Finding a car with low vehicle tax rates can save hundreds of pounds each year, making it a smart choice for budget-conscious drivers. Cars that combine excellent fuel economy with low CO2 emissions usually qualify for the lowest tax, sometimes as little as £35 annually. However, the overall calculation will also depend on factors like the vehicle registration year and engine size.
Below, we will explore some of our favourite low tax models, as well as everything you need to know about paying UK road tax.
Comprehensive list of cars with £35 road tax
We’ve compiled a handy list, focusing on car models with the minimum road tax of £35. However, it’s important to note that these rates only apply to vehicles registered before 1 April 2017. It may also vary for different versions of each model.
If you’re considering a used car, this guide will help you identify affordable models within your budget. These pre-2017 vehicles benefit from lower CO₂-based tax bands, making them ideal for drivers looking to minimise running costs without sacrificing reliability or performance.
Popular models with minimal tax
- Toyota Prius – Iconic hybrid with excellent fuel economy and very low CO₂ emissions.
- Hyundai i10 – Compact city car, efficient, affordable, and easy to park.
- BMW 2 Series – Sporty coupe or convertible with premium feel.
- Mercedes GLA – Stylish compact SUV combining high performance with low emissions.
- Mazda 6 Tourer – Practical estate with smooth handling and efficient motor variants.
- MINI Hatchback – Fun-to-drive small car with distinctive design and low energy demands.
- Nissan Qashqai – Popular crossover with reliable performance and good fuel economy.
- Ford Fiesta – Small, nimble hatchback loved by families.
- Volkswagen Golf – Practical hatchback offering a mix of comfort, innovation, and reliability.
- Mazda 3 Stylish – Compact car, economical, and engaging.
- Renault Kadjar – Affordable compact SUV with low emissions for class.
- Kia Sportage – Reliable SUV with low running costs and modern features.
- Peugeot 3008 – Sleek SUV popular for comfort and affordability.
Understanding road tax in the UK: what you need to know
When buying a car in the UK, it’s important to factor in Vehicle Excise Duty (VED), commonly known as road tax. The amount you pay depends on when the car was first registered, its CO₂ emissions, and sometimes its list price.
Cars registered between 1 March 2001 and 31 March 2017 are taxed according to 13 CO₂-based bands (A–M). Lower-emission vehicles sit in the cheaper tax bands, while high-emission models, such as old diesel models, cost more.
For cars registered on or after 1 April 2017, the rules changed. You’ll pay a first-year “showroom” rate based on CO₂ emissions, followed by a standard annual rate (currently about £195). Cars with a list price over £40,000 incur an additional premium charge of about £425 a year for five years.
From April 2025, electric vehicles/zero-emission cars will also join this car tax system. New EVs will pay a £10 first-year rate, then the standard £195 vehicle tax rate each year after. The premium charge still applies to EVs over £40,000.
Driving without valid car tax is illegal and can result in fines or your vehicle being clamped. Before buying, always check the car’s registration date, emissions, and list price as these determine how high the VED is.
How to pay vehicle tax in the UK
You usually pay car tax in the UK (Vehicle Excise Duty) via the GOV.UK vehicle tax service using a debit/credit card or by Direct Debit.
Alternatively, you can pay it at a post office counter. Just make sure to bring your V5C document (logbook) or V5C/2 new-keeper slip, your V11 reminder, and a valid MOT if required.
You can also call 0300 123 4321 to pay by phone (but you can’t set up Direct Debit this way). If your vehicle is exempt, you still technically need to tax it (you’ll simply pay £0).
How often do you have to pay it?
Most people pay one lump sum once per year, however, if you set up your Direct Debit, there are a few payment options:
- Annual payments
- Payment every 6 months
- Monthly instalments
The DVLA will cancel your tax Direct Debit if you let them know that your vehicle has been sold, SORNed, scrapped, written off, stolen, exported, or qualifies for an exemption certificate (e.g., for classic vehicles or those for disabled use).
Benefits of owning cars with low road tax
Owning a vehicle in a lower tax bracket offers financial savings, environmental perks, and compliance with strict regulations:
- Reduced running costs: not just due to lower vehicle tax but also due to greater fuel efficiency. Most cars with lower tax use advanced technologies or alternative fuel (i.e. electric power), making them cheaper to run in the long term.
- Lower depreciation and stronger appeal in the secondhand market: vehicles that are cheap to run and tax remain desirable, which helps retain value when buying or selling.
- Environmental and regulatory compliance benefits: for example, zero emission vehicles or hybrid cars may avoid penalties in low emission zones or future stricter regulations due to their contribution to cleaner air.
To get the most out of your low tax car, make sure to service it regularly. You can easily find replacement parts and fluids, such as oil filters and transmission fluid, by adding your car to the garage section of your AUTODOC account.
Frequently Asked Questions (FAQ)
Can I transfer road tax to a new owner?
No, road tax is non-transferable. When selling a car, the seller usually cancels the tax and the buyer must register and pay separately.
Are low road tax cars more expensive to insure?
Not necessarily. Insurance depends on factors like driver age, car value, and engine size, rather than just the road tax band.
Does low road tax affect MOT requirements?
A: No, all vehicles must pass an MOT when due, regardless of their road tax rate or CO₂ emissions.
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