Road Tax on Electric Cars

How Is Road Tax Calculated?

Road Tax depends on what fuel your vehicle uses and its CO2 Emissions. Petrol and Diesel cars (that meet certain standards known as RDE2) have different tax rates compared to cars that use alternative fuels (electric, hybrids, bioethanol or liquid petroleum gas). Then within these fuel categories, the tax amount also differs depending on the number of CO2 Emissions that the car releases in grams per kilometre (g/km).

On diesel and petrol cars if the list price goes over £40,000, you have to pay an extra £355 a year. We often discover that if you add various options (such as paints, alloys or trims) to cars this can take them over the £40,000 price mark and therefore increase their lease price due to tax as well. However, you do not have to pay extra tax if you have a hybrid or electric car.

What Tax Do I Pay on An Electric Car?

A massive benefit of driving an electric car is that you pay nothing towards your road tax as they have zero-tailpipe emissions. This means you can take advantage of cheaper electric lease deals across many exciting models.

What Tax Do I Pay on A Hybrid Car?

Hybrid cars get reduced tax payments due to it being an alternate fuel type. Tax rates are still dependent on the hybrid’s CO2 emissions but as they reduce carbon emissions because of their battery power so you can guarantee a reduction in road tax when you drive a hybrid. See below for the tax rates for 2022/2023:

Tax On My Lease Car?

As you do not own the lease car and rather the finance company do, it is up to them to pay the tax on the vehicle. However, the finance company will include the first year of tax in your leasing price so although you don’t pay the tax directly, you have to pay it in some way.

Any Questions?

If you have any questions about road tax and what cars can benefit from road tax rates, you can get in touch with our team by giving us a call at 0345 350 3776, sending us a message via our live chat service or emailing us at enquiries@willowleasing.com.