Car tax changes: what UK drivers need to know about new 2025 DVLA road tax changes for older cars

• Road tax will rise for most petrol and diesel owners starting in April 2025
• First-year rates will double, with higher fees for newly registered polluting cars
• Vehicles registered between 1984 and 2001 will see the biggest impact due to a different tax system
• Diesel car owners will face the largest increases, with an average rise of £1,113
• Electric vehicles will lose their first-year tax exemption, and hybrid owners face extra charges

Owners of older cars will see an increase in road tax in 2025.

Starting this spring, Vehicle Excise Duty (VED), commonly referred to as road tax, will rise for most petrol and diesel vehicles. These changes, introduced by the Driver and Vehicle Licensing Agency (DVLA), will take effect in April.

So, what’s changing, and how will it impact drivers’ finances? Here’s a breakdown of everything you need to know.

What’s changing in April 2025?

VED rates are largely determined by the amount of CO2 emissions produced by fossil-fuel-powered cars, with higher-emission vehicles placed in higher tax bands.

First-year VED rates are set to double, meaning newly registered polluting cars may face higher fees to stay on the road. HMRC has confirmed that VED increases will align with inflation, similar to last year.

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Experts predict that drivers of lower-powered vehicles will see their annual VED rise by £10, from £210 to £220 in 2025/26. Owners of more powerful cars (above 1549cc) will face a £15 increase, with their fees jumping from £345 to £360.

Cars registered between 1984 and 2001 will be especially affected by the tax changes, as they fall under a different tax system - vehicles made after 2001 are not taxed based on their size.

New car buyers can expect an average VED increase of £418, according to GoCompare.com. Diesel car owners will bear the brunt of the increases, with an average rise of £1,113 - roughly double the increase for petrol vehicle owners.

Zero-emission vehicles, like electric cars (EVs), will no longer enjoy tax-free status in their first year. Hybrid vehicle buyers, starting in April, will face an additional £135, or an average increase of £327, depending on the model.

If you want to check how much you currently have to pay in VED, you can use the Government’s website to check the rates for new cars, and used cars.

What do you think about the upcoming VED changes? Will these tax hikes impact your car choices or budget in 2025? We’d love to hear your thoughts and experiences - drop a comment.