Thousands of electric car owners have saved millions of pounds by taking advantage of a simple car tax loophole ahead of major 2025 Vehicle Excise Duty (VED) updates. Electric car tax exemptions came to an end this Spring, and owners will face £195 per year in VED bills from April 1, 2025.
However, finance experts, including Martin Lewis, had urged road users to renew their policy ahead of the April 1 cut-off to make major savings. By refreshing their renewal date in March before the date EVs were charged, owners could effectively secure another 12 months for free in a major loophole. This means motorists who renewed their VED on March 31 will have paid nothing and will not be liable for fees until 2026.
New data from the DVLA shows road users have done exactly that, with a staggering 244,598 electric car owners renewing their VED car tax policy in March.
This is a whopping 1,467% increase compared to the 15,614 renewals recorded a year prior ,back in March 2024.
The figures show that EV owners in the UK saved a potential £47,696,610 by renewing their VED early.
The figures were obtained by motoring experts at cinch as part of a Freedom of Information Act (FOI) request to the DVLA.
Sam Sheehan, motoring editor at cinch explained: “Such a big increase in renewals shows just how many EV drivers might have got themselves another year of road tax-free motoring, and who wouldn’t want to save £195 if they had the chance?”
A closer look at the data shows motorists in Bath took the biggest advantage of the new little-known rule.
Figures show that car tax renewal rates across the city were up an eye-watering 14,534% over the past 12 months.
Falkirk was next with a whopping 7,219% increase in motorists renewing their VED terms in the Scottish town.
Darlington noticed a 5,617% followed by West London (5,284%) and Birmingham (3,226%). New rules mean that electric cars registered between April 1, 2017 and March 31, 2025 will have to pay the standard VED rate of £195.
However, brand new electric vehicles with a list price over £40,000 will be among the most affected due to the ‘Expensive Car Supplement' fee.
This is an extra £425 rate applied on top of the standard £195 fee over a period of five years between the second and sixth years on the road.
Sam added: “It goes to show how savvy EV drivers were ahead of the road tax changes – and how useful consumer advice led to savings for so many people.”
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