Cars with low road tax

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

BuyaCar team
Sep 20, 2021

Buying a car is always something of a two stage process. Sure you have to pay for the car, but you also need to get it insured and taxed before you can drive it. These costs can add up, and your final decision on which car you buy might well be swayed by how much it costs to run.

There are several ways you can go if you're looking for cheap car tax, the most obvious would be to opt for a zero-emission car, otherwise known as an electric car, because they are free to tax (but you still need to fill in the form). The only balance here is that electric cars are more expensive to purchase than petrol or diesel alternatives, and often the savings you make on road tax and other running costs can take years to amount to an overall gain when all the chips are counted.

Cars with cheap tax

The government updated the road tax rules in 2017, meaning that Vehicle Excise Duty (VED) - that's what the government calls car tax - was increased for all new cars registered since April 1 2017. Brand new cars that were previously only £20 a year to tax, suddenly jumped to at least £155 a year as a result.

While the old system uses CO2 emissions to calculate tax, the current system uses that same calculation to determine a cars' first year tax figure only - this can vary from £0 to £2,245. Petrol and diesel cars registered since the rule change are taxed according to their fuel type and initial price, as in the table below.

CO2 EmissionsEuro 6d Diesels and all PetrolsAll other DieselsHybrids and alternatives
0g/km£0£0£0
1-50g/km£10£25£0
51-75g/km£25£115£15
76-90g/km£115£140£105
91-100g/km£140£160£130
101-110g/km£160£180£150
111-130g/km£180£220£170
131-150g/km£220£555£210
151-170g/km£555£895£545
171-190g/km£895£1,345£885
191-225g/km£1,345£1,910£1,335
226-255g/km£1,910£2,245£1,900
Over 255g/km£2,245£2,245£2,235

 

Petrol and diesel cars are charged £155 per year - after the first year which has CO2-based bands - with hybrids and other 'alternative' fuel vehicles being charged £145. 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 £335-per-year surcharge for the first five years after purchase.

Year 1Years 2-6Year 7 onwards
Petrol or diesel (under £40,000)£10-£2,245£155£155
Petrol or diesel (over £40,000)£10-£2,245£490£155
Hybrid or alternative (under £40,000)£0-£2,235£145£145
Hybrid or alternative (over £40,000)£0-£2,235£480£145
Electric (any price)£0£0£0

 

Road tax for pre-2017 cars, however, varies from £0 to £600 per year depending solely on emissions figures. Choose a low-emission pre-2017 model, therefore, and you could save money on tax.

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-compliant cars, vans and motorbikes here.

Cheap cars to tax

1. Toyota Prius

Cost to tax (12 months) £0
Used deals from £16,500
Monthly finance from £268*

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. Newer models emit between a minimum of 104g/km making them £150 to tax in the first year, and £145 thereafter.

Toyota did manage to get the latest generation of Prius out of the door before the changes to the tax system came, though. 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. The same car, but tax-free!

TOYOTA PRIUS BUYERS' GUIDE

2. BMW 3 Series 330e

Cost to tax (12 months) £0
Used deals from £17,495
Monthly finance from £286*

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 as well as 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.

Buy one of the latest models, though, and you'll be paying £480 a year from the second year onwards because the car costs £30 more than the £40,000 threshold, forcing you to pay more in tax.

BMW 3 SERIES BUYERS' GUIDE

3. Volkswagen Up 1.0 Take Up

Cost to tax (12 months) £20
Used deals from £4,399
Monthly finance from £99*

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. The most efficient brand new models will cost at least £180 to tax in the first year.

VOLKSWAGEN UP BUYERS' GUIDE

4. Vauxhall Astra 1.0 ecoFLEX

Cost to tax (12 months) £20
Used deals from £4,499
Monthly finance from £137*

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 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 BUYERS' GUIDE

5. Citroen C4 Cactus 1.2 PureTech

Cost to tax (12 months) £20
Used deals from £6,680
Monthly finance from £150*

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.

The latest, re-designed C4 comes with petrol and Euro 6d-compliant diesel engines as well as an all-electric version which means zero road tax.

CITROEN C4 CACTUS BUYERS' GUIDE

6. Lexus IS 300h

Cost to tax (12 months) £10
Used deals from £20,940
Monthly finance from £308*

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 BUYERS' GUIDE

7. Mercedes C-Class C220d

Cost to tax (12 months) £20
Used deals from £12,300
Monthly finance from £239*

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. If you're unsure, check the vehicle specification or contact a Mercedes garage to check.

MERCEDES C-CLASS BUYERS' GUIDE

8. Fiat Panda 1.2

Cost to tax (12 months) £30
Used deals from £4,290
Monthly finance from £85*

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 storage 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 BUYERS' GUIDE

9. Ford Fiesta 1.0 EcoBoost

Cost to tax (12 months) £30
Used deals from £5,690
Monthly finance from £124*

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-litre 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 BUYERS' GUIDE

10. Skoda Superb 2.0 TDI

Cost to tax (12 months) £30
Used deals from £12,999
Monthly finance from £229*

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 densely populated areas, 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 BUYERS' GUIDE

*Representative PCP finance - Ford Fiesta:

48 monthly payments of £192
Deposit: £0
Mileage limit: 8,000 per year
Optional final payment to buy car: £2,923
Total amount payable to buy car: £11,926
Total cost of credit: £2,426
Amount borrowed: £9,500
APR: 9.9%

BuyaCar is a credit broker, not a lender. Our rates start from 6.9% APR. The rate you are offered will depend on your individual circumstances.

 

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