The logical thing to do would be to have a new Band H set at 275 g/km, costing around £500 per year. That would provide a real incentive to luxury car buyers to choose the less polluting alternative, as 45% of cars over £40,000 fall between 225 g/km and 275 g/km. While the extra cost of the road tax would not be significant, the impact on resale values certainly would be. Given that the loss in value of a car just over the Band G threshold is around £1,500 more than an equivalent car in Band F (e.g. a 2004 Mondeo 2.5 V6 compared to a Mondeo 2.0), the loss for a Band H car compared to a Band G car would be over £2,000. That would be enough to make even luxury car buyers think twice.
Clean Green Cars completely supports the idea of paying road tax according to CO2 emissions - but it would be better if the bands were actually put in the right place. At present, CO2 considerations only affect buyers of quite modest cars, as they look for a model which falls into the lowest possible band. Buyers of expensive cars exist in a market where CO2 ceases to matter, as virtually all their choices fall into the same tax band. The whole point of the road tax bands for CO2 is to change people's behaviour and the current system is clearly having no effect at all on the cars that emit the most pollution. People will only change their behaviour if they are given an incentive - so it is time the government gave luxury car buyers a real incentive.
