Subaru UK has decided to save its new car customers from the 2.5% VAT hike.

The carmaker will absorb the increase itself in most cases, by keeping prices for 80% of its range unchanged for 2011.

Subaru UK marketing director, Kenyon Neads, said: "For the vast majority of our customers the decision not to pass on the VAT rise is great news, particularly anyone in the market for a Forester, Legacy, Outback or WRX STI Type UK."