How to transfer road tax when buying a used car

How much does it cost to transfer road tax

Can I drive a car I've just bought before buying road tax

Buying a used car at a bargain price feels great – from the minute you shake hands with the dealer, you’ll be raring to get out on the road. The bad news is that, before you put the key in the ignition, you’ll need to tax your car. No one likes stumping up but it’s essential, particularly when it comes to previously-owned and used cars.

This is because the cars will have already been taxed. Before 2014, sellers were able to ‘transfer’ the months of tax that they’d already paid to the buyer, often including the cost in the sale price of the car. However, new rules state that tax cannot be transferred, regardless of how much is left.

Getting organised

As the new owner, you are responsible for taxing the car afresh – any months remaining will be annulled, and the seller can claim a refund. If you buy the car from a dealership, they will be able to help you sort out your road tax. Private sellers are unlikely to do so.

In both cases, you’ll be using what’s known as the New Keeper Supplement, also know as a V5C/2. It forms part of your vehicle registration certificate (also known as the logbook or V5C), and will feature a 12-digit reference number. This confirms that you are the new owner of the vehicle, and responsible for paying the tax.

Using this number, you can pay for your tax immediately by going online at gov.uk/vehicle-tax, or by calling 0300 123 4321, 24 hours a day. You can also pay at your local Post Office if you would rather – and top up on stamps while you’re at it.

How much will it cost me?

For cars registered since March 2001, the amount of tax you pay has depended on the amount of CO2 the car produces, according to the manufacturer’s official figures. This is divided into thirteen increasing bands lettered A-M. You also pay a different rate in your first year than you will in your second, from which point the rate is consistent.

Currently, cars that fall into bands A-D are exempt in their first year, with A exempt indefinitely. Classic cars built before 1976 and electric cars are also fully exempt. Low emissions cars can thus save you hundreds of pounds a year, and the environment too.
However, from 1 April 2017, a comprehensive overhaul of rates means that cars registered after that date will paying a lot more – even those in the A band, that will cost £140 after their first year.

Getting started

If you’re looking for a quality used car, come visit Peoples Ford. We stock a huge range of cars across seven dealerships, and our specialists will help you organise your tax so you can drive off straight away.