Do You Have to Tax a Car When You Buy It? Guide for UK Drivers

Buying a car comes with a lot of excitement, and a few admin tasks. One of the most important is road tax.

When you buy a new car, it’s one of the first things you’ll set up. And if you buy used, the tax doesn’t carry over. Even if the previous owner just taxed it last week, you’ll still need to tax it yourself before you drive away.

In this guide, we’ll break down exactly when and how to tax a car, what happens if you don’t and the common mistakes to avoid, so you stay legal and stress-free.

The basics of UK car tax in 2025

Vehicle Excise Duty (VED), often called “car tax” or “road tax”, is a mandatory charge for most vehicles driven or parked on UK roads.

You’re required to pay it when you register or buy a car, whether it’s brand new or second-hand. The DVLA enforces road tax, meaning that failure to pay leads to fines, penalties and possibly automatic clamping.

What goes into the DVLA’s road tax calculations?

VED is calculated based on:

• The car’s CO₂ emissions (for most cars registered after March 2001)
• Fuel type
• List price (for cars registered after April 2017 — cars over £40,000 pay an extra annual supplement)
• Registration date

How much is car tax in the UK?

There are two key parts to car tax:

• First-year tax (when you buy a new car): This is heavily based on emissions and can range from £10 to over £2,500.
• Standard annual rate: After the first year, most petrol or diesel cars pay £195 a year (as of 2025). Hybrid and alternative-fuel vehicles pay the same.

The cleaner and cheaper your car, the lower the tax.

Fully electric vehicles used to pay £0, but that’s changed from April 2025. Now, newly registered EVs will be subject to the minimum payment of £10 for the first year and the standard rate of £195 for every year thereafter.

The UK government also introduced an Expensive Car Supplement for new registrations, which applies an additional £425 to the total road tax per year from years 2 through 6 if the vehicle’s list price is more than £40,000.

You can calculate your car’s exact tax rate using the GOV.UK tax rate tables.

Do you have to tax the car immediately after buying?

Yes, you must tax the car immediately. There’s no grace period. As soon as you buy a car, whether it’s from a dealer or a private seller, it becomes your legal responsibility to make sure it’s taxed before you drive it.

It’s also important to remember that car tax doesn’t transfer between owners. Even if the vehicle was taxed yesterday by the previous owner, it’s now considered untaxed in your name.

This rule applies even if:

• You’ve only just bought the car
• You’re planning to drive it home the same day
• The car looks taxed on paper

You can be fined and the car could be clamped if it’s not taxed from the moment you take ownership.

Buying a car from a dealership: who sorts the tax?

If you’re buying from a dealership, they’ll usually handle the tax for you. Most dealers also include the first year of Vehicle Excise Duty in the “on the road” (OTR) price, alongside registration, number plates and delivery charges.

If they don’t tax the car on your behalf, chances are they’ll still walk you through the process before you drive off the forecourt.

That said, it’s always worth double-checking. Even if the dealer handles it, you’re still legally responsible for making sure the car is taxed once it’s registered in your name.

Always ask the dealer:

• Is the tax included in the price?
• Will you register and tax the vehicle for me?
• Will I receive confirmation from the DVLA?

Buying a used car privately: what you have to know

Buying from a private seller puts the paperwork on your shoulders, and that includes sorting out the car tax. Unlike dealership purchases, there’s no “on the road” bundle. You’re responsible for taxing the car the moment it becomes yours.

Tax doesn’t transfer to you.

Many private buyers assume that if a car is already taxed, they’re good to go. Not true.

As we’ve already established, road tax is non-transferable. The moment ownership changes, the DVLA cancels the previous tax automatically and refunds any remaining full months to the seller.

That means the car is officially untaxed the second the seller tells the DVLA they’ve sold their vehicle, and driving it home without sorting the tax puts you at risk of fines and penalties.

How to tax a car bought from a private seller

You can tax the car online in minutes. All you need is the 12-digit green “new keeper” slip from the V5C logbook the seller gives you.
Here’s how to do it:

1. Visit gov.uk/vehicle-tax.
2. Enter the registration number and “new keeper” slip code.
3. Choose how you want to pay (monthly, 6-month or annual Direct Debit).
4. Confirm and receive instant confirmation.

You’ll be taxed immediately and legally allowed to drive. You don’t need to wait for the new V5C logbook to arrive.

What if you’re buying a car at auction or salvage?

Buying from an auction house or salvage yard? You still need to tax the car before driving it. In most cases, auction vehicles are sold untaxed and unregistered to the new owner. That means you’re responsible for taxing it just like with a private sale.

Here’s what to keep in mind:

• You’ll need the V5C or V5C/2 slip. Some auctions provide this straight away, others send it by post.
• If the vehicle has no logbook, you’ll need to apply for one using a V62 form, which can delay the taxing process.
• Lots of buyers use a trailer or recovery vehicle to move the car while waiting for documentation.
• If the car is sold as salvage, it might also be declared SORN (off-road). You can't tax or drive it until it's roadworthy, insured and registered correctly.

How to tax your car: step-by-step guide

Taxing a car is quick and straightforward when you’ve got the right info. Whether you're buying from a dealership, a private seller or an auction, here’s how to do it:

What you need before you start

Make sure you have the car’s registration number and one of the following:

• The V5C logbook (if the car is already in your name)
• The V5C/2 “new keeper” slip (if you just bought the car)

You’ll also need valid insurance (you must be insured before you can tax it) and a valid MOT (if the car is over 3 years old).

