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The best tax-free cars

A guide to tax-free cars

Some electric cars are currently exempt from taxes. Here’s what you need to know

By Mark Hooson

Published: 03 October 2019

Electric car charging

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Which cars are exempt from tax?

Since 2017, the only new cars that are exempt from road taxes are zero-emissions models – cars powered entirely by electricity – worth under £40,000. All other vehicles have to pay a rate of at least £140 a year – and for more polluting vehicles, especially diesel cars, this can go significantly higher.

What are the benefits of electric cars?

As well as being exempt from vehicle taxes, there are other financial benefits if you drive an electric car.

Tax-free cars are extremely affordable to run. A full tank of fuel for a petrol car costs anywhere from £60 to £100 depending on the size of your tank – but a smaller electric car can be fully recharged with as little as £3.60 worth of electricity. They also cost less to maintain as they have far fewer moving parts.

How electric cars can save you money

According to the Department for Transport

There are government incentives to encourage the use of electric cars. The government currently offers a plug-in car grant of £3,500 towards every purchase of a fully electric car – although plans to scrap the programme have been announced, so it’s a good idea to take advantage of this grant while it still exists.

Fully electric cars are also currently exempt from the London Congestion Charge, which could save you £11.50 a day if you drive in the Congestion Charge zone – although this exemption will also be scrapped by 2025.

Tax-free electric cars do not have to pay the daily £12.50 charge for London’s Ultra Low Emissions Zone, which stretches between the North and South Circular roads. Similar low-emissions zones are likely to start appearing in other British cities in the future.

Driving an electric car can also save money on insurance. Many insurers offer a healthy discount on insurance for an electric car.

Which are the best tax-free cars?

To help you pick the right electric car, we’ve taken a look at four high-profile tax-free models.

Renault Zoe

The Zoe is among the cheapest electric cars available, at £17,720 (including the government’s plug-in car grant). It’s also among the most popular – the Zoe has been the highest-selling electric car in Europe for three of the past four years.

Despite its small size, the Zoe has a range comparable to many larger electric cars, at around 170 miles. It charges in five hours using a home wallbox. However, the battery is leased separately, which will cost an extra £70 per month.

Kia e-Niro

The Kia e-Niro is an ideal electric car if you need to drive long distances, with an impressive listed range of 282 miles. (In real-world driving conditions the figure is a little lower – tests have given it an effective range of around 250 miles.) At £32,995 (after applying the government’s £3,500 plug-in car grant) it’s more expensive than many of its competitors – but it’s also the only electric vehicle to have won What Car’s car of the year award.

VW e-Golf

The e-Golf is a fully electric version of Volkswagen’s classic Golf. Unlike many other electric cars, it was never designed from the ground up as an electric car, but is designed to feel and handle much like a traditional VW Golf.

Its effective range of 125 miles should be sufficient if you live in a city and use your car for a daily commute. The e-Golf retails from £31,075, but you can currently claim back £3,500 through the government’s plug-in car grant.

Nissan Leaf

The £27,995 Nissan Leaf is well proven, with more than 250,000 cars sold. Sold since 2011, it’s the first electric car to fully emulate the look and engine power of a traditional fuel-powered car. Now in its second generation, the Leaf has a range of around 170 miles and is fully charged in about six hours, with a full charge costing about £5 in electricity.

The most popular electric cars in 2018

According to the Department for Transport

Compare tax-free car insurance

MoneySuperMarket can provide you with a range of car insurance quotes for your tax-free electric car.

All you have to do is provide us with a few details on you, your driving history and your current circumstances, and we will find you a host of deals from our partners.

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