Ford has confirmed that the full benefit of the 2.5 per cent reduction in VAT announced in the Chancellor’s pre-Budget statement yesterday, will be passed on to its passenger car customers.

Furthermore Ford will action the savings at all its UK dealerships nationwide with immediate effect on car orders, provided payment and legal transfer takes place on or after the December 1 official start date.

The new 15 per cent VAT rate will remain in place until the end of 2009, and is applied on all new Ford cars including the recently-launched all-new Fiesta, where it represents a saving of approximately £200. Customers can expect to save around £350 on a £15,000 Ford Focus and £500 on a Ford Mondeo, S-MAX or Galaxy. Existing Ford owners will also save money on Ford’s parts and service prices, which also benefit from the 2.5 per cent tax reduction.

Responding to the Chancellor’s announcement, Roelant de Waard, chairman and managing director, Ford Motor Company Limited said: “We are pleased that the Government has taken such decisive action, and we hope the tax reduction will encourage more customers to visit their local Ford dealership. However, we are slightly disappointed that duty on fuel has been increased at the same time.”

“We won’t wait for December 1 and will take orders at the new and reduced VAT rate as of today”, he added.