Quick overview - the proposed Bonus malus system

Cars with low CO2 emissions will get a bonus as of 1st July 2018. Cars with high CO2 emissions get a punitive tax to be paid for three years. The changes apply to new cars and are part of the government’s so called Bonus malus system, the system is expected to pass through parliament in December of this year.

Everybody who gets a new car with a registration from 1st July 2018 will be affected by the new Bonus malus system. The changes are expected to pass through parliament in December this year.

The outlines of the proposal are that cars with low emissions – less than 60 grams CO2 per kilometer – will get a bonus in the form of a reduction on the purchase price. The bonus is capped at SEK 60 000. Cars with higher emissions – over 95 grams CO2 per kilometer – get a penalty (“malus”). That extra cost is paid as a vehicle tax during three years.

The extra cost increases for each gram that the car emits over the 95 grams limit. The cost increases further for emissions over 140 grams CO2 per kilometer.

 

What do changes mean in practical terms?

- It may on the face of it seem that the cost for the car fleet will increase substantially for everybody, but it’s important to remember that it only applies to new cars and that there are big differences between different kinds of cars, says Roger Boström, CEO NF Fleet. He notes that the changes points towards a future direction.

- It’s about giving incentives towards a development of lower fuel consumption and alternatives. It doesn’t mean that everybody will get an electric car, but maybe more will choose a hybrid, Roger Boström continues.

Anyone choosing a diesel car after the 1st of July next year will look at increased costs. It’ll be about SEK 5 000 per year in increased taxes. It will also mean that the taxable benefit will increase for such a company car.

- The net effect could be an increase of SEK 200-300 per month for the driver of a normal family car with a marginal tax rate of 50 %. But there are big variations, Roger Boström notes.

The largest cost increases will be for companies with many transport and service vehicles, Roger Boström anticipates. Many larger transport vehicles have emissions of more than 175 grams CO2 per kilometer.

There is another factor apart from the Bonus malus system which will be important for emission issues. A new measuring method (WLTP) will be implemented giving each car its individual value. This value depends of course on the car, but also for example which tyres, rims and extra equipment it is fitted with. WLTP was introduced 1st September 2017 for brand new models. All vehicles registered from 1st September 2018 shall account for their emissions according to WLTP. The Bonus malus system will start using WLTP from 1st January 2020 for all vehicles.

- It would be wise to start following the new WLTP values from 1st July 2018 in order to prepare for the possible changes to car policies, choice of car etc. that might become necessary, Roger Boström concludes.

A summary of Bonus malus

  • The Bonus malus system is a proposal aimed at rewarding cars with low CO2 emissions. The buyer receives a bonus, a rebate on the purchasing price, six months after the purchase.
  • Cars with high CO2 emissions are debited with a higher vehicle tax for three years.
  • Existing cars and cars registered before 1st July 2018 are not affected by Bonus malus and existing rules apply.
  • Bonus malus is Latin for good bad.
  • Parliament is expected to make a decision on the Bonus malus system in December. The rules come in to effect 1st July 2018.

 

Further information

For further information and FAQ regarding Bonus malus click here (in Swedish). You can also contact NF Fleet’s customer service on 08-501 123 80 or kundservice@nffleet.com if you have any questions.

There is more information in Swedish on the government’s home page here and here.