Expensive Car Supplement failing to keep pace with rising prices, Venson warns

The Expensive Car Supplement has not kept pace with the rising price of new cars, Venson Automotive Solution has warned.

Currently, it adds £440 to Vehicle Excise Duty (VED) charges from the second to the sixth year after first registration.

The threshold for electric vehicles (EVs) was increased to £50,000 in the Autumn Budget, however the £40,000 threshold remains for all other fuel types, a figure that has been fixed since the supplement’s introduction in 2017.

Venson warned that the supplement is now affecting everyday fleet choices, driving up whole-life costs.

It said that fleets are increasingly reviewing trim levels and additional equipment to avoid it.

Simon Staton, client management director at Venson Automotive Solutions, said: “When the Expensive Car Supplement was introduced in 2017, the average new car cost around £26,000.  

“Today’s average new car price exceeds that, which means the Expensive Car Supplement captures many vehicles businesses wouldn’t consider luxury at all.

“Fleet operators aren’t procuring prestige vehicles, they’re sourcing practical, safe and increasingly well-equipped cars that employees need to do their jobs.