The Liberal Democrats have called for higher taxes on large 4x4s in order to help provide fiscal incentives for people purchasing smaller efficient cars.
According to Norman Baker, buyers would get £1,000 from the government when they drove new Band A cars — which include the VW Polo BlueMotion, the Seat Ibiza EcoMotion and electric vehicles which emit 100g per CO2/km or less.
Buying one of the Band B cars would come with a £500 feebate cheque and a lower annual VED tax of about £40 to £60. Band B cars include some types of Mini Cooper, the Citroën C1 and Fiat 500 diesel — all having a CO2/km of 101g to 120g.
The incentives to go green would be covered by higher tax levies on the highest polluting cars. A showroom tax of £500, alongside £2,000 a year VED, would be imposed on gas guzzlers in the new Band M such as some Range Rover and Toyota Land Cruiser models with emissions of over 255g per CO2/km.