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Fleets face yet another Government cost hike

Date: 28 March 2007

Car prices look set to rise on May 1 when the first registration fee rises from £38 to £50.

The tax on registering new cars is also set to rise at the start of April in 2008 and 2009, however the level of the increase has yet to be confirmed.

The rises only effect those cars registered on or after 1 May, irrespective of transaction date.

The increase follows a consultation which concluded in August last year. The consultation looked into how the DVLA could increase its revenue to cover areas including combating vehicle crime, improved technology and improve customer service.

A straw poll of the top business car manufacturers by BusinessCar revealed a mix of pricing reactions to the changes.

BMW was the only car maker to confirm it would not pass the £12 hike on to its customers and would stick to . However, Mercedes said it was considering the situation, but may also absorb the increase because it had just reprinted its price lists.

Vauxhall, Saab and Chevrolet said they would look at cars on a case-by-case basis. It is believed it may hold the price of some vehicles and increase on others.

Audi was understood to be planning to absorb part of the increase.

Meanwhile, the DVLA's fee for a first driving licence will be increased to £45 (from £38) and the fee for replacing a paper licence with a photocard will be cut to £10 (from £19).