The Budgets passed in 2022 and 2023 by the Chancellor have both increased car tax rates, otherwise known as vehicle excise duty (VED), from 2025.
It can be hard to know how these changes affect your running costs, and whether it’s worth selling your car sooner rather than later, to avoid your finances getting out of control.
How to identify your tax band
It’s key to understand which group of vehicles yours belongs to, so you know your current rate, as well as what you can expect in the future.
Check your vehicle’s V5C logbook to find the year it was first registered. This dictates which type of tax banding your car is subject to, along with the emissions your car produces. If you can’t find your registration year or your car’s emissions easily, try running a free check online. Please note that in all tables below, alternative fuel vehicles include hybrids, bioethanol, and liquid petroleum gas (LPG).
When you find your correct registration and emissions info, scroll down to the relevant group and band below.
Cars that were first registered before March 1, 2001
If your car was first registered before 1st March 2001 then the tax rate is based simply on engine size. There are only two tiers for cars first registered before this date.
The current rate for engines up to 1549cc is £200.00 per year. The current rate for engine sizes over 1549cc is £325.00 per year.
Cars that were first registered between March 1, 2001, and March 31, 2017
Older cars that were first new between 2001 and 2017 also pay a standard VED rate annually based on their emissions, with different banding and pricing:
In 2025, the first car tax band within this table is disappearing, so all cars with fewer than 110g/km will pay the current petrol and diesel rate of £20 in VED per year.
These rates are still subject to change, and it’s possible that drivers of cars first registered between 2001 and 2017 will see their running costs change more significantly in the future.
Cars that are first registered between April 1, 2017 and March 31, 2025
Cars that were new in the last six years, and for the next year and a half, currently pay the following VED rates:
April 1, 2025, cars within this category of registrations will see the following changes:
- Zero-emission vehicles will start paying a standard rate of £180 annual VED
- Zero-emission vehicles will also start paying the expensive car supplement if applicable
It’s possible that the current first-year tax rates across all emissions levels will change.
Cars that will be first registered on or after April 1, 2025
From, April 1, 2025, VED rates for all newly registered cars are being simplified into two categories for the first year of tax, and one standard category from the second year onwards.
EVs will also start paying the expensive car supplement where appropriate, which they were previously exempt from. Based on the current rates, the following will apply:
What’s the expensive car supplement?
The expensive car supplement that applies to most vehicles registered from 2017 onwards is an extra car tax. Drivers are liable to pay this from the second to the seventh tax year of their car, if its list price was over £40,000.
This is the case even if the car is bought and sold within that time. So, if you buy a three-year-old sports car or other premium vehicle, be aware that you’ll be paying at least four years’ worth of the supplement, as well as your normal VED for that vehicle.
What should I do if my road tax is going up?
Drivers of much older cars will largely not have too much of an increase to their costs when road tax changes come into effect in 2025. However, for EV drivers, as well as drivers of new and low-emission vehicles, the costs of their greener choices are unfortunately going up significantly.
If you can’t keep up with the increased running costs of your car, or you think they might affect your vehicle’s saleability in the future, it’s worth looking into what you could get for your car today. Start with a free, instant valuation based on up-to-the-minute market data by entering your reg on the Motorway homepage or app.
They’ll then ask you a few easy questions about your car and guide you through the photos you need to take to complete your vehicle profile. It can be done right from your phone – in a matter of minutes.
If you choose to enter your car into an online daily sale, then in as little as 24 hours you will receive your best offer. If you choose to go ahead with the sale, your car will be collected for free by the dealer and the money will be quickly and securely transferred to your bank account.
