Car insurance customers see tax cuts

Tue, 25 Nov 2008

Plans to charge certain motorists a higher rate of tax have been partly scrapped in the pre-Budget report.

Under the previous proposals car drivers of high-polluting vehicles made between 2001 and 2006 were set to see their road tax more than double, from £210 to £430 or more.

However, the chancellor Alistair Darling has now reduced the tax, after it was revealed the move may cost some families up to £240 in car finance .

Next year there will be no increases of more than £5 for car insurance customers and the rise set to occur in 2010 will be limited to £30, a £60 reduction.

TheGreenCarWebsite.co.uk has welcomed the news, saying it will give families a "temporary but much-needed relief".

"It is unlikely that such motorists would see an increase in their road tax rate as being fair at a time when we are all feeling the pinch," the website stated.

However, Nigel Humphries from the Association of British Drivers states this is not the end of the system for motorists.

"These limits are only for a year, which means motorists could still be clobbered with bigger increases down the road," he says.
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