Top cars with cheap road tax

Written by

Stephanie Reid

Stephanie Reid is a financial services expert with over eight years of experience writing money-saving articles at Novuna Personal Finance. She has written hundreds of articles on a variety of topics including interior design, home improvements and weddings - with a keen eye for spotting money-saving opportunities and passing these tips onto readers. As a mum of two, Stephanie knows how important budgeting effectively is for parents and often incorporates family budgeting tips into her guides.

Thursday 28th April 2022

If you want to save money on road tax, the most obvious choice is to purchase a zero-emission vehicle (ZEV), which is tax-free.

One of the main downsides of electric cars for people on a limited budget is that they are more expensive to buy than petrol or diesel vehicles. Drivers of an EV will save money on their road tax and running costs in the long term, but this solution isn't for everyone.

On the other hand, choosing an ultra-efficient petrol or diesel car could save money on road tax because most models are both inexpensive to buy and economical to run, making them a smart alternative for saving money.

In this article, we've selected our top recommendations for low-road-tax cars.

How much is car tax going up in 2022?

Road tax, often known as VED (Vehicle Excise Duty), has been risen by 6% as of April 1, 2022.

The cost hike is due to VED being brought in line with the RPI inflation measure, and the new price for drivers will be based on several factors, including the car's age, CO2 emissions, and list price, as well as whether it's in its first year on the road.

All vehicles are categorised into one of 13 tax bands based on their CO2 emissions, which can range from zero-emissions vehicles to those emitting more than 225g/km.

Vehicle Excise Duty

Bands and rates for cars first registered on or after 1 April 2017

CO2 emissions (g/km)

Standard rate £

First year rate £




1 - 50



51 - 75



76 - 90



91 - 100



101 – 110



111 – 130



131 – 150



151 – 170



171 – 190



191 – 225



226 – 255



Over 255



*Alternative fuelled vehicles, including hybrids, bioethanol and liquid petroleum gas pay £155 per annum. Source

Our top five

BMW 330e

Cost to tax (first 12 months from new) £0

You can have your cake and eat it too with the BMW 3 Series 330e plug-in hybrid model. You get a beautiful saloon that's enjoyable to drive as well as a low road tax. This is because the 'e' in the name denotes that the 3 Series features a plug-in hybrid engine that integrates battery power and an electric motor to boost fuel economy and power. As a result, you don't have to pay any taxes on your car.

The economy for previous-generation (tax-free) cars is 134.5mpg, which, while impressive, will be difficult to achieve in practise. To come close, charge the 330e as often as possible, because the more you utilise the batteries to power you down the road, the less fuel the engine will use.

Lexus IS 300h

Cost to tax (first 12 months from new) £10

Low-emission sports cars are something we rarely hear about however, there are a few possibilities for those looking for a low-tax vehicle with a thrilling driving experience.

The Lexus IS 300h F-Sport is the most notable. It combines a 2.5-liter petrol engine and an electric motor to generate 223hp and can accelerate from 0 to 62 mph in 8.4 seconds.

It also fits the profile, with its strong and clean lines, and it's encouraging to know that Lexus frequently scores high on the most reliable car lists, so it should be a comfort to drive.

Volkswagen Up - Volkswagen Up 1.0

Cost to tax (first 12 months from new) £20

The Volkswagen Up is one of the most sophisticated city cars on the market, combining the low costs and easy-to-drive advantages of most city cars while also giving the impression of being a much bigger vehicle.

The cabin of the Up is surprisingly spacious, and it can seat four adults without being too close for comfort.   It's quick, exciting to drive, and easy to find a parking spot in crowded city centres.

VW Up models registered before April 1, 2017, will only cost you £20 in tax for the entire year.

Mercedes C220d

Cost to tax (first 12 months from new) £20

The Mercedes C-Class saloon is a well-known, luxurious, and technologically advanced vehicle. The 220d model strikes the best blend of speed and operational costs. The Sport model level includes satellite navigation, a reversing camera, and heated leather seats.

Something to keep in mind is the possibility of future diesel car surcharges. Most diesels registered pre-September 2015 already face a daily charge to enter central London, and an increasing number of cities are considering imposing emission taxing. As a result, if this troubles you and you're considering a diesel vehicle, search for one that meets 'Euro 6' emissions standards to protect yourself from potential charges.

Ford Fiesta 1.0 EcoBoost

Cost to tax (first 12 months from new) £30

The Ford Fiesta has been the best-selling car in the United Kingdom for countless years. Ford's 1.0-litre EcoBoost petrol engines are economical and robust enough for most circumstances, and it's one of the best value cars with an automatic transmission.

It generates the same amount of power as a standard 1.4-litre or 1.6-litre engine, but with lower running costs and emissions.

It's a fantastic choice of engine when opting for a Fiesta, even if modern models are marginally more expensive than older and less efficient 1.25-litre models.

Ready to upgrade and lower your road tax with a new car?

Our car loans can help you cover the cost and get you in the driving seat of your new car much faster.

Our flexible financing options allow you to pay in monthly instalments over the course of up to five years, giving you more time to hit the road and enjoy the drive.

Borrow between £1,000 and £35,000 with competitive rates from as low as 7.4% APR Representative (£7,500-£25,000).

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