Car tax: How much it will cost you to drive your new car

Formally known as Vehicle Excise Duty (VED) or Graduated VED, car tax is required by law for all vehicles registered and used on a public road in the UK. If a car is kept off-road, it will be taxed unless a Statutory Off Road Notification (SORN) is applied. It is important that you understand how much it will cost you to use or keep a car on a public road if you are a new motorist or looking to buy a car.

The cost of motoring

The amount of car tax motorists pay in the UK depends on the car’s date of first registration, CO2 emissions and its engine size. For vehicles first registered before 1 March 2001, car tax is based only on the size of the car’s engine because official CO2 emissions data is not available. In this case, the cost of car tax is as follows:

  • £135 per year for an engine size of 1549cc or smaller, as per the 2012/13 rate
  • £220 per year for an engine bigger than 1549cc, as per the 2012/13 rate

For vehicles registered on or after 1 April 2010, a series of new car tax rates based on fuel type and CO2 emission levels applies for some cars. The new series of car tax, also referred to by some people as 'showroom tax', is only payable for the first licence taken out on a brand new car. The tax rates charged for this new tax are listed on a comprehensive table found on Direct.gov.uk website at Direct.gov.uk/en/Motoring/OwningAVehicle/HowToTaxYourVehicle/DG_10012524.

Checking your car’s CO2 emissions

The official vehicle CO2 emissions levels is measured before the vehicle goes on sale when the model is being tested for 'type approval'. This official CO2 emissions level is the only figure used to determine the road tax levied on the vehicle. Find your car’s CO2 emissions level on the V5C vehicle registration document.


If you are considering buying a new car, it is important for car tax purposes that you pay particular attention to vehicle specifications before you buy. Check with the dealer about CO2 emissions levels of cars you are considering buying and also refer to the V5C documentations. Vehicle emission levels change with trim levels, transmission and model year. Generally, greener cars will not only protect the environment from degradation, but can also protect you from higher car tax rates.

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