How to tax a used car you have just bought
To tax a used car you have just bought, get the green V5C/2 new keeper slip from the seller, then tax it in your own name before you drive it, online, by phone or at a Post Office, or declare it SORN if it will stay off the road. The tax the seller paid does not come with the car.
Vehicle tax does not transfer with a used car: it is cancelled the moment the seller tells DVLA the car has been sold, the remaining tax is refunded to the seller, and the car you have just bought is untaxed from that moment — so you must tax it in your own name before you drive it away, or declare it SORN and keep it off the public road.
Just want the short answer? Do I need to tax a car I have just bought? is the one-minute version.
Why it catches people: there is no tax disc on the windscreen any more, so nothing visibly changes when the tax is cancelled. The car looks exactly as it did when the advert said it was taxed. A seller who tells you how many months are left on it is describing their own position, not yours.
What happens to the tax at the moment of sale
Tax is held against the vehicle record, in the name of the registered keeper. When a car changes hands, the sequence is fixed and there is no version of it in which the buyer inherits the tax.
- The seller tells DVLA the car has been sold, using the V5C. This is their legal responsibility as the outgoing keeper.
- DVLA cancels the vehicle tax.
- The remaining tax is refunded to the seller.
- The car is now untaxed. Not reduced, not pending, not carried over. Untaxed, from that point on.
- You tax it in your own name before you drive it, or you make a SORN declaration and keep it off the public road.
Because tax is enforced from the electronic record rather than from a disc in the window, an untaxed car on a public road is detectable without anyone stopping it. That is why this particular rule bites at the exact moment people are least likely to be thinking about paperwork: keys in hand, on the forecourt or the seller’s driveway.
What the buyer has to do before driving away
- Get the green new keeper slip. The seller tears it off the V5C and hands it to you. The reference number on it lets you tax the car in your own name straight away, before a V5C is issued to you.
- Tax it, or declare SORN. There is no grace period built into the handover. If the car is not going on the road yet, SORN is the legitimate alternative and it means the car has to stay off the public road entirely.
- Have insurance in place in your name before the car moves.
- Know the MOT position. The first test falls due on the third anniversary of registration in Great Britain, and at four years old in Northern Ireland, where testing is run by DVA rather than DVSA.
- Do not pay a premium for “remaining tax”. It has no value to you. It is refunded to the seller either way.
Why the registration date decides everything
Once you are the one paying, the amount is set by when the car was first registered, not by how clean or how expensive it is now. Three systems run side by side in the UK, and a car moves between them only by being a different car.
The average licensed car in the UK is 10 years old (DfT, end of 2025), so the 1 April 2017 boundary runs straight through the middle of what is for sale, and the two sides of it are taxed on completely different logic.
Before 1 March 2001
Taxed on engine size alone. CO2 is not used at all. £230 a year up to 1549cc, £375 a year above it.
1 March 2001 to 31 March 2017
A graduated CO2 band, paid at the same rate every year for the life of the car. £20 to £790 a year. No first-year charge and no Expensive Car Supplement.
On or after 1 April 2017
A one-off CO2-based first-year rate, then a flat £200 standard rate every year after. As a used buyer you pay the standard rate; the first-year rate was settled by the original buyer.
Both changeovers happen mid-year, so a registration year on its own is not enough to place a car. A 120 g/km car registered in March 2017 sits in the band system; the same car registered that April pays the flat standard rate. Check the date of first registration on the V5C, not the model year in the advert.
Annual bands for cars registered 2001 to 2017
Paid every year, unchanged for the life of the car. 2026/27 rates.
| Band | CO2 (g/km) | Per year |
|---|---|---|
| A | 0–100 | £20 |
| B | 101–110 | £20 |
| C | 111–120 | £35 |
| D | 121–130 | £170 |
| E | 131–140 | £200 |
| F | 141–150 | £225 |
| G | 151–165 | £275 |
| H | 166–175 | £325 |
| I | 176–185 | £360 |
| J | 186–200 | £410 |
| K | 201–225 | £445 |
| L | 226–255 | £760 |
| M | Over 255 | £790 |
Band A used to be zero. That exemption has been removed, so the cleanest cars of this era now pay £20 a year. Nothing in this system is free to tax any more, and an electric car registered under it sits in Band A like anything else emitting nothing at the tailpipe.
First-year rates for cars registered from April 2017
Charged once, on first registration, so a used buyer never pays this. It is here because it explains why the standard rate is flat: the emissions charge was taken up front. Diesels that do not meet the RDE2 standard pay one band higher. 2026/27 rates.
| CO2 (g/km) | Petrol / RDE2 diesel | Other diesel | Alternative fuel |
|---|---|---|---|
| 0 | £10 | £10 | £10 |
| 1–50 | £115 | £135 | £115 |
| 51–75 | £135 | £280 | £135 |
| 76–90 | £280 | £365 | £280 |
| 91–100 | £365 | £405 | £365 |
| 101–110 | £405 | £455 | £405 |
| 111–130 | £455 | £560 | £455 |
| 131–150 | £560 | £1,410 | £560 |
| 151–170 | £1,410 | £2,270 | £1,410 |
| 171–190 | £2,270 | £3,420 | £2,270 |
| 191–225 | £3,420 | £4,850 | £3,420 |
| 226–255 | £4,850 | £5,690 | £4,850 |
| Over 255 | £5,690 | £5,690 | £5,690 |
To put a specific car through all three systems, including the changeover months and the supplement, use the car tax calculator. For what a particular registration is taxed at right now, and whether it is currently taxed, the DVLA vehicle enquiry service on GOV.UK answers from the plate alone.
The Expensive Car Supplement, and why a listing cannot tell you
The Expensive Car Supplement is £440 a year on top of the standard rate, charged in years 2 to 6 of the car’s life, which is £2,200 in total across that window. It applies to cars registered on or after 1 April 2017.
