Cheapest cars to tax 2022
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Nobody likes paying road tax. It’s an annual bill that can run into the hundreds of pounds, and generally always comes just at the wrong time.
Many motorists therefore prioritise the cheapest cars to tax when searching for a new vehicle. But how can you home in on cost-effective cars to tax when finding a used car?
There are a few rules of thumb to follow. A key date is April 2017: cars registered before then benefitted from tapered tax rates that incentivised low-CO2 vehicles.
Some used petrol and diesel cars have free road tax, called tax band A. Others have cheap road tax costing £20 a year (band B) or £30 (band C).
Electric cars have always had free road tax, so choosing an EV is a good way to automatically save money here.
In this guide, we select 10 of the cheapest cars to tax. Our list includes a broad array of models, powered by diesel, petrol or batteries.
Cheapest cars to tax
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Volkswagen Up
The Volkswagen Up is a popular money-saving motor, and a great one at that. The three- or five-door city car benefits from trademark VW build quality, so it feels solid, plus it's good to drive and quite refined for such a cheap car. It’s reliable and robust, and becoming increasingly good value as a used car. The 1.0-litre petrol engine is also extremely fuel-efficient, which means CO2 emissions are low. Some pre-April 2017 models fall into road tax band A, so owners don’t have to pay anything. Others are band B, and will cost £20 a year. Even the sporty Up GTI is one of the cheapest cars to tax, despite its enthusiastic performance.
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Citroen C1
The Citroen C1 is a popular, very affordable city car that was sold across two generations. All models feature an economical 1.0-litre petrol engine, and are among the cheapest cars to tax. Most C1s fall into road tax band A, so tax is free. A few other variants are tax band B, costing £20 a year. The C1 is really fun to drive, with nimble handling and a lively engine. It’s also a great choice for new drivers, with excellent visibility and light controls. Being so short, it’s simple to park in town, while the small boot is easily expanded by folding down the rear seats.
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Ford Fiesta
The venerable Ford Fiesta is Britain’s most popular new and used car. Thanks to Ford’s ingenious 1.0-litre Ecoboost turbo petrol engine, there are numerous versions that either enjoy free road tax, or are among the cheapest cars to tax. Ford offered the punchy Ecoboost motor in several different power outputs, but none should cost more than £30 a year to tax. Diesel versions of the Fiesta also emitted low levels of CO2, with low tax bills to suit. The Ford’s popularity means there are huge numbers on the used market, so it’s easy to find the perfect spec for you.
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Nissan Leaf
The Nissan Leaf was the world’s first mainstream electric car. It was launched more than a decade ago, meaning it’s now one of the most well-represented EVs on the secondhand car market. As the Leaf is electric, every version on sale has free road tax, and the savings don’t stop there. Charging with electricity is generally cheaper than filling up with petrol or diesel, and it’s something many people can do from home, rather than having to visit a filling station. The distinctive-looking Leaf is a proper five-door family-sized hatchback, so practicality isn’t compromised – and it should be reliable, too.
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Toyota Yaris Hybrid
The Yaris Hybrid is a very clever car indeed. It uses a downsized version of the 'self-charging’ hybrid engine from the famous Toyota Prius, which allows it to operate as a pure electric car at slower speeds. This means CO2 emissions are extremely low, so it easily falls into the lowest band A tax rating, meaning free annual road tax. The Yaris is super-reliable too, and the standard automatic transmission makes it easy to drive. It does cost more than regular, non-hybrid Yaris to buy, but if your budget doesn’t quite stretch to it, the fact other versions are still among the cheapest cars to tax is reassuring.
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Renault Clio
The previous Renault Clio was a strong-selling five-door supermini with a number of ultra-efficient engine options. The 1.5-litre dCi diesel versions are cheap to tax, but so too is the TCe 90 Eco turbocharged three-cylinder petrol. This has the added advantage of punchy performance, plus a super-smooth and refined nature. The Clio is a spacious and well-equipped car, and its bold styling is ageing really well. Even the earliest models from this generation still look smart and modern. The Renault also scored well in Euro NCAP crash tests, making it one of the safest small cars of this era.
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Fiat 500
The Fiat 500 is a first car favourite, a super-popular retro recreation that has really won the hearts of British buyers. The three-door hatchback has cute and timeless styling inspired by the original ‘Cinquecento’ of 1957, plus a funky interior. It’s also a feel-good car to drive. The most efficient 1.2-litre petrol engines offer free road tax, while others that fall into band B and C are still among the cheapest cars to tax. The Fiat 500 has been on sale since 2008, so there are thousands on the used car market to choose from, with something for every budget.
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SEAT Ibiza
The SEAT Ibiza is a stylish three- and five-door supermini that’s related to the well-respected Volkswagen Polo. Prices were lower than its German alternative when new, and this carries through to better value for money when buying used. SEAT offered a wide range of engines, but the cheapest Ibizas to tax are the 1.0-litre Eco TSI petrol versions. These have sub-100g/km CO2 emissions for free road tax, while even the non-Eco models fall into the lowest tax bands for some of the cheapest annual bills. The solidly-built Ibiza is also well equipped and easy to drive.
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Skoda Citigo
The Skoda Citigo is the cheaper Czech version of the Volkswagen Up. It too was a popular car when new, which means there are a good number of models on the secondhand market. Many of them fall into tax band A, with a few other higher-spec versions in band B. This means the Citigo will be cheap to tax and economical to run. As a bonus, it’s also nippy and enjoyable to drive. Look out for Monte Carlo models, which have a bit of a sporty makeover – but without the higher running costs that are usually associated with a performance model.
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Smart ForFour
The Smart Forfour is an interesting take on the famous two-seat Smart Fortwo. It’s longer than the original city car, but still ultra-short, and as its name suggests, it can seat four people rather than just two. It has a similarly compact turning circle, so is really manoeuvrable, and the tiny turbocharged petrol engine is very economical. Every Smart Forfour came with free road tax, as low exhaust emissions mean they all fall into band A. You can therefore shop with confidence, knowing you’ll be getting one of the cheapest cars to tax – and doing your bit for the planet.
Why should I look for cars registered before April 2017?
Cars registered between 1 March 2001 and 31 March 2017 were taxed based on fuel type and exhaust CO2 emissions. A sliding scale of tax bands from A to M dictated the costs for CO2 emission categories, with different fees for petrol, diesel and alternative fuel (hybrid) cars. Motorists can pay for either six or 12 months upfront – the latter is cheaper – or a direct debit payment can be set up.
What happened to road tax after April 2017?
From April 2017, flat-rate car tax was introduced. No matter what the exhaust CO2 emissions of a vehicle, a standard rate is applied to diesel, petrol and alternative fuel cars. However, this only applies from the second year onwards; confusingly, the first-year road tax payment is still based on CO2 emissions, with drivers of the highest-emitting cars having to pay a breathtaking £2,245 for a single year’s road tax.
Do electric cars have free road tax?
New electric cars are the only vehicles you can buy today that get free road tax. Previously, there were some electric cars that were liable for an expensive ‘first-year’ rate, but the government rectified this in 2020 and it won’t affect used car buyers now. Electric cars have always had free road tax, so if you want a guaranteed way to find one of the cheapest cars to tax, it’s easiest to go electric.
