Which Used Cars Have Zero or Low Road Tax?

So, which used cars have zero road tax? Here’s our guide to beating the Exchequer and keeping your road tax payments as low (or non-existent) as possible.

What is road tax?

Road tax, or Vehicle Excise Duty (VED) as it’s officially referred to by the government, earns the Exchequer around £40 billion a year. This translates to around 5% of total government revenue. It’s a huge cash cow and plays a big role in topping up the kitty.

Contrary to popular belief, road tax isn’t necessarily used to maintain roads and doesn’t go directly to the Department for Transport. Instead, it’s channelled to the Exchequer along with other duties such as council tax. Sure, this fund can be used to fix potholes and build new motorways. However, VED can also be put towards the construction of schools, hospitals and other government-funded projects.

What can you expect to pay?

VED rates increase with inflation and as a result, payments tend to climb every year. If you drive a petrol or diesel car registered after April 1 2017, your annual flat VED rate is £155. For alternatively fuelled cars, including hybrid, LPG and bioethanol vehicles, the rate is £145. If you drive a luxury car valued at £40,000 or higher, an additional £335 is added for your first five years on the road.

Before you switch to the flat rate, you’ll pay an initial ‘first year’ registration amount determined by CO2 emissions. This can be up to £2,365, depending on the model and environmental credentials. All this changes if you drive an emissions-free vehicle, with VED dropping to zero, even if your car is worth more than £40,000.

The bottom line? Go electric and unlock big savings.

Embrace the EV revolution

In 2021, battery electric vehicles (BEVs) accounted for around 4% of new car sales in the UK. This may seem small, but it represents a huge leap compared to the 0.6% market share BEVs occupied in 2019. This is great news for used car buyers as an increase in new BEV sales translates to more choice on the preowned market. Today, you’re spoilt for choice with a huge range of all-electric saloons, hatchbacks and SUVs.

According to the UK government website “the electricity must come from an external source or an electric storage battery not connected to any source of power when the vehicle is moving to be exempt”.

Here are a few of our favourite models if you’re wondering which used cars have zero road tax.

Tesla Model S 2014

In 2014, a brand new Tesla Model S came with a price tag of up to £96,000. Opt for a second-hand model in 2022 and you can slash your budget to as low as £22,000. The high-end Model S was considered state-of-the-art in its day and still holds its own against newer models. The seven-seat models can take you from zero to 62mph in just 2.5 seconds, meaning the Tesla Model S doesn’t compromise on speed or power.

Sure, the latest Tesla models may feature exciting new bells and whistles, but the overall design remains very similar. All Tesla models continue to rely on the Supercharger network which means you won’t run into any headaches when looking for places to power up.

Nissan Leaf 2010

In its heyday the Nissan Leaf 2010 sold for between £30,000 to £40,000. Today, you can snap one up for as low as £3,000, depending on mileage. You’ll enjoy a compact size for easy inner-city driving and parking, excellent safety features and a surprisingly spacious interior. What’s not to love? A 108bhp motor promises plenty of power and while you won’t be able to hit more than 93mph, this punchy little model is perfect for urban driving.

Jaguar i-Pace 2018

If you want to go electric but would prefer a newer model, consider the Jaguar i-Pace 2018. In its launch year the Jaguar i-Pace would have cost you around £65,000. More if you wanted extra features. Today you can score these luxury EVs for as little as £40,000 and pay zero road tax. What’s more, the newer release date means the market isn’t flooded but if you can get your hands on a used Jaguar i-Pace 2018 you won’t regret it.

Opt for low emissions and save

Another great way to keep your road tax to a minimum is to opt for a low emissions vehicle. Road tax is determined by CO2 emissions which means the greener your car, the less you’ll pay. So, which used cars have low road tax?

Aim for a vehicle that falls into the 1 to 50 CO2 emissions (g/km) bracket and you’ll pay just £10 for your first-year registration tax. For cars in the 51 to 75 CO2 emissions (g/km) range you’ll pay £25. Compared to the £2345 you’ll have to fork out for vehicles with emissions of 255g/km or higher, the savings for low-emissions vehicles are enormous.

Go retro and avoid road tax

Wondering which used cars have low road tax? The UK government has confirmed that vehicles manufactured before 1 January 1981 are exempt from road tax. Why? It’s generally assumed vintage cars won’t rack up enough miles to make a significant contribution to CO2, hence the exemption. As such, if you’re willing to take your chance on a car manufactured before 1981, this could be a novel way to avoid road tax.

Get behind the wheel of a used car today

Now you know more about which used cars have zero road tax, it’s time to start shopping. Whether you’re searching for a used Ford Fiesta, a preowned Vauxhall Corsa or an eco-friendly electric model, we’re here to help. Check your car finance eligibility online or get in touch with the My Car Credit team to find out more about how we can get you behind the wheel of a low-tax used car and unlock big VED savings in the process.