jamjarcars-Logo-Orange-Grey-7

Sign in

4 Ways you can Save on your Car Tax

4 Ways you can Save on your Car Tax

Since recent changes to Vehicle Excise Duty (VED), any car registered after April 2017 is required to pay a fixed annual rate after the first year. During the first year, the amount is based on the vehicle’s emissions, but after that the standard rates apply:

  • Petrol cars: £140
  • Hybrids/alternative fuel: £130

This marks a shift from the previous system, where tax was calculated solely on CO₂ emissions. Although the flat rate limits opportunities for reductions, there are still several ways to manage your costs more effectively.

For more guidance on running costs, upkeep, and vehicle responsibilities, visit our maintenance hub.

1. Get a Refund on Your Previous Vehicle’s Tax

If you no longer own your previous car or van — whether it has been sold or taken off the road — you can request a refund for any remaining full months of tax. This is done by notifying the DVLA that the vehicle is no longer in your possession or has been declared off-road. Any refund received can help offset the cost of taxing your next vehicle.

And if you want to make sure you’re not paying a penny more than necessary, our simple cancel car tax guide  explains when you can legally stop paying and how to do it properly.

2. Buy a Car Registered Before 2017

The updated tax rules only apply to vehicles registered after April 2017. Cars registered before this date still follow the older emissions‑based system. If you currently own a vehicle in a higher tax band, switching to a low‑emission model registered before 2017 could reduce your annual costs significantly, with some bands ranging from £0 to £115.

3. Buy an Electric Car

Electric vehicles remain exempt from standard car tax. With the market expanding and more manufacturers offering electric options, this can be an effective way to eliminate VED costs entirely. Recent policy updates mean EV owners should stay informed about future tax changes, but for now they remain one of the most cost‑efficient choices.

With major tax hikes hitting certain petrol and diesel drivers this year, our breakdown of the April car tax changes shows exactly where costs are rising and how to avoid being caught out.

4. Your Older Car May Have Increased in Value

If you own a vehicle registered before the newer tax rules came into effect, its value may have risen due to increased demand for lower‑tax models. If you’re considering changing cars, it’s worth checking what your current vehicle might be worth. 👉 Check your car’s value here