Dear Alex,
When we ordered our
Toyota RAV4
In 2022, we initially planned to purchase a 4×4 version, but ultimately chose a front-wheel-drive option to keep the total expense under £40,000 and avoid higher vehicle taxation rates. The automobile finally arrived approximately 13 months following the placement of our order; however, our dealership upheld the initial agreed-upon price because of disruptions attributed to the conflict in Ukraine. A year post-delivery, we encountered an unexpected charge.
vehicle excise duty
(VVED) according to the DVLA at the higher rate. Both Toyota and the DVLA state that nothing can be done since the list price at the time of delivery exceeded £40,000. We believe that had we known about this earlier, we might have opted for the car with four-wheel drive as initially planned. Does this sound correct?
– AC
Dear AC,
You’ve been exposed by a flaw in the system.
existing automobile taxation (Vehicle Excise Duty) regulations
, which an growing number of motorists are encountering as well. The situation is that you placed your order for the vehicle at a specific price; however, when delivery finally arrived, Toyota had revised their pricing to align with inflationary pressures, pushing the listed price of your particular model above the £40,000 “luxury tax” benchmark.
When a manufacturer raises the listed price while a vehicle is still awaiting delivery, this practice isn’t unusual at all. Typically, dealers address this issue by offering a rebate or reduction to match the original agreed-upon price from when the purchase was made.
Nevertheless, the regulations explicitly state that your vehicle’s tax rate should be determined by the list price upon delivery. This means that the initial agreed-upon price when ordering the car does not matter to the DVLA.
And even though it willingly includes additional features if they push the list price over the £40,000 threshold, it does not apply the same logic when discounts lower the price beneath this limit.
If you place an order for a car priced at £39,000 and the delivery brings its list price up to £41,000, you will still face taxation at the higher rate—despite the fact that the dealership might reduce the price by £2,000 to meet your initially agreed-upon cost.
I’m sorry, but there’s really nothing you can do about it. This situation is simply another unforeseen result of the recent, somewhat foolish Vehicle Excise Duty (VED) scheme for new cars. To all other readers who might be considering ordering a vehicle with a sticker price just under the £40,000 mark, this story serves as an important lesson.
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