Cars with cheap road tax

Grab a used bargain with these cheap-to-tax cars that slash your road tax (VED) bills

Murray Scullion James Wilson
Aug 29, 2019

No one likes to pay tax, so why pay more than you need to? Pick the right car and you can slash how much you have to shell out in road tax by hundreds every year.

When searching for a vehicle with cheap tax (we are talking about cars that are only £20 or £30 here, or come with free tax in a few cases), it is simplest searching for cars which were registered before April 1, 2017 (unless you're planning to get an electric car, that is).

The reason being, the government updated the taxation rules in 2017, meaning that Vehicle Excise Duty (VED) aka road tax for low-emission petrol and diesel cars registered after this date went up. Brand new cars that were previously just £20 a year to tax, suddenly cost at least £145 a year.

While the old system uses CO2 emissions to calculate tax and the April 2017-on system does to determine cars' first year tax figure - which vary from £0 to £2,135 - petrol and diesel cars registered after that date are charged a figure based upon their fuel type and initial price. 

Petrol and diesel cars are charged £145 per year - after the first year which has CO2-based bands - with hybrids and other 'alternative' fuel vehicles being charged £135. Fully electric cars, meanwhile, are free to tax. On top of these amounts, cars that cost more than £40,000 new - including options - are charged a £320-per-year surcharge for the first five years.

Road tax for pre-2017 cars, on the other hand varies from £0 to £570 per year. Choose a low-emission pre-2017 model, therefore, and you can save yourself up to £465 per year in tax compared with a new equivalent.

A word of warning about diesel cars on this list though - while they’re cheap to tax now, they may be liable for future diesel charges. Low-emission zones, such as the London ULEZ area already charge models that don't meet certain emission standards £12.50 per day to enter. Check out the ULEZ-exempt cars, vans and motorbikes here.


Cars with cheap tax

1. Toyota Prius

 Cost to tax (12 months) £0
Toyota Prius deals from £15,658
Finance from £221 per month

The Toyota Prius is the car that brought hybrid motoring to the masses. It set out trying to answer the question of how to cut emissions around town before most people had time to ask it. Thanks to this, pre-2017 models emit less than 100g/km of CO2 and therefore pay zero road tax.

Toyota managed to get the latest generation of Prius out of the door before the changes to the tax system came. This means that you can scoop up one of the latest models if you search carefully and save yourself £145 a year in tax – which you can put towards your petrol bills.

Toyota Prius buying guide

2. BMW 3 Series 330e

Cost to tax (12 months) £0
BMW 330e deals from £15,599
Finance from £233 per month

You can have your cake and eat it with the the plug in model from the BMW 3 Series range - the 330e. You get a cracking looking saloon, a decent drive and low car tax to boot. This is all thanks to the ‘e’ in the name - it signifies that the 3 Series has a plug-in hybrid powertrain, meaning there's battery power and an electric motor to boost fuel economy and power. The result is a car you pay zero tax on.

The claimed economy is 134.5mpg, which while impressive will be almost impossible to achieve in the real world. To get anywhere near that you will need to charge the 330e up as often as possible, as the more you use you the batteries to power you down the road, the less fuel the engine will use.

BMW 3 Series buying guide

3. Volkswagen Up 1.0 Take Up

Cost to tax (12 months) £20
VW up! deals from £4,995
Finance from £91 per month

The Volkswagen Up is one of the most grown-up city cars you can get, providing the low costs and easy-to-drive plus points of most city cars while adding the feeling of being a much bigger car.

The Up is surprisingly big inside, and can seat four adults without proving too close to comfort for all but the most friendly of friends. It’s agile, fun, and easy to park too.

Lowest specification Take Up models registered before April 1 2017 will set you back just £20 to tax for the year.

Volkswagen Up buying guide

4. Vauxhall Astra 1.0 ecoFLEX

Cost to tax (12 months) £20
Vauxhall Astra deals from £5,950
Finance from £107 per month

Like the Ford Fiesta on this list, Vauxhall’s 1.0-litre engine uses a turbocharger to make the car as powerful as older 1.4 and 1.6-litre engines, while keeping the high fuel economy and low emissions of a traditional 1.0-litre when driven gently.

The Astra is one of the best all-round family hatchbacks, due to its high comfort levels and space inside. Tech Line models have sat-nav, heated front seats and alloy wheels, making them feel well-equipped for the money.

