Car Tax VED Rise For Older Vehicles Registered Between 1985-2001

From April 2025, Vehicle Excise Duty (VED) will increase for older petrol and diesel cars registered between 1985 and 2001. These vehicles sit just below the 40‑year historic tax exemption threshold, meaning they will continue to incur annual road tax based on engine size. While the increases are modest, they form part of wider updates to the UK’s vehicle tax system.

How Much Will Owners Pay?

The VED rise affects two engine‑size categories:

• Cars over 1549cc will pay £360, up from £345.
• Cars 1549cc and below will pay £220, up from £210.

These changes reflect standard annual uprating linked to inflation. They also align with broader updates coming in 2025, including the introduction of VED for electric vehicles.

Why These Vehicles Are Affected

Cars registered before March 2001 are taxed using engine size rather than emissions. As part of ongoing tax reforms, the government is adjusting VED across all vehicle types to ensure consistency and maintain revenue as the market shifts toward lower‑emission models. Vehicles over 40 years old remain exempt, but those just below the threshold will continue to see incremental increases.

How This Compares to Newer Vehicles

While older cars face moderate rises, the largest increases apply to new high‑emission petrol and diesel vehicles. First‑year rates for the highest‑polluting models have risen significantly in recent years, reflecting the government’s long‑term push toward cleaner transport. Electric vehicles will also begin paying VED from April 2025, ending their tax‑free status.

If you’re considering how tax changes affect long‑term value, our guide to car depreciation explains how age, emissions, running costs, and market trends influence resale prices.

What Owners Can Do

Drivers affected by the VED rise may want to explore a few options:

• Check for historic exemption eligibility — Vehicles over 40 years old can apply for VED exemption once they qualify.
• Review running costs — Rising tax, fuel, and maintenance costs may influence whether it’s worth keeping an older vehicle.
• Consider selling — Some owners may choose to move to a newer or more efficient model with lower running costs.

Final Thoughts

The VED rise for vehicles registered between 1985 and 2001 is part of a wider update to the UK’s vehicle tax system. While the increases are relatively small, they add to the ongoing costs of owning older petrol and diesel cars. Staying informed about tax changes can help drivers decide whether to keep, upgrade, or sell their vehicle.

If you’re thinking about selling an older car affected by the VED rise, you can get an instant valuation through our sell my car page.

For more guidance on preparing, valuing, and selling your vehicle, visit our car selling guidance hub.