Drivers of vehicles that are over 20 years old are facing substantial yearly car tax bills, potentially reaching up to £600, as per industry experts. Currently, all petrol, diesel, and electric car owners are subject to Vehicle Excise Duty (VED) charges for using the road network in the UK.
In contrast, newer models manufactured post-2017 are subject to a standard VED rate of £195 annually. However, older cars from 2001 to 2017 are placed in a tiered system of car tax brackets based on their emissions levels, leading to varying fees depending on the pollution output of each model.
Experts at Cars2Buy have highlighted that vehicles registered between 2001 and 2017 will continue to be taxed based on their CO2 emissions, with charges ranging from £20 to £600 yearly, depending on the environmental impact of the specific vehicle.
Cars from the 2001 to 2017 period, identified by number plates with ’01’ or ’51’ for older models and ’17’ or ’67’ for newer ones, may face these higher charges. Despite the current maximum of £600, RAC specialists caution that motorists might end up paying more due to recent increases. VED costs typically rise annually in line with Retail Price Index (RPI) inflation, with the latest adjustment taking effect in April 2025.
For instance, vehicles falling under Band L, emitting between 226 and 255g/km of CO2, incur an annual VED charge of £735. Meanwhile, vehicles in the highest Band M category, emitting over 255g/km, face yearly fees of £760 to use the roads in the UK.
Moreover, if drivers opt for monthly payments instead of a one-time annual fee, costs can escalate further. The RAC has outlined that VED rates for cars registered post-March 2001 and pre-April 2017 are divided into 13 bands based on CO2 emissions, with lower emissions levels qualifying for lower tax bands. Since the changes in VED rules in 2025, cars emitting below 100g/km of CO2 are no longer exempt from road tax and must pay £20 annually. The tax rates for petrol and diesel cars registered within the specified period are generally similar.
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