Car buyers in the Mid Ulster area of Northern Ireland will pay an average of £689 extra tax next year as a result of Vehicle Excise Duty (VED) rises, a new study finds.[1] The increased first-year rates, also known as showroom tax, were announced in the Autumn Budget and are due to arrive in April next year.

While location doesn’t directly impact the amount of tax charged, the study shows which areas will be most affected by the changes due to the cars bought there. VED rates are based on CO2 output, meaning drivers of heavily-polluting cars will pay the most when the changes come into effect. Based on this, Mid Ulster motorists will see the highest average increase per car due to the rise.

The research comes from Go.Compare car insurance, which reviewed Department for Transport figures on the number of new private vehicles registered in each region in the first half of the 2024 tax year. It applied the existing and upcoming first-year rates for VED to these vehicles to estimate how much more new car buyers will pay next year in each part of the UK, if buying habits stay the same.

Mid Ulster wasn’t the only part of Northern Ireland that ranked in the most impacted areas. Fermanagh and Omagh, as well as Newry, Mourne and Down also placed in the top 10. The study says that if 2024 trends continue, drivers in these locations face average VED increases of £502 and £494 respectively.

Mid Ulster was also one of only two places facing an average rise above £600. The other is inner London, where the average tax paid is set to rise by £625 – almost £100 per car more than the next most impacted area.

This suggests that drivers in Inner London are opting for vehicles which emit some of the highest CO2 levels, despite the city operating an ultra-low emissions zone. Based on this, drivers may be choosing to pay the ULEZ charge rather than opt for a greener car.

These figures were also reflected on a regional level, as London and Northern Ireland are the two regions where the average cost per car is set to rise the most. Across all of London, the average tax increase will be £475 per car, while those in Northern Ireland will pay an extra £454.

In contrast, drivers towards the north of the UK will be less affected due to the vehicles they buy. Motorists in the North East will see the lowest VED rise, working out as an extra £384 per car on average. Welsh and Scottish drivers will also notice some of the lowest fees, with increases per car of just £397 and £404 respectively.

Tom Banks, car insurance expert at Go.Compare, said: “The increased VED rates mean most new car buyers will be paying a lot more than they were expecting in 2025. If you live in a region where buyers tend to go for high CO2 cars, then drivers in your area will be the most impacted by the rise. But, if you’re worried about how the changes will affect you, there are ways to minimise the impact on your finances.

“For instance, consider purchasing a low-emissions car that will place your vehicle in the cheaper tax bands. If you can’t purchase a suitable hybrid or EV, you could opt for a nearly new motor instead. This gives you that new car feeling for a fraction of the price, and will allow you to dodge the increased tax.

“Otherwise, see if there are any other ways you can reduce your motoring spending to make up for the increased tax costs. For example, comparing car insurance policies might allow you to find a provider that offers the same level of cover for a lower price, and driving in a way that minimises your fuel usage could help to reduce costs further.”

To find out more about the rise in first-year rates for VED, go to Go.Compare’s website.