Best road-tax-free cars

Last updated: Jan 13, 2016

Until April 2017, all new cars sold in the UK that emit less than 100 grams per kilometre of CO2 are exempt from road tax. In response to this, almost every manufacturer now offers at least one ‘sub-100’ model – and they’re not just small hatchbacks, either: everything from estate cars to executive saloons and MPVs are available.

Unsurprisingly, UK car buyers have eagerly taken advantage of this, with recent figures showing that two-thirds of all new models sold are tax-free versions. The resulting reduction in tax revenue is partly why the system is changing in 2017, but until then, the news is good for those in the market for a new motor. Plus, cars bought under the current system will continue to be taxed that way after the new one comes in.

Obviously, exemption from road tax is a good thing, but in picking the best cars to fall into that category, we’ve considered a much broader range of attributes. We were looking for cars that are comfortable, practical, fun to drive, well equipped and great value for money overall. So read on to find out what cars you should be looking at if you want to avoid paying road tax, but also look forward to every journey you make. These are our top 10 tax-free cars.


Skoda Octavia estate

It’s quite remarkable you can get a car as spacious and practical as the Skoda Octavia estate that’s also completely exempt from road tax. Granted, you must go for the modestly powerful 1.6-litre TDI diesel engine, but it’s not unbearably sluggish, getting the car from 0-62mph in 11 seconds. And as well as those tax-free emissions, you should enjoy up to 74.3mpg fuel economy, so forecourt visits will be few and far between. The GreenLine version is even more frugal, with 85g/km emissions and maximum economy of over 88mpg. Add decent handling and generous standard equipment to the mix and you have a real winner. Read more.

Key points

4.9 / 5
Price 
£17,485 - £29,115

Hyundai i10 hatchback

The only thing keeping the Hyundai i10 from the top spot here is its small size relative to the Octavia. But if you don’t need masses of passenger and luggage space, this is a superb little car – we even named it our ‘Car of the Year’ back in 2014. You need to pick your model carefully, though, as only the Blue Drive version falls below the threshold for road-tax exemption. It has a buzzy three-cylinder petrol engine and is good fun to drive, while at the same time returning up to 65.7mpg fuel economy and emitting just 98g/km of CO2. Also impressive is the extensive amount of standard equipment you get thrown in, as well as the practical cabin and smooth ride. Read more.

Key points

4.9 / 5
Price 
£8,995 - £13,045

Skoda Citigo hatchback

The Skoda Citigo is just shaded by the Hyundai i10 on this list due to the latter’s larger interior and longer manufacturer warranty (five years versus three). But the Skoda is still a great small city car – slightly cheaper than its Volkswagen up! and SEAT Mii sister models, yet boasting the same ‘big-car’ feel, soft ride and sturdy interior finish. If you want to go tax-free, you’ll have to skip past the entry-level S model and go for the 1.0-litre ‘Greentech’ version in either SE or SE L spec. The latter gives you the choice of a slightly more powerful version of the same engine, which is worth going for if budget allows, as it’s better suited to motorway cruising. Read more.

Key points

4.9 / 5
Price 
£8,275 - £11,120

Citroen C4 Cactus SUV

You certainly won’t lose the Citroen C4 Cactus in a car park, as it looks like nothing else on the road and comes in range of bright, difficult-to-ignore colours. The car manages to marry style with substance, however, providing plenty of space, excellent fuel economy and a comfortable ride to boot. It all adds up to a package we named our Car of the Year for 2015. There are also innovative features like ‘airbumps’ – plastic panels on the side that are resistant to damage from shopping trolleys or minor impacts. Choosing the 1.6-litre diesel engine gives you the possibility of over 80mpg fuel economy along with avoiding an annual road-tax bill. Read more.

Key points

5 / 5
Price 
£12,990 - £19,880

Nissan Qashqai SUV

A big family SUV that’s exempt from road tax? As hard as that may be to believe, the excellent Nissan Qasqhai offers just that. There are two dCi diesel engines on offer – a 1.5 and a 1.6 – and if you choose the smaller and less powerful of the pair, you can kiss goodbye to that pesky annual payment. Despite its modest size, this engine is more than capable of hauling the car and its occupants along, and should return up to 74.3mpg, too. There are plenty of trim levels to choose from, so there’s a Qashqai for almost every budget. Our top recommendation is the mid-range Acenta Premium, which comes with plenty of kit, yet won’t break the bank. Read more.

Key points

4.7 / 5
Price 
£18,545 - £28,910

SEAT Leon hatchback

The SEAT Leon is basically a Volkswagen Golf that’s had an injection of Spanish style and a bit of a price cut, making it a great buy in our opinion. No Leon is unreasonably expensive to run – even the high-performance models – but as with the Skoda Octavia above, you need to look to the 1.6-litre TDI diesel model for road-tax exemption. The most efficient model in the range, called Ecomotive, puts out just 87g/km of CO2 and should top 85mpg if you drive it carefully. However, there’s a cheaper non-Ecomotive version of the same engine, which emits 99g/km and is therefore also tax-exempt. Its fuel economy drops to a still-impressive 74mpg. Read more.

Key points

4.8 / 5
Price 
£17,700 - £24,695

Citroen Grand C4 Picasso MPV

Like the Octavia estate and Qashqai SUV, the Citroen Grand C4 Picasso is a surprisingly large car to be exempt from road tax. But the French brand’s ultra-frugal e-HDI diesel engine makes it possible, with a CO2 output of just 98g/km. Granted, performance is on the ponderous side, but it’s hard to look past the ability to transport seven people in comfort while seeing fuel economy approaching 70mpg. The Picasso is also significantly cheaper than its main tax-free MPV rival, the Toyota Prius+. Read more.

Key points

4.8 / 5
Price 
£19,970 - £28,735

BMW 1 Series hatchback

Avoiding road tax doesn’t mean cramping your style, as even upmarket, desirable brands like BMW produce tax-free versions of their cars. We think the BMW 1 Series outclasses its biggest rivals the Mercedes A-Class and Audi A3 and the 116d EfficientDynamics version emits less than 99g/km. Plus, unlike some ‘eco special’ models, it costs no more than the standard SE version of the car, while being 6mpg more economical. You get the same sharp rear-wheel-drive handling, smart styling and top-notch interior as any other 1 Series, too. Read more.

Key points

4.1 / 5
Price 
£20,930 - £32,540

Jaguar XE saloon

The Jaguar XE grabbed the headlines in mid-2015 by toppling the seemingly unbeatable BMW 3 Series from the top of the compact-executive-car tree. One of the big reasons for that is its ultra-low running costs, exemplified by the 2.0-litre, 161bhp diesel model. It’s capable of returning up to 74mpg and emits the requisite 99g/km of CO2 for road-tax exemption. On top of that, it’s great to drive, matching the BMW in the handling department, not to mention smartly styled and practical. One of the best buys in the UK today. Read more.

Key points

4.4 / 5
Price 
£26,990 - £44,995

MINI hatchback

You can miss out on road tax and still have great fun behind the wheel with the latest version of the distinctive MINI hatchback. It’s all down to the efficient three-cylinder diesel engine that powers the basic MINI One D and sporty MINI Cooper D, while keeping emissions under the 100g/km threshold. The One D is fine for nipping around town, but if you spend more time on the motorway or just want a bit more oomph when you put your foot down, it’s worth forking out a bit extra for the eager Cooper. Read more.

Key points

4.1 / 5
Price 
£14,075 - £21,400