Red Mini Hatch driving along a London street

Best cars with low road tax

Car tax is one of many expenses to consider when buying a car. Here’s our list of the best cars with low road tax to help you find a cost-effective option to suit your needs.

Phill Tromans Cazoo

By Phill Tromans

Published: 7 December 2023

If you’re looking to buy a used car, finding one with a low car tax (also known as road tax) rating could help to keep your overall ownership costs down. 

This fee can reach hundreds of pounds a year, but with a bit of research, it’s possible to pick a used car that will cost you hardly anything in car tax. How does £35 a year sound? Or £20? Or even zero?

How is car tax calculated?

Car tax, also known as road tax or by the official term Vehicle Excise Duty (VED), is linked to a vehicle’s polluting CO2 exhaust emissions, as measured by an official test. New cars are taxed for the first year based on these emissions and after that at a flat rate, currently £180 a year (or £170 for alternative-fuel cars, such as hybrids). Electric cars are the exception, as they cost nothing to tax until 2025 (when the regulations change).

However, the current rules only apply to cars first registered from 1 April 2017. Cars registered before then are subject to different rules basing every year’s tax on CO2 emissions rather than just the first year’s. So if you find a car with low emissions, car tax could cost you very little indeed.

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Which older cars have low road tax?

Cars registered before April 2017 may fit into one of several tax bands: A (no tax), B (£20) or C (£35). To qualify for those categories, the cars will need to emit less than 120g/km of CO2 according to official figures. Cars that emit more than that jump up to £150 a year and more.

How can I reduce my road tax?

If you drive a car that’s not exempt, you’ll have to pay road tax and the amount is not negotiable. That said, to pay the least amount possible, try to pay for the year up front in one go. You can pay for it monthly by direct debit, but it’ll cost you slightly more overall. If you pay for a year, then  sell your car, you can cancel the road tax and claim back any outstanding amount.

Who is exempt from road tax?

Technically, most cars that pay £0 car tax aren’t exempt – they still have to be taxed, it’s just that the amount due is zero. However, some cars do qualify as exempt.

If a car is used by a disabled person, for example, you can apply for a disability exemption if the circumstances meet certain eligibility criteria. You can see the full list on this government website. Vehicles used by organisations providing transport for disabled people are also exempt.

What year cars are exempt from road tax?

Vehicles more than 40 years old are exempt from the road tax system. As of late 2023, that meant cars made before 1 January 1983 or registered before 8 January 1983. If your car is old enough, you can apply for a vehicle tax exemption to stop paying road tax.

What are the cheapest cars to tax?

If you want the very cheapest car tax, you’ll want to look first at an electric car, as they’re all subject to zero VED until 2025.

If an electric car isn’t right for you there are lots of petrol and diesel cars registered before April 2017 that attract very low tax rates if you choose the right model. We’ve rounded up a list of our favourites below.

BMW 2 Series

You might think that low road tax cars have to be smaller and towards the more affordable end of the spectrum, but the BMW 2 Series shows that isn’t always the case.

This is a premium-brand coupe that’s fantastic to drive, with a comfortable and beautifully made interior packed with some high-end features. If you opt for one of the diesel models, you could cut your car tax bills to just £20 or £35 per year – look for 218d or 220d models registered before April 2017. If you’re worried that low tax equals low power, don’t be – the 220d has 190bhp, which makes for pretty sporty performance.

Ford Fiesta

The Ford Fiesta has been at – or near –  the top of the UK car sales charts for years, which means you can find loads to choose from on the used market. The Fiesta is one of the best small hatchbacks you can buy, and its appeal is even greater when you consider that you could pay little to no car tax on it.

Look at the previous-generation model, sold new between 2008 and 2017. Some of the diesel models with the 1.5 TDCi or 1.6 TDCi engines will cost you absolutely nothing in car tax while the 1.4 TDCi diesel (and some 1.6 TDCIs) cost you just £20 a year.

There are petrol options, too – the lower-powered 1.0 EcoBoost models will cost nothing, while the more powerful versions of the same engine up to 140bhp are £20. You could also keep an eye out for 1.25-litre petrol models from between 2012 and January 2015, which will cost you £35 a year in tax.

Hyundai i10

Any Hyundai i10 is cheap to run, but there are plenty of models that also attract very low car tax. Two versions cost nothing – the 1.0 SE Blue Drive and the 1.0 SE Blue from early 2017.

