Major changes to Vehicle Excise Duty (VED) take effect from April 2026, and they could affect what your car is worth on the second-hand market. If you have been thinking about selling, understanding these changes now puts you in the strongest position.
What Is Changing in April 2026
The most significant shift is that electric vehicles will pay road tax for the first time. Since 2001, zero-emission cars have been exempt from VED entirely. From 1 April 2026, newly registered electric vehicles will pay the standard first-year rate, and those already on the road will move into the standard annual rate alongside petrol and diesel vehicles.
The annual standard rate for most cars registered after April 2017 will also increase. For the 2026/27 tax year, the flat rate rises in line with inflation. Vehicles in the highest CO2 bands will continue to face the steepest first-year charges, with some models attracting over five thousand pounds in first-year VED.
Cars with a list price above forty thousand pounds remain subject to the expensive car supplement for five years from the date of first registration. This additional annual charge applies regardless of fuel type, meaning battery electric vehicles priced above this threshold will now face the supplement as well.
Which Vehicles Are Affected Most
The impact varies depending on what you drive:
- Electric vehicles: Owners who currently pay nothing will see an annual bill appear for the first time. While the standard rate is modest compared to high-emission petrol or diesel cars, it represents a new ongoing cost that some buyers will factor into their purchasing decisions.
- Plug-in hybrids: These already paid a reduced rate in some cases but will now be treated the same as conventional vehicles. The incentive to choose a PHEV on tax grounds diminishes.
- High-CO2 petrol and diesel cars: First-year rates for the most polluting vehicles remain punitive. If you own a large SUV or performance car with high emissions, the first-year VED for a new buyer could be a barrier to resale value.
- Older vehicles: Cars registered before April 2017 continue under the old VED bands based on CO2 output. The changes primarily affect post-2017 vehicles and new registrations.
How VED Changes Affect Resale Value
Road tax changes influence the used car market in several ways. Buyers increasingly factor in the total cost of ownership when choosing a vehicle, and higher annual VED is a recurring expense that can make certain cars less attractive.
For electric vehicles, the introduction of VED removes one of the key financial incentives. While running costs remain lower overall, the perception of electric cars as “tax free” disappears. Some analysts expect a short-term dip in demand for used EVs as buyers reassess the cost savings.
For high-emission vehicles, the combination of steep first-year VED, clean air zone charges, and rising fuel costs continues to push values downward. If your car falls into a high CO2 band, its market value is likely to decline further as the new rates take effect.
Conversely, vehicles in the lowest emission bands that are not fully electric may hold their value better. Efficient petrol and diesel cars with low running costs remain popular with buyers who are not ready to switch to electric.
Is Now the Right Time to Sell Your Car
If you are considering selling, there are good reasons to act sooner rather than later:
- Electric vehicle owners: Your car is currently more attractive to buyers because of the zero-tax benefit. Once that disappears in April, used EV buyers lose one of their key selling points. Selling before the change takes effect could secure a better price.
- High-emission vehicle owners: Values on large-engine and high-CO2 vehicles have been declining for several years. Each new round of tax increases and clean air zone expansions accelerates the trend. Waiting typically means accepting a lower offer.
- Anyone upgrading: If you plan to buy a new or different vehicle, selling your current car while values are stable makes the transition more affordable.
Getting a free valuation takes 60 seconds and gives you a clear picture of your car’s current market value. There is no obligation, and the price is guaranteed for four days.
Electric and Hybrid Vehicle Implications
The 2026 changes mark the end of the EV tax holiday. While electric cars still benefit from lower fuel costs, reduced maintenance requirements, and exemptions from most clean air zones, the VED exemption was a significant financial draw for many buyers.
For hybrid owners, the picture is mixed. Plug-in hybrids with low official CO2 figures may see modest VED rates, but the removal of specific hybrid incentives means there is less financial distinction between a PHEV and a conventional car from a tax perspective.
If you own an electric or hybrid vehicle and are thinking of selling, it is worth checking your current valuation. Market conditions change, and locking in a price before April gives you certainty.
What This Means for Van Owners
Commercial vehicles follow a different VED structure, but the direction of travel is the same. Electric vans have enjoyed similar tax benefits to electric cars, and these are being adjusted. Van owners in urban areas should also consider clean air zone charges, which are expanding across UK cities and can add daily costs that affect the viability of older diesel vans.
If you own a van that does not meet the latest emission standards, selling sooner preserves more of its value. We buy vans of all types and conditions, including those that are not compliant with current emission zones.
Frequently Asked Questions
When do the VED changes take effect?
The new rates apply from 1 April 2026. Any vehicle registered before this date will move to the new annual rates from their next renewal.
Will my car be worth less after April 2026?
It depends on your vehicle. High-emission cars and some electric vehicles may see values adjust as buyers factor in the new tax costs. Getting a valuation now gives you a baseline to compare.
Should I sell before or after the changes?
If your vehicle is likely to be affected negatively, selling before April generally preserves more value. For vehicles in low-emission bands with modest VED increases, the impact may be minimal.
Do you buy electric vehicles?
Yes. We buy all electric vehicles regardless of make, model, or age. Get a free EV valuation to find out what yours is worth today.
