Tax and other money-saving benefits of green, electric and hybrid cars

Hybrid cars, electric vehicles and other green cars can save you money through lower tax bills and other financial savings – here’s how.

High fuel economy means low running costs

Hybrid, electric and other green cars deliver high fuel economy, therefore saving you money on fuel – whether that is petrol, diesel or electricity.

Electric cars are very cheap to run; they cost £2-£3 to fully charge, which gives a typical range of 100 miles. An average petrol or diesel car costs £12-£18 to drive 100 miles – in other words six times the cost of an electric car.

Tax savings from low emissions

Cars that achieve high fuel economy also have low CO2 emissions. Low emissions result in tax savings in a number of areas.

Vehicle excise duty for green cars

Since 2001, cars in the UK have had their tax (vehicle excise duty) based on their carbon emission figure. A more economical car can currently save the owner hundreds of pounds in car tax each year. For example, a car in band A, B, C or D – up to 130g/km CO2 – pays zero tax for the first year, whereas a car in Band M, which emits over 255g/km CO2, pays £1030 for the first year.

Find out car tax rates and information on the fuel economy and emissions of all new cars on the market in the UK at: http://carfueldata.direct.gov.uk/

Company car tax

Company car drivers can save significant amounts of ‘benefit in kind’ tax by choosing a car with low emissions. There is zero benefit in kind tax to pay on fully electric cars, until 2015.

London Congestion Charge exemption

Cars with emissions of 100g/km CO2 or less are eligible for a 100% discount on the London Congestion Charge.