Taxing Issues for Drivers: Paying Less for More
If you’re a motorist, you may well feel like you already pay enough to drive. After affording the car itself, there’s the cost of road tax, insurance, petrol, maintenance and parking to cover, so you’d certainly be forgiven for feeling that way. Sadly, it can sometimes seem like the government views motorists as little more than a guaranteed source of income, and the amount spent on the roads is illuminatingly small compared to the amount taken from drivers.
Currently, the debate isn’t whether we should be taxing drivers, but what we should be taxing them for. The treasury is propped up by taxes on many of our road expenses, our tax discs being far from the only formal way to take an extra cut. But the amount of tax currently being taken from motorists is falling rather dramatically. In April to June 2012, 500 million fewer litres of petrol were sold in the UK than in the same period in 2011, a consequence of both a double dip recession and the government’s own policies. Not only are drivers intentionally using their cars less, they’ve been buying more fuel efficient cars to take advantage of tax cuts on such ‘green’ vehicles.
Various solutions have been offered up, attempting to offer some semblance of fairness in a tax that will probably fail to benefit the motorists it applies to. Conscious that congestion charging in urban areas has been a failure (Greater Manchester’s decisive rejection of the charge was mirrored in Edinburgh, the only other city to even entertain the idea), it has been suggested that Vehicle Excise Duty should become a two tiered tax: you pay more if you intend to use the motorways.
However, the taxes taken from motorists aren’t being spent on our roads: £33 billion is taken through taxation and just £9.4 billion is spent by the Department for Transport. In the north-west, the DfT spends only £164.90 per head – lower only than the South West and South East, and little compared to both the amount of tax that is taken, and the amount of spending in London (£235.71 per head).
With the government so determined to take money from motorists, it would be easy to resign ourselves to the inevitability of having to pay up. Transport is a matter of modern necessity, and few of us can afford to rely on public alternatives because of the extra time it takes and a similar programme of rising costs. For motoring to cost less, you have to look for savings made regardless of the taxman’s activities.
Of course, spending less on your car could mean spending more on petrol: buying a cheaper car can mean losing much of the savings on fuel efficiency. As the alternative involves using your car less, you’re having to compromise your lifestyle in some way to continue to drive at all. If only there were a way to spend less on both your car and your petrol… Well, there is.
Rather than purchasing your next car, you should consider leasing it instead. Car leasing, as offered by companies like the Stockport-based Nationwide Vehicle Contracts grants you a long-term rental and exclusive use of a vehicle, with fixed monthly payments that can work out considerably cheaper than getting a bank loan or relying on a dealer finance plan. Car leasing also involves a lower initial deposit: it not only makes car ownership cheaper, it also brings down the price of better cars into your range.
Of course, this means sacrificing ownership of your car (except on contract purchase agreements, which are slightly more expensive). But this may not be a completely negative thing. Leasing allows you to drive a new vehicle every two, three or four years and it means that you don’t have to worry about depreciation: the decrease in value of your car through its useful life and one of the biggest cost factors that people often don’t consider in motoring. Typical leasing deals also help you manage a few of your extra costs: road tax and breakdown recovery are included and you can opt for low mileage terms in order to enjoy an even better, cheaper deal.
Whatever the government has in its plans for road taxation, you can save real money by changing how you pay for your car, so look into leasing today.