Cars with cheap tax

Bag yourself a used bargain with these cheap to tax cars

Murray Scullion James Wilson
Apr 17, 2019

When spending thousands and in some cases, tens of thousands of pounds on a car, the chance to save a hundred quid here and there might seem trivial. But if that saving is repeated year after year you will be surprised by how much you can save.

When searching for a vehicle with cheap tax (we are talking about cars that are only £20 or £30 here, some are even completely free), it is best searching cars which were registered before April 1, 2017.

The reason being, the UK Government updated the taxation rules then, meaning Vehicle Excise Duty (VED) aka road tax, went up. Cars that were previously just £20 a year to tax, suddenly cost at least £150 a year.

Both old and new systems use CO2 emissions to calculate tax, only after March 2017 the goal posts were moved. One important difference between the systems is that the older one used letters to denote which band a car sat in, starting with A and ending at M. The further along the letter was in the alphabet the more it costs to tax.

What’s more, the maximum VED motorists could pay shot up from £570 to £2,135.

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


Cars with cheap tax

1. Toyota Prius

Cost to tax (12 months) £20
Toyota Prius deals from £13,412
Finance from £190 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 the world was going to reduce its transportation emissions before most people had time to ask it. Thanks to this, pre-2017 models emit sub-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 leading lights in the hybrid world and save £110 a year in tax – then you can add on all the money you will save in fuel, too.
Toyota Prius buying guide

2. BMW 3 Series 330e

Cost to tax (12 months) £20
BMW 330e deals from £19,447
Finance from £286 per month

You can have your cake and eat it with the BMW 3 Series 330e. You get a cracking looking saloon, decent driving dynamics 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. 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 £5,089
Finance from £89 per month

The Volkswagen up! (despite the exclamation mark in its name) is the most grown-up car in the city car segment of the market, and is the easiest to live with. It’s surprisingly big inside, and can seat four adults without making it too close to comfort. It’s agile, fun, and easy to park too.

Lowest specification Take up! models registered before April 1 2017 will set you back £20 for the year.
Volkswagen up! buying guide

4. Vauxhall Astra 1.0 ecoFLEX

Cost to tax (12 months) £20
Vauxhall Astra deals from £5,690
Finance from £108 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 a 1.4 or 1.6-litre engined car, but with the economy and emissions of a 1.0-litre.

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.
Vauxhall Astra buying guide

5. Citroen C4 Cactus 1.2 PureTech

Cost to tax (12 months) £20
Citroen C4 Cactus deals from £6,990
Finance from £117 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.

These characterful Citroens really stand out on the road, even in a sea of other crossovers. Not only is it quirkier than competitors, it’s more comfortable than them too. The front seats are like armchairs, and if you opt for an automatic gearbox it’s almost like driving a La-Z-Boy.
Citroen C4 Cactus buying guide

6. Lexus IS 300h

Cost to tax (12 months) £10
Lexus IS deals from £16,485
Finance from £180 per month

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

The Lexus IS 300h F-Sport is the most obvious. It has a 2.5-litre engine, plus hybrid power, which gives it 223bhp and 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.
Lexus IS buying guide

7. Mercedes C-Class C220d

Cost to tax (12 months) £20
Mercedes C-Class deals from £10,999
Finance from £169 per month

Mercedes’ C-Class is a well-established, luxurious, and hi-tech family car. New models start at around £28,000, so by opting for a 2016 model you can save yourself around a £120 a year in tax, plus, around £8,000 in purchase price.

Your £20,000 will afford you a 220d engine 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. In an attempt to kerb the amounts of harmful emissions being released in densely populated areas, a number of cities across the globe are said to be considering some degree of diesel ban.
Mercedes C-Class buying guide


8. Fiat Panda 1.2

Cost to tax (12 months) £30
Fiat Panda deals from £4,219
Finance from £75 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. It’s great if you regularly carry lots of little things, or generally treat your car as a bin. It’s 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 economical and green.
Fiat Panda buying guide

9. Ford Fiesta 1.0 Ecoboost

Cost to tax (12 months) £30
Ford Fiesta deals from £5,727
Finance from £101 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 engine is economical and powerful enough for most situations, plus it’s cheapest ways into a car with an automatic gearbox.

It offers the same sort of power as a bigger 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 2.0TDI

Cost to tax (12 months) £30
Skoda Superb deals from £10,999
Finance from £168 per month

Few cars can touch the Skoda Superb as an all-round motoring proposition. It blends practicality with an upmarket vibe, and it’s supremely comfortable too.

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.
Skoda Superb buying guide


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