It is assessed on the list price when the car was new. Not the price you pay, not the trade value, not what the dealer has it up for. A car advertised well below the threshold can still be inside the supplement window, because depreciation has moved the asking price and not the figure the charge is assessed on.
- Threshold for petrol, diesel and alternative-fuel cars: list price over £40,000 when new.
- Threshold for zero-emission cars first registered on or after 1 April 2025: over £50,000, with that threshold taking effect on 1 April 2026.
- An electric car first registered between 1 April 2017 and 31 March 2025 pays the £200 standard rate and no supplement at any list price. That is a large and often-missed part of the used electric market.
- The supplement runs for 5 years and then stops, so an older car may have been through it already.
The original list price is not on the V5C, which records the date of first registration and the CO2 figure. Ask the seller, or a main dealer for the make, what the car listed at when new including factory options — GOV.UK's own advice is to check the list price with a dealer. Working it out from the asking price is guesswork, and the gap between right and wrong here is £440 a year for as long as the window lasts.
Electric cars lost the exemption on 1 April 2025
Electric cars were exempt from vehicle tax until 1 April 2025. They are not any more. An electric car now pays the same £200 standard rate as a petrol or diesel car of the same era, and a zero-emission car first registered on or after 1 April 2026 pays £10 in its first year before joining the standard rate.
Adverts and older guidance still describe electric cars as tax-free; that stopped being true on 1 April 2025.
Historic vehicles: two different exemptions, often confused
Older vehicles can be exempt from vehicle tax and can be exempt from MOT testing. These are separate rules, with different tests, different dates and different paperwork. A vehicle can qualify for one and not the other.
Tax exemption (historic tax class)
- Built before 1 January 1986, exempt from 1 April 2026.
- Rolling: a vehicle constructed more than 40 years before 1 January of a year is exempt for the twelve months from 1 April of that year, so the cut-off moves forward by a year, every 1 April.
- If the build date is not known but the vehicle was first registered before 8 January 1986, it still qualifies. That is a fallback for an unknown build date, not a second route in.
- Must be applied for. It is not granted automatically because the vehicle is old enough.
- The vehicle still has to be taxed every year, at a rate of zero. Being exempt does not mean being untaxed, and an unapplied-for exemption is just an untaxed car.
- Not available at all if the vehicle is used for hire or reward — a taxi carrying paying customers, or a classic hired out for weddings — or commercially for a trade or business.
- Vehicle tax is a UK-wide matter, so this applies in Northern Ireland as well as Great Britain.
MOT exemption (a different rule)
- Built or first registered more than 40 years ago and no substantial changes in the last 30 years. Both parts have to be true.
- No application and no decision to wait for. The owner declares it on form V112 — V112G for large vehicles — when the vehicle is taxed.
- Need an MOT by default: substantially changed vehicles, large vehicles used commercially, Q-plated vehicles, kit cars, kit conversions and DVLA-defined reconstructed classics. That is not absolute — one of those taxed in the historic vehicle class and unmodified for 30 years is exempt after all.
- It applies in Northern Ireland too. Testing there is run by DVA, but since 12 October 2020 a vehicle manufactured or first registered at least 40 years ago and not substantially changed has been out of the annual DVA test on the same terms, declared on the same form V112 (Motor Vehicle Testing (Amendment) Regulations (Northern Ireland) 2020).
If you are buying something old enough for either to be in play, ask which of the two the seller means. “It is exempt” is ambiguous, and the tax half of it depends on an application that may never have been made.
Vehicle tax is UK-wide, testing is not
Vehicle tax is administered by DVLA across the whole UK, so everything above applies in Northern Ireland exactly as it does in Great Britain.
Roadworthiness testing does not work that way. In Great Britain the MOT is run by DVSA, the first test falls due on the third anniversary of registration, and the class 4 (car) fee is capped at a statutory maximum of £54.85. In Northern Ireland testing is run by DVA at its own test centres, the first test is at four years old, and the fees it charges are £38.00 for a full test and £29.50 for a retest — set prices rather than a cap, so nothing there undercuts them. The MOT checker for Northern Ireland has the official booking and status links.
Before you hand over the money
- Ask for the date of first registration from the V5C. It decides which of the three systems applies, and therefore the annual cost.
- Ask what the car listed at when new if it is a 2017-or-later car that could have been over £40,000 when new — or over £50,000 if it is a zero-emission car first registered on or after 1 April 2025. The advert cannot answer this.
- Check the fuel and the registration dates together for electric cars. The 1 April 2025 line changes the answer, and so does the 1 April 2017 one.
- Take the green new keeper slip with you. Without it you cannot tax the car on the spot.
- Tax it before you drive it. Not later that day, not when the V5C arrives.
Where these figures come from
- Vehicle tax rates: GOV.UK vehicle tax rate tables, 2026/27, verified 2026-07-28. gov.uk/vehicle-tax-rate-tables.
- How to tax a vehicle, and what you need: GOV.UK, Tax your vehicle, read 6 October 2026 (online, by phone or at a Post Office, using the reference on the green ‘new keeper’ slip; a valid MOT when the tax starts; SORN if it is off the road). gov.uk/vehicle-tax.
- Average age of a licensed car: Department for Transport vehicle licensing statistics, end of 2025.
- MOT fees and first-test ages: DVSA for Great Britain, DVA for Northern Ireland. The Great Britain class 4 figure is a statutory maximum, so a garage may charge less than it, and GOV.UK states no VAT is charged on it. The DVA figures are the set fees charged at its own test centres.
This page explains how the rules work. It is not advice on a specific vehicle: for what a particular car is taxed at, check the V5C and the DVLA vehicle enquiry service.