Motorists across the UK who own vehicles manufactured before the year 2001 are being warned to brace for higher annual running costs. A scheduled increase in Vehicle Excise Duty (VED), commonly known as road tax, will add up to £15 to the bills of owners with older models from 2026.
Understanding the 2026 VED Increases
The government's annual adjustment of VED rates in line with inflation is set to impact drivers in specific vehicle categories. For the majority of modern car owners, the standard rate for 2025 remains at £195. However, the picture is more complex for both very old and relatively new, expensive vehicles.
New analysis by motoring expert Pete Barden highlights that drivers of cars with engines of 1549cc and below will see their annual VED charge rise to £230 in 2026. In another bracket, motorists will pay £375, which marks a £15 increase from the current rate of £360. This follows an identical £15 hike applied the previous year.
How Car Age and Value Affect Your Tax
The amount you pay is fundamentally determined by when your car was first registered and its fuel type. A significant 'luxury car' supplement also applies to newer, high-value models. If your vehicle had a list price exceeding £40,000 when new (or £50,000 for electric cars), you are liable for an extra £425 fee for five years, from the second year of registration. This can bring the total annual VED cost to £620.
The RAC clarifies the current system: "All petrol, diesel and electric cars registered on or after 1 April 2017 have to pay a flat fee." For cars registered between 1 March 2001 and 31 March 2017, tax rates are still calculated based on CO2 emission bands.
Exemptions and Essential Requirements
There is some relief for owners of classic vehicles. Cars that first hit the road in 1985 or earlier are now exempt from VED under historic vehicle tax rules. Regardless of your car's age, you must have valid car insurance to tax it. Furthermore, any vehicle over three years old (four in Northern Ireland) requires a current MOT certificate.
For those purchasing a new car, the first 12 months of tax is paid in advance, with the rate based on the vehicle's CO2 tailpipe emissions and fuel type. With these changes on the horizon, owners of pre-2001 models are advised to budget for the increased cost of keeping their vehicles legally on the road.