Ways to tax your vehicle

You can tax your car in three ways:

1. Online (recommended) The fastest and easiest option. Go to gov.uk/vehicle-tax and follow the prompts.
2. By phone: Call the DVLA on 0300 123 4321 (24-hour service, standard rates apply).
3. At a Post Office: Visit a branch that deals with vehicle tax (check first) and bring your documents.

Online and phone methods give you instant confirmation. The Post Office will give you a receipt — make sure you keep it.

Paying monthly, annually or every 6 months

You have three main payment options:

• Monthly Direct Debit is convenient and spreads the cost, but includes a 5% surcharge.
• Every 6 months also includes a 5% surcharge.
• Annually is the cheapest overall, with no added fees.

Trade to trade car marketplace

• Trade-only marketplace
• Flexible selling options
• Maximise your profits

Sign up now

4.9 out of 5 Stars

What if the car is SORN or off-road?

If the car is declared SORN (Statutory Off Road Notification), you don’t need to tax it, but you absolutely can’t drive or park it on a public road.

A SORN is a formal declaration to the DVLA that the car is off the road. It’s typically used if:

• You’re storing the car long-term
• It’s undergoing repairs or restoration
• You’re not ready to insure or tax it yet

However, as soon as you want to drive it again, even just to move it a few streets, you must insure the car, tax it again and get a valid MOT (if required). You can remove the SORN and tax the vehicle instantly online through the process we’ve shown you above.

Don’t risk it: Driving a SORN vehicle on public roads can lead to fines of up to £2,500 or 5x the amount of tax chargeable, whichever is greater.

Common mistakes drivers make when buying and taxing a car

Even experienced drivers get caught out by the rules around taxing a car. These are the most common slip-ups and how to avoid them:

Assuming the car comes pre-taxed

This is probably the #1 misunderstanding. Car tax does not transfer between owners. Even if the seller says, “It’s taxed until December”, that means nothing once ownership changes.

Always treat a newly purchased car — new or used — as untaxed until you tax it in your name.

Not taxing before driving away

It’s illegal to drive a car without tax, even just to get it home. There’s no grace period, and ANPR cameras or DVLA checks catch you instantly. The only exception is if you’re driving the car to a pre-booked MOT test, since you can’t tax a vehicle over three years without a valid MOT certificate.

If you're buying privately or at auction, tax the car online before driving it or arrange transport until you can. If you’re buying used and it doesn’t have an MOT, arrange an appointment directly after you pick up the car.

Using old V5C without update

Some buyers try to tax a car using the previous owner's full V5C logbook without notifying the DVLA of the change. That won’t work. You need either the V5C/2 new keeper slip or a new V5C logbook in your name.

If the seller gives you the whole V5C logbook in their name, they’ve completed the selling process incorrectly. If they didn’t give you the right paperwork, chase it up immediately or apply for a new V5C using a V62 form.

Is there a grace period for car tax in the UK?

No, there’s no grace period for car tax. The moment you buy a car, it’s your responsibility to ensure it’s taxed before it’s driven anywhere. ANPR cameras, DVLA checks and roadside enforcement are able to catch untaxed vehicles instantly.

If you’re caught driving without tax, you can face:

• A £1,000 fine (higher with a SORN)
• Your car being clamped or towed
• Additional storage and release fees

Tax the car immediately or arrange for it to be transported until you can. There are no exceptions. If you’re not ready to insure and tax it yet, declare it SORN and keep it off public roads until you are.

How do I check if a car is taxed?

You can check a car’s tax status in seconds using the DVLA’s free online tool. Just go to Car.co.uk, enter the car’s registration number (number plate) and review the displayed details. This tool works for any car, whether you own it or are thinking of buying it.

Can I tax a car without insurance?

No, you can’t tax a car without valid insurance. The DVLA uses the Motor Insurance Database (MID) to check that your vehicle is insured before allowing you to tax it. If your insurance isn’t active or doesn’t appear in the system, your tax application will be rejected.

Also double-check the start time. Some insurers activate the policy immediately, while others may start it from a future date.

Can I cancel car tax and get a refund?

Yes, you can definitely cancel your car tax and get a refund for any full remaining months. This happens when:

• You sell or transfer the vehicle
• The car is written off or scrapped
• It’s declared SORN (off-road)
• It’s exported or stolen
• You switch to a tax-exempt category, like a disabled vehicle

Once you notify the DVLA of the change (usually by updating the V5C or declaring SORN), they’ll automatically cancel the tax and issue a refund by cheque to the registered keeper.

What if I’m gifting the car instead of buying it?

Even if no money changes hands, the rules are exactly the same. When a car is gifted to a friend, partner or family member, the DVLA still treats it as a change of ownership.

It’s your responsibility to tell the DVLA and update the V5C logbook to reflect the change. From that point, the existing tax is cancelled automatically and the new keeper needs to tax the car immediately.

The person receiving the car will need either the V5C/2 from your logbook or a new V5C in their name to tax it. Make sure you make them aware of their responsibility before you give the car as a gift, because they’ll be on the hook for any fines if they’re caught driving it without tax.

The bottom line

If you’re the registered keeper of a car, you’re legally responsible for making sure it’s taxed. No one else.

If you’re buying from a dealership, they might handle the paperwork, but you still must confirm it’s been done before you drive away. And if you’re buying privately, at auction or receiving the car as a gift, taxing it is entirely on you.

There’s no grace period, no transfer of tax and no excuses.