What is road tax?

Road tax - also known as Vehicle Excise Duty - is a tax paid on all petrol and diesel vehicles registered on the UK's public roads. The standard rate of road tax that you pay depends on a number of factors, including:

  • Carbon dioxide emissions - Lower tailpipe emissions often equal a comparatively cheap road tax (and vice versa). Any car that emits under 0g/km of CO2 is exempt from annual road tax. Anything above that is charged in bands.

The current road tax brackets for petrol and diesel cars that meet the RDE2 standard under £40,000 and registered after 2017 are as follows:

CO2 emissions (per km)

Road tax paid (£)

















To see the rest of the bands, you can visit the Gov.uk site here

  • Engine size - Larger engine sizes typically have higher road tax costs (especially diesel engines)
  • Price tag - Cars that cost more than £40,000 have to pay an additional £390 per year in road tax for the first 5 years

Cheapest road tax cars

With these factors in mind, let's look at some of the cheapest road tax cars so you can make a better choice for yourself and your budget.

Toyota Prius

The hybrid Toyota Prius is a low road tax car because of its low CO2 emissions of 72g/km. The Toyota Prius enjoys both a petrol engine and electric motor, the former of which is used for long journeys and high speeds, and the latter for short journeys and low speeds.

This combination of power sources make the Prius highly fuel-efficient and, in turn, very cheap to run. With an average fuel economy of over 60mpg, much higher than most traditional combustion cars.

Not sure what MPG you get from your current motor? Use our free tool to check your car's MPG.

BMW 330e

This plug-in hybrid from the classic German motor brand boasts the amazing combination of low road tax and luxury fixings. On a single charge, the 330e can travel up to 37 miles on electric power alone, great for short journeys. In total, it puts out around 32g/km of CO2 - meaning a measly £10 road tax charge.

On top of this, its high-quality interior, comfortable seats, quiet cabin, range of safety features and advanced tech makes the BMW 330e a fun, highly enjoyable car to drive. The second of the three alternative fuel cars on this list, it makes a great drive for those who don't want to sacrifice luxury for the sake of a low annual rate of tax.

Peugeot 108

This small vehicle is fast on its feet, and will cost you little in road tax thanks to its impressive emissions between 88g and 100g of CO2 per kilometre (depending on model).

Its small size also makes the Peugeot 108 well-suited for stop-go city driving and parking (not to mention the low ULEZ charges). It also makes for a compact and comfortable drive, with well-designed seats, and a user-friendly layout for controls and features.

red toyota prius parked next to a concrete wall
Front view of a blue Ford Fiesta ST driving down a road

Citroën C1

Another compact city car, the Citroën C1 is very light, aerodynamically styled, and equipped with a stop-start system that automatically shuts off the engine at stops.

All of these factors help the C1 to reduce drag and improve fuel efficiency, whereas its 97g/km of CO2 puts the C1 into the lower bands of road tax.

The C1 is an all-round affordable car, from its initial price tag to the low tax band. Its small size makes a responsive and agile drive, and the variety of colours that it comes in allows you to make it your own.

A great fuel economy and relatively low running costs make the C1 a car truly designed for the urban jungle and the budget-minded driver. 

Lexus CT200h

Another hybrid vehicle for this list, this time from Japanese manufacturer, Lexus. When fully charged, the CT200h can travel up to 25 miles on electric power, ideal for shorter journeys.

The CT200h boasts around 101g/km of CO2, the best-in-class figure in the small luxury car market.

Known for its luxury trappings, this Lexus model also boasts high speed stability, smooth and precise handling, and rewarding agility. 

Ford Fiesta

The classic Fiesta is one of the best-selling cars in both used and new markets, and thanks to its 1.0-litre petrol engine and 75g/km of CO2, it offers a super low yearly tax rate for users.

Like other models on this list, the Fiesta is also lightweight and extremely aerodynamic, allowing it to cut through the air and offer a great fuel economy to whomever is behind the wheel. 

Why should you buy a car with low road tax?

There are a handful of reasons why you should buy a car with low road tax.

The financial benefits are clear; not only will you pay less in tax, cars with low road tax are naturally more fuel-efficient, saving you on fuel costs over time.

Similarly, cars with low road tax tend to have higher resale value than cars with higher tax, because buyers are willing to pay more for a car that is cheaper to run.

On top of financial advantages, you also have the peace of mind that you will not be met with a staggering tax bill when it comes to that time of the year.

You can rest assured that your low road tax car is also a low CO2 car, meaning that your carbon footprint of the car's lifespan is comparatively low and less harsh on the environment. 

Sell your car today for your own low road tax car tomorrow 

If you're looking for a car that demands a little less road tax from you, then you can make a start by selling your current car easily and conveniently with Sell 2 Swansway.

Part of the nationwide Swansway Motor Group, we’ve made selling your car more convenient than ever. With quotes representative of current market trends, you’ll never get less than you deserve for your car.

And with a 7-day guaranteed car valuation, hassle-free collection, and instant payment to your bank account once we’ve got your car, it’s never been a better time to sell your car with Sell 2 Swansway. 



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