Car tax changes: Drivers will pay ‘more in the long run’ after making a simple mistake

Martin Lewis gives money-saving advice on VED car tax

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According to Peter Vardy, drivers will pay “more in the long run” by making payments every month instead of upfront. They say petrol and diesel drivers could save at least £29 per year by paying tax costs in one annual fee.

They said: “While it may be easier to spread the cost of road tax, it ends up costing more in the long run.

“Saving up to pay it in one lump sum can save you £29 per year.”

The warning comes after Nerd Wallet found the average British driver spends over £3,400 on their car every year.

GOV.UK has confirmed drivers will pay more if they opt for a monthly car tax charge.

They said: “The amount you pay depends on how often you want to make a payment.

“There’s a five percent surcharge if you pay monthly [or] every six months.

Experts at the AA have also warned paying an annual lump sum is “the cheapest option” for road users.

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But, they have warned drivers will have to remember to make the payment every 12 months to avoid being caught out.

They said: “If you choose a lump sum, you’ll have to remember to make the payment at the right time.

“If you have a monthly direct debit, the payments will automatically come out of your bank account each month.

“However, you’ll need to check whether it auto-renews each year, and you’ll need to set it up again if you buy a new car.”

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