Best used cars that cost £20 a year to tax

  • Our pick of 10 small used cars that cost £20 or less to tax
  • Choose from the chic Fiat 500 to the frugal Skoda Fabia
  • All can be bought second hand for less than £5,000

Car tax, like all taxes, is a necessary evil. Typically, it's also complicated. Based on the carbon dioxide emitted by your car in the first year, it's then a flat rate for all cars in the second year onwards, with a slight discount for hybrids.

It's not always been this way. Before March 2017, still using the grams of carbon dioxide emitted per kilometre, expressed as g/km CO2, some cars qualified for £0 road tax, while others only cost a budget-friendly £20.

The good news is, some years on, these cars still qualify under the road tax conditions at the time of production and new sale, thus buying from the secondhand car market means you can take advantage of this benefit on a used car market.

If you're on a tight budget, or fancy giving less than £155—the current second-year flat rate for all new cars— to The Taxman, it's worth scanning used car listings for a bargain with a bonus.

We've put together a list of the best ten used cars to take a look at. They'll set you back between £1,000 and £5,000 used, which should prove cheap to buy and run, and in some cases also be great fun to drive.

Best cars that cost £20 a year to tax

VW Up
Ford Fiesta
Skoda Fabia
Toyota Aygo
Fiat 500
Peugeot 108
Citroen C1
Honda Insight
Kia Rio
Suzuki Alto

VW Up (2016-2017) 

VW Up - £20 per year to tax

The Up is an amazing all-rounder, offering practicality, a fun driving experience and cheap running costs. With a range of applicable variants, such as the BlueMotion Tech Move Up, the limited edition Groove Up (offering a premium audio system) and Rock Up (offering fancy bodykit extras), there's plenty of opportunity to get a zero or twenty-quid tax bill on a brilliant little runaround.

Ford Fiesta (2008-2017) 

Ford Fiesta - £20 a year to tax

Our 'Best Used Car' award winner 2022 and one of the best-selling models in the UK market, the Ford Fiesta is a reliable, easy to run, cheap to service, practical all-rounder. It looks good and drives well, and what's more, the five-door 1.4 TDCi Edge variant boasts an environmentally friendly 110g/km of carbon emissions, putting it in the £20 road tax bracket. Winner.

Skoda Fabia (2009-2014) 

Skoda Fabia Greenline TDI - £20 a year to tax

The handsome second-generation Skoda Fabia stuck to what the original model had been doing since it was launched in 2000 – providing honest, cheap-to-run transport based on tried-and-tested Volkswagen technology. This one was well built, practical and good value, and still looks pretty modern today. In short, the 1.6-litre diesel Fabia is an appealing car to own, while excellent ride quality makes it comfortable too.

Toyota Aygo (2009-2014)

Toyota Aygo - £20 per year to tax

The Aygo was Toyota's first European-built take on an urban runabout aimed primarily at active twenty-somethings. Jointly developed with Peugeot and Citroen (although the vehicle design was all Toyota's work), the Aygo has a frugal yet feisty three-cylinder engine, ultra-low running costs and superior quality to most cars in its sector. The good news is that the Citroen C1 and Peugeot 107 sister cars are even cheaper to buy.

The details

Fiat 500 (2008-2014)

Fiat 500 - some versions are £20 a year to tax

The Fiat 500, launched in 2007, is a small car people have taken to their hearts, and although it's been improved many times along the way, the new car you can buy today still looks largely the same. That gives older used versions a wide-ranging timeless appeal. Despite Fiat's lasting reputation for unreliability, the 500 is solid and dependable, and the 1.3-litre diesel should last for years to come.

The details

Peugeot 108 (2014 onwards)

Peugeot 108 - £20 per year to tax

Certain variants of this bijou city car scrape just under the 100g/km of CO2 to firmly put owners in the zero road tax bracket. The Peugeot 108 has the same underpinnings as its sister brand, Citroen C1 and the Toyota Aygo. Despite the 108 being a bit heavier than its 107 cousin, it's still brutally nippy and a lot of fun. What's more, it has an air of sophistication over its peers.

Citroen C1 (2005-2014)

Citroen C1 – £20 a year to ax

Essentially the same car as the Toyota Aygo (even built in the same factory), albeit with slightly different specs and prices, the C1 has been a popular choice among young inexperienced drivers. Available with three or five doors, it's still an excellent small car to zip around a local area. Longer journeys might prove a bit cramped for more than two adults plus luggage, but the road tax savings are worthwhile for non-daily drivers.

Honda Insight (2009-2014) 

Honda Insight - £20 per year to tax

This Honda Insight was one of the first petrol-electric hybrids, making it a practical and economical five-door hatchback, like the Toyota Prius. Its plus points are generous interior space and a large, well-shaped luggage area. If you're buying one now, there are some neat touches you'll appreciate, including the digital dash which tells you how green your driving style is.

Kia Rio (2011-2017)

Kia Rio - £20 per year to tax

Offering one of the best warranties on the market, the Kia brand has become synonymous with reliability, quality and value-for-money. While the interiors may not always be as swish as other makes, the Rio's three-door 1.4 CRDi variant is an affordable choice. What's more, select top-spec Level 3 EcoDynamics and it's still only £20 for road tax.

Suzuki Alto (2009-2014)

Suzuki Alto - £20 per year to tax

The Alto is a small car that was designed to cut running and purchasing costs to the bone. Consequently, it's cheap to buy and even cheaper to run, and something of an unloved hero on the used car market. Those on a tight budget will appreciate its exceptional fuel economy, low insurance costs and cheap road tax.

Further reading

>> The Parkers guide to car tax

>> The latest car tax rates