The 2021 Car Tax Index

When looking for a new car, one of the additional costs that is important to remember is that of Vehicle Excise Duty (better known as “car tax”, “vehicle tax”, or “road tax”). 

Road tax is calculated based on fuel type and emissions of a vehicle, dependent on the make and model. Cars with higher emissions could have to pay over £2,000 to get on the road. However, smaller and more efficient cars can be exempt from tax altogether, which is how the Government is encouraging the adoption of economical vehicles. 

But a more efficient car won’t just shave some money off your car tax each year. They’re also much better for the environment and the fact that they use less fuel means that they’re much cheaper to run in the long term. 

So, which vehicles can you expect to be taxed the most for purchasing? We’ve analysed 150 of the most popular cars currently on the market to find out. 

Note: the figures below relate to the first tax payment, which is made when you first buy a car and covers it for the first 12 months that you own the car, rates for the second payment onwards are lower. 

The first payment is made when the vehicle is first registered, with diesel cars (other than those below a certain level of emissions, known as the RDE2 standard) paying a higher rate, while alternative fuel cars pay a lower rate. 

Of the 150 most popular new vehicles in the country, four were charged the very top bracket of car tax, £2,245, each of them being fuel-guzzling SUVs. 

Both the Porsche Cayenne and Range Rover Vogue SE SDV6 275 sit in the very top tier of emissions, with 265g/km and 278 g/km respectively. 

The other two vehicles to pay in the top bracket are the Toyota Land Cruiser Active D-4D and Land Rover Discovery HSE SDV6, which despite being in a lower emissions bracket, have to pay a diesel surcharge. 

Of these vehicles, the Porsche Cayenne will cost you the most to insure, with an average premium of £1,325, meaning in total you’ll be paying over £3,500 for your first tax and insurance payments. 

There were a further four vehicles in the second-highest bracket, with each being taxed £1,910 for the first vehicle excise duty payment. 

As well as petrol-hungry Porsche models like the 911 Carrera 2 and Macan S, there were a further two diesel models, the Audi Q7 S Line Quattro 45 TDI 231 MHEV and Volkswagen Touareg R-Line TDI SCR 231. 

And owners of five more vehicles also have to pay over £1,000 when registering their new vehicles too. 
 
These included the Porsche 718 Boxster sports car, as well as SUVs such as the Mitsubishi Outlander Design and Volvo XC90 R-Design B5 MHEV AWD. 
 
Note that while the Mercedes GLE-Class 300d 4MATIC AMG is in a higher emissions bracket for diesel vehicles, it’s actually exempt from the diesel supplement due to meeting the RDE2 emissions standard. 
 
While the cost of taxing these vehicles was the same across the board, the average cost to insure them varies quite a lot, from £401 for the Hyundai Santa Fe to £885 for the Mercedes GLE-Class. 

Of the 150 most popular vehicles that we looked at, there were just five that were exempt from paying car tax, each of which was fully electric. 
 
While hybrid vehicles pay less when it comes to vehicle tax, it’s only these fully electric vehicles such as the Nissan Leaf and Kia Soul EV that are fully exempt, including the Tesla Model 3, even though it has a list price of over £40,000, which usually means a higher tax rate. 
 
On the whole, these vehicles are at the cheaper end of the spectrum when it comes to the average cost of insurance, hovering around the £400-£500 mark, although for the Tesla Model 3, that jumps all the way up to £1,210. 

Brought to you by car insurance experts at comparethemarket.com

Methodology

We compiled a list of vehicles with the highest tax from a seed list of the 150 most registered cars in the UK that are still currently being sold, according to the Department for Transport’s data on all licensed and registered vehicles (VEH0128) as of Q4 2020 (October to December).

For each of these vehicles, we took the most common model currently on sale and took the list price and emissions from Next Green Car.

We then calculated how much vehicle excise duty would be payable, based on the current vehicle tax rates.

The first payment is made when the vehicle is first registered, with diesel cars (other than those which meet the RDE2 emissions standard according to Next Green Car) paying a higher rate, while alternative fuel cars pay a lower rate.

After the first year, all petrol or diesel vehicles pay a rate of £155, while alternative fuel vehicles pay £145, with £335 being added to either of these rates if the vehicle has a list price of over £40,000. 

All average insurance premiums sourced from average quotes supplied to customers comparing car insurance on 2021 plate models of the cars above at comparethemarket.com from March to May 2021.

When the “average premium” is referred to, this is the mean average of the top five cheapest prices presented to a customer, where a consumer has clicked through to buy.  
 
There may be results that appear out of the ordinary if we have a smaller number of enquiries. 
 
All data correct May 2021.