New emissions based road tax will affect new and used car buyers

The introduction of Alastair Darling's radical overhaul of vehicle excise duty last month has some significant consequences for new and used car buyers.

Announced in 2008, the former chancellor's plan aimed to encourage the use of cars with low CO2 emissions. They came into effect on the first of April - and for many people looking to avoid tax, it seems the best answer may be to sell a car for cash to buy a more environmentally friendly vehicle.

From now on, new car buyers should be careful to check the emissions rating of their chosen vehicle. The new tax system has introduced a "showroom tax", which can see the vehicles with the worst ratings rack up £950 in road tax before they even leave the dealership.

However, cars with less than 100g of CO2/km will avoid both the showroom tax and road tax itself. Those in between will pay a sliding scale of charges, with the bottom limit for the showroom tax lying at 165g of CO2 per kilometre.

Naturally, the showroom tax won't apply to used car buyers or for those who aren't looking to purchase a new car - but the road tax changes effect both parties. Cars that have less than 150g of Co2/km will avoid the punitive taxes - though matters are complicated by the fact that the new tax depends on when your car was registered.

Cars with high emissions registered between March 2001 and 2006 have a maximum limit of £245 of tax this financial year, even if they emit more than 201g of CO2/km. Those registered after 2006 could be better off selling a car though, as come tax renewal time a 2.4litre engine could cost £425 a year in tax.

For those who own a car registered before the first of March 2001, then the changes won't be so important. These cars will continue to pay tax based on their engine size - £125 if smaller than 1,549 cc and £190 if greater.

Tara Moore, London, Mercedes CLK

Mark Allen, Brentwood, Ford Focus