines. What the government didn’t realise at the time, though, was that diesel engines give off four times as much NOx and up to 20 times as many particulates. These such particulates have been blamed for clogging up the air in cities up and down the country and has also been blamed for causing nearly 10,000 premature deaths in the London area alone – with people breathing in the toxic air. The sharp rise in this poor air quality is a direct result of the then chancellor bringing the cost of diesel tax right down; which then led to a drastic rise in the purchasing of diesel cars.

We completely understand why the shift from diesel cars has to happen, air quality is all important, but what we are concerned about is what happens to those people who followed the government’s lead and invested in diesel cars? What about the companies up and down the country who have been buying/leasing diesel fleets because of the tax benefits that were brought about? Will any of these people be refunded in some way? After all, they made a purchase on government advice in a way. They were lured in and are now, in effect, being dumped.

What about if the purchase price of petrol cars sneak up? Car manufacturers will be watching what is happening to the slaughter of diesel cars and will see that soon there will be a larger demand for petrol cars – who’s to say that they won’t start notching the price up on these cars to give themselves a bit of a profit?

We’re not into the blame game. We’re not blaming the then Labour government for the problems; actually we believe that the tax drop was done with good intentions and a deliberate action to tackle climate change. But that does not change the fact that tax rises are on the way for diesel cars – rises that are going to be high enough to eventually get everyone to switch from diesel to petrol. This may be something that might not sit well with people who have purchased a diesel car in the last few months. They will have to pay higher tax than they assumed which is never easy to accept and they will also be stuck in the knowledge that their car will be a lot less valuable with regards resale.

It isn’t a great situation to be in to be honest but this is the hardest part – the transition phase. It still doesn’t help people who feel they will be out of pocket because of following what the government wanted them to do. Maybe some form of reimbursement could be offered. We’re not quite sure how this would work but there has to be something in place whereby people feel they are not being punished. The cost of putting diesel in the car is creeping up also, so diesel owners are going to have a bit of a raw deal for a time.

We do think it would be wise if the government could step in and maybe ease the transition so that diesel owners don’t feel as ambushed. It would be in the government’s interest too as many people may not sit up and take as much of a notice when they reduce tax on things in future. 

We’ll wait and see but we’re not holding out much hope.