Worryingly, as many as 64 per cent – two-thirds – of road users saythey are unsure whether their own car tax has actually increased.

Six in 10 drivers don’t fully understand the car tax rates and Vehicle Excise Duty (VED) changes which kicked in in April. And as many as 64 per cent – two-thirds – of road users saythey are unsure whether their own car tax has actually increased.

Over half of UK motorists polled in the survey warned that they still don’t know how much the changes cost them in cash terms. Iain Reid, Head of Editorial at Carwow, said: “Road tax might not be the most exciting part of owning a car, but it’s one of the most important — especially when changes impact every driver in the UK.

“Our research shows just how much confusion still exists post-April and highlights the urgent need for clearer communication from the government.”

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Iain added: “While the flat £195 rate is simple on paper, the removal of exemptions, the new cost layers, and inflation-linked increases have clearly made things harder to track. People are unsure what they owe — especially when taxing a car for the first time under the new rules.

“On a positive note, the public’s support for EVs is holding firm.” All new cars sold will have VAT added which is charged at the standard 20% rate. This will be included in the price you see, unless it’s a business purchase in which case it may be listed separately.

This is because businesses can claim back some or all of the VAT depending on how the vehicle is used. For example, company vehicles used for both business and personal use may be eligible for a 50% VAT refund.

There are varying VED charges and regulations based on when the vehicle was first registered. In the case of a new car, the rules introduced since 1 April 2017 are the ones that apply.

The VED tax from the second year onwards is simplified into a flat fee across petrol, diesel, hybrid and electric cars. Drivers of cars that cost over £40,000 will also have to pay an additional annual charge from the second to the sixth year of the car’s life.

During the 2024 Autumn Budget, it was announced that the first year car tax is changing from April 2025.