Then there are several with annual tax bills of just £20, including 1.0 models from before April 2017 across a range of trims. Several 1.2-litre petrol models also offer car tax of just £35 a year – look for SE and Premium models with a manual gearbox rather than an automatic, which costs you more in tax. Go for a Hyundai i10 and you’ll add low car tax to lots of other benefits, including a surprising amount of interior space for such a small car.

Mazda 3

The Mazda 3 is a great family hatchback. It’s engaging and fun to drive, with smart looks and some economical engines that attract very low car tax. As with the other cars on this list, you’ll want to look at examples registered before April 2017.

Two diesel models will cost you nothing in car tax – the 1.5d and the later SkyActiv-D 105. The larger, more powerful 2.2d will cost just £20 a year if you go for a manual gearbox rather than an automatic, as will the later SkyActiv-D 150 model. If you want a petrol model you’ll have to splash out a bit more in tax, although there are several versions that will cost just £35 a year. Look for the 1.5 or 2.0, or the later SkyActiv-G 120 model. The automatic version of the 1.5d diesel will also cost just £35.

Mercedes-Benz GLA

A Mercede-Benz SUV with low car tax? No, it’s not a dream. Opt for one of the entry-level diesel models of the 2014-2017 Mercedes-Benz GLA-Class and you can enjoy a lofty driving position and the prestige of the famous Mercedes three-pointed star with car tax of just £20 or £35 per year.

You’ll also get the additional benefit of excellent fuel economy from either the 200 CDI engine or the later 200d (as long as it was registered before April 2017). These engines were made across several trim levels, so you should have a good amount of choice on the used market.

Mini Hatch

The latest Mini Hatch has been on sale since 2014 but remains as popular today as ever. That means there are lots of used examples available, and several models are available with low car tax. The cheapest is zero tax: that’s the 1.5 Cooper D model sold before April 2017.

Some combinations of that particular engine with options packs push the CO2 emissions up slightly and into the next tax bracket, but that’s still just £20 a year. Also in the £20 bracket is the diesel-powered 2.0 Cooper S Dand a few models with the 1.2-litre Mini One petrol engine. Other examples of that same petrol engine veer into the next higher bracket, as do some of the 2.0 Cooper S Ds, but even those models cost only £35 a year.

Nissan Qashqai

Need a family SUV with great fuel economy and low car tax? Take a look at the 2014-2017 Nissan Qashqai, specifically one with a 1.5 dCi or 1.6 dCi diesel engine.

Depending on the trim level and the options fitted when the car was new, the Qashqais will cost you either £0, £20 or £35 a year in road tax. Not much to pay for a car that’s roomy, practical and drives well. All trim levels are well-equipped for the money, making it a great car for those who don’t want to overly compromise in the search for cost savings.

Peugeot 3008

Another brilliant family SUV is Peugeot’s 3008. Introduced in its current form in 2016, models sold until the VED rule change in April 2017 can be found with car tax as low as £20.

To find that lowest rate, look for the 1.6 BlueHDi 100 diesel engine, available in a range of trim levels. If you’re set on a petrol model, then the excellent 1.2 PureTech 130 model attracts a tax rate of just £35. Not bad for a car with very distinctive looks, a similarly eye-catching interior and a general air of quality that many of its rivals can’t match.

Renault Kadjar

Introduced in 2015, the Renault Kadjar is a comfortable, stylish and feature-packed family SUV with some very strong engines, some of which will cost you very little in car tax.

To benefit from no car tax at all, you’ll need to find one with a 1.5 DCi diesel engine sold until April 2017 in either Expression + or Dynamique Nav trim. Both manual and automatic gearbox models qualify for this lowest of low tax rates. If you can’t find them, look for  trim levels with the same engine that have a tax rate of £20 – the Dynamique S Nav, Signature Nav and Signature S Nav. Failing that, the later 1.6 dCi diesel engine in Dynamique Nav, Dynamique S Nav, Signature Nav and Signature S Nav come with a bill of just £35 a year.

Volkswagen Golf

The Volkswagen Golf sold from 2013 is one of the best used hatchbacks you can buy, and the possibility of low car tax is simply the icing on the cake.

At the lowest end of the taxation spectrum are the 1.6 TDI 105 and 110 diesel and 1.0 TSI petrol models, many of which carry a tax bill of absolutely nothing. Some of these models from the end of 2016 until April 2017 rise into the £20 category, but for zero car tax you could also consider the hybrid GTE models, which have extra performance from their 1.4 petrol engine and electric motor combination. Other Golfs that cost either £20 or £35 per year to tax (depending on power and when they were released) include a range of 2.0 TDI diesel and 1.4 TSI petrol models.

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