Vauxhall Astra buying guide

5. Citroen C4 Cactus 1.2 PureTech

Cost to tax (12 months) £20
Citroen C4 Cactus deals from £5,750
Finance from £110 per month

Just look at it! Not only do used Citroen C4 Cactus’ get you cheap tax, but they also come with those funky plastic bubbles on the sides, known as airbumps. Newer versions of the car ditch the plastic patches, so if you like them, a used Cactus is for you.

These characterful Citroens really stand out on the road, even in a sea of other crossovers. Not only is it quirkier than most competitors, it’s more comfortable than them too, focusing on providing a relaxing rather than a sporty drive. The front seats are like armchairs, and if you opt for an automatic gearbox it’s almost like driving an armchair.

Citroen C4 Cactus buying guide

6. Lexus IS 300h

Cost to tax (12 months) £10
Lexus IS deals from £14,480
Finance from £222 per month

Sports cars and low emissions go together like an overflowing egg mayonnaise sandwich and a first date. However, for those who want cheap tax, and a somewhat sporty drive, there are a few options.

The Lexus IS 300h F-Sport is the most obvious. It has a 2.5-litre petrol engine, plus an electric motor, which together produce 223hp and provide a 0-62 mph time of 8.4 seconds.

It looks the part too with its aggressive and sharp lines, and it’ll be comforting to know that Lexus always places well in the most reliable car lists, so it should prove an easy used car to live with.

Lexus IS buying guide

7. Mercedes C-Class C220d

 Cost to tax (12 months) £20
Mercedes C-Class deals from £11,190
Finance from £155 per month

Mercedes’ C-Class is a well-established comfortable and high-tech saloon. New models start at around £29,000, so by opting for a 2016 model you can save yourself around £120 a year in tax, plus, around £9,000 in purchase price.

Your £20,000 will afford you a 220d model that strikes the best balance in the range between speed and running costs. The Sport specification gets sat nav, a reversing camera, plus heated leather seats.

Something to keep in mind is the potential for diesel car surcharges in the future. A vast majority of diesels registered before September 2015 already have to pay a daily charge to enter central London, with an increasing number of cities looking to introduce emission charging. Therefore, if this concerns you and you're looking at diesel models, it's worth hunting down a model that meets 'Euro 6' emissons standards to protect yourself against further charges in the near future.

Mercedes C-Class buying guide


8. Fiat Panda 1.2

Cost to tax (12 months) £30
Fiat Panda deals from £4,199
Finance from £81 per month

The Fiat Panda is cheap to run, has a practical interior, and has an utilitarian air to it which many people will appreciate. Inside, there are 14 storage cubby holes, which is a truly epic amount in a small car.

This practicality is great if you regularly carry lots of little things, or generally treat your car as a bin. The Panda is quite tall for a car of this size too, which means there’s plenty of room for tall passengers, even in the rear.

It has soft suspension that makes it soak up potholes well, and is pretty comfortable. The 1.2-litre engine in question is slow, but relatively economical meaning you shouldn't have to fill it up too often.

Fiat Panda buying guide

9. Ford Fiesta 1.0 EcoBoost

Cost to tax (12 months) £30
Ford Fiesta deals from £5,200
Finance from £98 per month

The Fiesta has been the best selling car in the UK for years and years and years, and is incidentally, still top of the sales charts. Ford’s 1.0 EcoBoost petrol engines are economical and powerful enough for most situations, plus it’s one of the cheapest ways into a car with an automatic gearbox.

It offers the same sort of power as a traditional 1.4 or 1.6-litre engine, with the lower running costs and emissions of a 1.0-litre. It’s a brilliant little engine and the one to go for when picking a Fiesta, even if these models are a little more expensive than the older, slower, and more polluting 1.25-litre model cars.

Ford Fiesta buying guide

10. Skoda Superb 2.0 TDI

Cost to tax (12 months) £30
Skoda Superb deals from £7,690
Finance from £143 per month

Few cars can touch the Skoda Superb as an all-round motoring proposition. It blends serious practicality with an upmarket vibe, and it’s supremely comfortable too. Best of all, new and used prices make it great value.

While the smaller engined models qualify for an even lower tax band, models with the 2.0-litre diesel offer a great blend of performance and economy. There is plenty of room up front and in the back, along with a large boot.

As with the other diesels on this list, there could well be a diesel surcharge in the near future for driving it in a densely populated area, so keep that in mind when evaluating your options and focus on September 2015-on cars to give yourself the best chance of being able to bypass these charges.

Skoda Superb buying guide


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