Elderly drivers could be “most impacted” by the new 2025 Vehicle Excise Duty (VED) car tax updates, according to experts at Go.Compare. First-year VED fees increased on April 1, 2025, as part of a major shake-up in car tax fees.
Petrol and diesel owners are among the most affected by VED fees based on how much CO2 pollution each car pumps out. According to Go.Compare, baby boomers could pay an extra £40.5million in VED fees as a result of the changes. Baby boomers are considered to be anyone born between 1946 and 1964 and would be between 61 and 79 years old today.
HM Revenue and Customs (HMRC) has previously confirmed first-year VED rates “will be changed to widen the difference between zero-emission, hybrid and internal combustion engine cars”.
First-year increases are completely dependent on CO2 emission rates with the most polluting vehicles paying more.
Brand-new vehicles emitting over 255g/km of CO2 were charged £2.475 to use the roads last year but will now pay £5,490.
Meanwhile, models which emit between 226 and 255g/km of CO2 will pay £4,680, up from £2,340 just 12 months ago.
Even average vehicles are affected, with brand-new models emitting anywhere from 131 to 150g/km of CO2 now liable for £540 in year one compared to £270 last year.
Tom Banks, car insurance expert at Go.Compare explained how selecting a certain type of vehicle could backfire with higher tax rates.
He said: “Unfortunately, some groups will be worse impacted by the rising VED rates than others, which is mainly down to the type of cars they tend to buy.”