March is approaching, which means the UK automotive industry will be gearing up for the latest number plate release. The new ’25 plate car registration not only marks the reveal of various new car models but also plays a significant role in influencing decisions related to vehicle valuations and policy renewals, such as extended car warranties and tax.
What is the purpose of a number plate?
The primary purpose of a number plate is for identification – assisting with law enforcement, vehicle transactions, and traffic management. Each unique plate links to important information, such as the vehicle’s MOT status, ownership details, and tax status.
Is there more to the launch of the new number plate?
The new ’25 plate car registration could be the last opportunity for buyers to purchase an EV without having to pay for vehicle tax, making the upcoming registration particularly noteworthy for buyers wanting to purchase an EV.
While many car dealerships will be anticipating the usual sales boom associated with the new registration launch, upcoming changes to EV regulations, introduced by Chancellor Rachel Reeves, could present potential challenges for EV dealerships and manufacturers which could impact their market performance. [1]
Will the new ’25 plate car registration affect EV owners?
The release of the new number plate almost coincides with the introduction of the new EV tax laws, making these two dates pivotal for the UK automotive sector this year.
Rachel Reeves has announced new laws that will require EV owners to pay VED (Vehicle Excise Duty) as well as the ‘Expensive Car Supplement’. [2]
Starting in April 2025, tax will be payable on all electric vehicles. Additionally, EVs priced over £40,000 will be subject to the ‘Expensive Car Supplement’, meaning drivers will need to pay around £400 extra each year, for five years after the start of the vehicle’s second licence period. [3]
What is the expensive car supplement, and why do we pay it?
The expensive car supplement has been put in place to address how expensive cars, that may produce higher levels of emissions than other cars, can have an impact on the environment. [4]
What is VED, and could it deter potential EV buyers?
VED (Vehicle Excise Duty) is more commonly known as ‘road tax’, which all vehicle owners must pay in the UK.
What was once an incentive to switch over to electric – exemption from road tax – may now become a deterrent. The new costs could influence potential buyers to reconsider transitioning to EVs, possibly impacting the Government’s sustainability goals.
Are the new tax rules compulsory for all EV drivers?
Yes, the new VED laws will apply to all EVs registered after 2001, with varying charges based on the vehicle’s registration date [5]:
- New EVs registered on or after 1st April 2025
- First year rate: £10
- Standard annual rate (from the 2nd year onwards): £195
- Existing EVs registered between 1st April 2017 & 31st March 2025
- Standard rate: £195
- Older EVs registered 1st March 2001 & 31st March 2017
- Annual rate: £20
If you want to know more about EV taxes, you can read our blog about navigating new EV taxes to get a better understanding.
Looking to switch to electric? Here’s how you can save money ahead of the change
To prepare for the introduction of new taxes on EVs, Money Saving Expert Martin Lewis suggests a potential way to save money:
Lewis said “Owners of EVs registered between 1st April, 2017, and March 31st, 2025, can benefit by re-taxing their vehicles in March 2025. This proactive step allows them to secure an additional year of tax-free motoring effectively postponing their first VED payment until March 2026.” [6]
Important: You can only re-tax your car two months in advance of the renewal date.
The growth of EV popularity
Currently, there is a growth in the EV market but it is still not where it needs to be. SMMT reports that EV’s have taken record annual share but the figure is still below mandated levels – this coincides with our recent OnePoll survey which highlights that only 2% of people own an EV, while 70% of people still rely on traditional fuel cars [7][8].
As we look ahead there is light on the horizon for EVs with 13% of people looking to purchase an EV in the next 12 months which is a more than those looking to buy a diesel car, which is at 9% [7]. This shift in consumer preference suggests an increasing awareness of environmental benefits, and advancements in EV technology. As charging infrastructure improves, and EV’s become more affordable, they will naturally become more appealing, potentially speeding up the transition away from diesel vehicles in coming years.
Be future-ready with an EV warranty
Our extended car warranty, and EV plans can offer you financial protection and peace of mind, so don’t let unexpected repairs get in the way.
Drive with confidence and financial protection. Our extended car warranty and EV plan can offer that added layer of protection and peace of mind – so you can keep moving without the worry of unexpected costs (subject to your plan terms and conditions).
Sources
[7] *The survey data cited in this guide was compiled from research conducted by OnePoll in 2024. The survey was based on responses from a representative sample of 2,000 UK: Car owners.