CAR tax and insurance are boring but essential, something that’s as true for electric vehicles as petrol and diesel-powered cars.
When buying a new or used electric vehicle, you’ll need to do your research, checking tax rates and comparing insurance quotes.
In the past, car tax was free for electric vehicles, but things are changing.
In this guide, we’re going to provide details on tax rates for electric vehicles, clarifying the changes that are due to take place on 1 April 2025.
We’ll also look at insurance costs for electric vehicles and provide Sun Motors’ choice of the cheapest electric vehicles to insure today.
Electric vehicle tax
Electric vehicles used to be exempt from paying road tax (or Vehicle Excise Duty, if we’re using the technical term), but that’s soon going to change.
We provide a breakdown of the latest vehicle tax rules, costs and implications for electric vehicles.
What is electric vehicle (EV) road tax?
Electric vehicle road tax is a payment that every driver needs to pay each year to legally drive on the roads.
You can pay the tax as a one-off payment or split it into 12 monthly payments.
If you get caught driving without tax, you could be fined up to £1000.
Buying a used car? Find cars for under £150 on Sun Motors here.
Do electric car owners pay road tax?
Yes. Electric vehicle drivers (including those who drive all-electric vehicles, plug-in hybrid electric vehicles and hybrid electric vehicles) will need to pay road tax from 1 April onwards.
You can find details of all-electric vehicle tax rates below.
DVLA electric car tax changes: what were the most recent changes to car tax?
The rules on electric vehicle tax are due to change on 1 April 2025.
This means that electric car owners will have to pay tax. The exact amount you pay depends on the age of the car you drive.
To make it easy, we’ve summarised the changes here:
- Electric, zero or low-emission cars registered on or after 1 April 2025: You will need to pay the lowest first-year rate of vehicle tax set at £10 from 1 April 2025. From the second tax payment onwards, you will pay the standard rate. This will be £195.
- Electric, zero or low-emission cars registered between 1 April 2017 and 31 March 2025: You will pay the standard rate. This will be £195.
- Electric, zero or low-emission cars registered between 1 March 2001 and 31 March 2017: These vehicles will move to the first band that has a VED value. This will be £20.
Will all electric cars pay road tax in 2025
The rules now mean that anyone with an electric car will pay at least some road tax.
Model: Renault Zoe
Road tax for electric cars can be as low as £20 (for cars produced between 2001-2017) to a standard rate of £195 for newly registered cars.
Electric vehicle insurance
Insurance is an essential expense for every car. Whether you’re buying a new or used electric vehicle, spending some time comparing insurance quotes can help you calculate an accurate total cost of ownership.
Are electric cars cheaper to insure?
Electric vehicles can be more expensive to insure, says the RAC. That’s because purchase costs are higher and repairs can be more complex and costly.
Electric vehicle batteries are the most expensive part of any car, with replacements costing £5000 or more. These are all factors in electric vehicle insurance.
However, the growing number of electric vehicles on the road will likely see insurance costs stabilise in the near future.
Industry average figures don’t necessarily reflect individual risk. Insurers will calculate your premier based on your age, driving experience, any penalties and points and address.
They’ll also look at the age, cost and performance of your car, as well as its insurance group. You can check your car’s insurance group on this helpful Monseysupermarket electric car insurance index.
The easiest way to check electric vehicle insurance costs is to use an insurance comparison site. Always be 100% honest about who’s driving the car, where and when while getting your car insurance comparison quote.
Top 5 cheapest electric vehicles to insure
The helpful people at Admiral have listed their cheapest electric vehicles to insure. Here they are in order of cost to insure:
- Lexus LBX
- Cupra Born
- Volkswagen ID
- Honda E:Ny1
- Mini Cooper Electric
Lexus LBX (Average annual premium: £622.23)
Model: Lexus LBX
The Lexus LBX is the smallest Lexus, but it’s still a Lexus – that means luxury driving, excellent in-car entertainment, a lush interior and a smooth ride
Cupra Born (Average annual premium: £623.33)
Model: Cupra Born
The Cupra Born is an all-electric hot hatch that’s fast and a little furious. It’s built on the same platform as the Skoda Enyaq IV and VW ID.3, so you know it’s built to last.
Honda E:Ny1 (Average annual premium: £633.04)
Model: Honda E:Ny1
The Honda E:NY1 is a practical electric vehicle with above-average performance and battery life, says Whatcar?. It’s slightly let down by slow(er) battery charging time when compared to rivals.
Mini Cooper Electric (Average annual premium: £641.07)
Model: Honda E:Ny1
How can you not love the Mini Cooper Electric? It’s everything that we love about the traditional Mini with a battery-powered motor.
Top Gear agrees, saying it’s a huge amount of fun to drive with great handling. Space is limited, but the clue is in the name…
Volkswagen ID (Average annual premium: £626.24)
The VW ID is a small(ish), city-style SUV that’s leading VW’s all electric range. Reviews have been positive, and it’s a reliable and robust car that’s aimed at the urban market, like this VW ID 4.
Electric car insurance costs: Cheapest electric car insurance UK
The popularity of electric vehicles means that you don’t need to go to a specialist anymore. You can use any of the comparison sites or go directly to an insurer’s website.
The exact costs you’ll pay for electric vehicle insurance depend on all the factors outlined above.
It’s worth getting several quotes and taking the time to compare each policy to see what is and isn’t covered.
Some drivers may benefit from working with a broker, particularly if they have lots of points on their license, a poor credit rating, or want to insure a modified or high-value electric vehicle.
Electric vehicle tax and insurance FAQs
Which electric vehicle is the cheapest to insure?
According to insurance company Admiral, the Volvo EX30 is the cheapest electric vehicle to insure, with an annual premium of £620.
Why is it so cheap? The Volvo EX30 is a stylish and capable SUV that’s received rave reviews from experts, including Whatcar?. At less than £40k it’s classed as an affordable EV, but it’s certainly not cheap.
We’re not able to access Admiral’s systems to understand why it’s so cheap, but we trust their calculations.
Sun Motors: Buy your next vehicle today
If you’re part of the 3.3 million Brits looking to buy a used vehicle this year, Sun Motors is an ideal place to start
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Enjoy:
- A choice of fuel type whether it’s petrol, diesel, electric or hybrid
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- Financing options
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Do electric cars have to pay the congestion charge in 2025?
Drive an electric car into London and you’re currently exempt from the congestion charge, but this is due to change on 25 December 2025.
From this date onwards, all EV drivers will need to pay £15 to drive in London. (This is because the vehicles no longer qualify for the Cleaner Vehicle Discount.)
Electric vehicles are currently exempt from paying to enter many of the UK’s congestion zones in cities like Bristol, Bath and Birmingham.
However, this can – and probably will – change, so it’s always worth checking before you travel.
Use this Government congestion zone checker to see if you’ll need to make a payment to drive your electric vehicle in a low-emissions zone.
Is there a tax difference between electric and hybrid/petrol vs electric vehicles?
PHEVs and HEVs are both classed as low-emission vehicles, so the new tax rules apply.
From 1 April 2025, you’ll need to pay tax for your electric vehicle, plug-in electric hybrid or hybrid car.
