Road tax-free cars

Keep your money out of the Chancellor's hands with a road-tax free car - choose from thousands of models

BuyaCar team
Apr 24, 2019

Cake is a national obsession for us Brits. You only need to look at viewing figures for The Great British Bake Off (around 7 million) to understand this.

This cake obsessed nation of ours also invented the idiom, to have your cake and eat it. With a road tax-free car, you can have your cake, and devour it whole - because you get the benefits of a car, but don’t have to pay an annual fee to the government (sadly insurance and fuel, or electricity costs still apply).

Finding a tax-free car used to be simple, but the system changed in April 2017, drastically reducing the number of new cars that were available without tax. If you're buying used, it's worth finding a car that was already on the road before the change, for a saving of at least £400 over three years. Scroll down for more details on buying a new or used tax-free car.


Buying a used car with free road tax

For sixteen years, up until April 2017, cars were taxed purely on their carbon dioxide (CO2) emissions per kilometre (g/km). They were separated into bands from A to H, based on the level of CO2 produced. The higher the band, the more your yearly tax bill would be.

This was a great system if your car emitted 100g/km CO2 or less because this put it into Band A, where tax was free. Manufacturers began engineering their cars so that they fell just below the limit when tested for emissions, to the point that one in five new cars sold in 2015 was tax exempt - and the Treasury began to see tax revenues fall.

This led to a complete change in the system and since April 2017, the only new cars entirely free of tax have been electric. However, the government left the old system in place for cars that were registered and on the road before April 2017. Hundreds of thousands of vehicles remain tax-exempt and will typically save you more than £400 over three years, compared with buying a car that's taxed uner the new system. 

As well as small cars, you can buy a tax-free Volvo V40, Audi A3, Nissan Qashqai, Mini Cooper D and even a Jaguar XE (above). BuyaCar currently has 2029 tax-exempt cars cars for sale, which were first registered before 2017.

However, before buying, it's worth being aware of the charges being imposed in city centres, which will affect most diesel cars, including many tax-free models. London has been operating its ULEZ (Ultra-Low Emission Zone) since April 2018. Most diesel cars that were on the road before September 2015 are subject to a £12.50 daily charge to drive in the centre of the capital.

Birmingham is expected to follow with a similar scheme in early 2020, and more than a dozen other cities could create their own low emission zones.

Most modern petrol cars are exempt, as are diesel cars that comply with the latest emissions standards, known as Euro 6 - this includes every car that was registered since September 2015, as well as some models that met the standards earlier. If you have the budget and you want a diesel, it's worth opting for a Euro 6 car. 


Buying a new car with free road tax

If you're looking for a brand new car with free road tax, you’ll have to opt for something without exhaust pipes. As of April 2017, only zero emissions vehicles are road tax free.

All other vehicles are subject to a first-year tax rate that's based on their CO2 emissions, followed by a flat fee of £140 in each subsequent year.

The Nissan Leaf, Hyundai Kona Electric (above), and Renault Zoe are among the electric cars that are tax exempt, but not all electric cars are taxed in the same way because the new car tax system includes what amounts to a wealth tax.

Owners of cars that had a list price of £40,000 or more when new, must pay a £310 tax surcharge for five years - starting from the car's second year on the road until its sixth.

This means that cars like the Tesla Model S and Jaguar I-Pace do not avoid the duty.


Taxing a tax-free car

People have been inadvertently breaking the law by not ‘taxing’ their tax-exempt vehicle. That’s because, even if you do own a tax-free car, you still need to apply for tax every year. Failing to do so can result in an £80 fine or your car being clamped. It could even be towed away.


Road tax exemptions

The most notable exemption from tax is for historic vehicles, those over 40 years old. The tax-free coding for these types of vehicles is rolling and changes every year. For example, vehicles made before 1 January 1979 were exempt from tax from 1 April 2019.

Vehicles used by a disabled person, disabled passenger vehicles, mobility scooters, powered wheelchairs, and invalid carriages are also sans tax.

Mowing machines, and steam vehicles, are also tax-free.


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