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Best used cars that cost £20 a year to tax

  • Our pick of the best used cars that cost £20 or less to tax
  • Choose from the family friendly Golf to the frugal Skoda Citigo
  • Cut back to weather the cost-of-living crisis by shopping smarter

Written by Richard Kilpatrick Published: 17 March 2024

Car tax is one of the most visible ways motorists pay the government for the use of their car. Like many taxes, Vehicle Excise Duty (VED)or ‘road tax’ isn’t straightforward. Since 2001 it’s been based on the carbon dioxide emitted by your car, but the rates change every year, and the rules keep evolving to adapt to electric technology and driver habits. Fortunately, low-CO2 used cars registered between March 2001 and April 2017 still qualify for £20 a year road tax.

Since 2017, a new scheme for VED means used cars pay a flat rate of road tax regardless of emissions. The penalty for high CO2 comes with the first year one-off charge paid by the owner who can afford the most for the car, buying it new – an attempt to make the tax fairer reflected by an enhanced rate applied for the next five years for cars over £40,000 new. Once the car is six years old, the rate of VED is the same.

However, VED was calculated differently before March 2017. Cars were placed into bands, 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. Happily, these cars still qualify under the road tax conditions at the time of registration.

The benefit of buying a used car in Bands A, B or C for VED is a substantial saving over the flat rate of £180 per year new cars pay – set to rise to £190 later in 2024, and likely to follow inflation thereafter. At the time of writing, Band B cars cost £20 a year to tax and the current plan is to remove the zero-rated VED category entirely from April 2025, but the cheaper rates are not being increased yet.

Buy the right used car and you could continue enjoying a car that costs £20 a year to tax for a few years to come. Here’s our pick of the low-tax used buys in 2024.

Best cars that cost £20 a year to tax

Editor's choice: Audi A3 1.4 TFSI S-tronic

Sporty hatch with strong image and many talents

Price: From £6,000
With the spread of clean-air zones diesel is harder to recommend, despite a glut of sub-100 g/km models flooding the market after 2009. The good news is you don't need a diesel to enjoy low road tax and good economy – the Audi A3 Mk3 with either the 1.4-litre or 1.5-litre TFSI engine falls into the lower tax bands. You'll want an S-tronic automatic model to get the cheapest rate, and remember that models registered after March 2017 pay the current fixed annual rate regardless of engine.

Find an Audi A3 for sale near you

Manual cars tend to drop into Band C for £35 per year tax – and this is specification dependent, but you can tax a sporty 1.4 (CoD - cylinder on demand) S-line for £20. You won't be disappointed by the performance, handling or running costs, and there's no denying the A3's enduring appeal and upmarket image. While the A3s with the lowest VED are largely three-door models, the five-door A3 Sportback has a few options for £20 tax as well.

Problems to watch out for:

Suspension wear, timing belt changes and on older cars, failure of the retractable infotainment screen.

Pros

  • Fuel-saving tech really works
  • High build quality
  • Relatively easy maintenance

Cons

  • High demand, strong values
  • Some expensive components
  • Mild ASBO image in some colours
Fuel type Petrol
ULEZ compliant Yes
Typical insurance group 24

Volkswagen Golf 1.4 TSI GT or R-Line

Sensible family hatchback, minimal running costs

Price: From £7,000
The Volkswagen Golf Mk7 mirrors the Audi A3's technology, and is undoubtedly a good buy for anyone looking for a reliable, easy to maintain used family car. However, the premium brand's popularity with the fleet market means Audi's version of the Golf is cheaper. The difference may be small, but factor in condition, age and mileage, and the VW commands higher second hand prices.

Find a VW Golf for sale near you

That just means it sits lower on our list, the Golf is still an excellent choice. As with the Audi position in bands B or C depends on spec, but there are more manual versions of the Golf with suitably low road tax. The 1.0-litre petrol models also qualify, but beware April 2017-on models. The Volkswagen Golf Mk7 was the 2023 Parkers Used Car of the Year.

Problems to watch out for:

Uneven tyre wear, front suspension bushes, noisy timing chain, skipped DSG gearbox services

Pros

  • It's as good as the hype
  • Later models are better
  • Sensible costs all round

Cons

  • Basic spec sparse
  • Most Golfs are diesel
  • A3 is better value used
Fuel type Petrol
ULEZ compliant Yes
Typical Insurance group 7-34

Ford Fiesta Mk7 1.4 TDCi

Ford's best-selling supermini is great – away from CAZs

Price: From £2,000
Our ‘Best Used Car’ award winner 2022 and in 2024 – consistently, one of the best-selling models in the UK market, the 2008-2017 Ford Fiesta is a reliable, easy to run, cheap to service, practical all-rounder. It looks good and drives well. For a great combination of economy, performance and low tax, the five-door 1.4 TDCi Edge variant achieved a low 110g/km of carbon emissions when new, putting it in the £20 road tax bracket.

Search used Ford Fiesta cars for sale

However, this one will attract charges for ULEZ or clean-air zones, so if you're driving in such areas you might want to check out the 2008-17 Ford Fiesta VED rates and look for the 1.0-litre Ecoboost. Why isn't that one in this list? Because it's in band A, and one of the best used cars with free road tax instead.

Problems to watch out for:

The diesel model is prone to injector leaks, failure of the dual-mass flywheel and blocked DPFs. It's also worth checking features like the heated windscreen still work when buying older, cheaper examples

Pros

  • Massive dealer network
  • Affordable maintenance
  • Some advanced tech

Cons

  • Diesel = ULEZ
  • Rather dated audio
  • High-mileage reliability
Fuel type Diesel
ULEZ compliant No
Typical insurance group 2 - 20

BMW 2 Series Active Tourer

The ultimate driving-to-school machine?

Price: From £6,500
Diversify and thrive – BMW went after two decidedly off-brand ideas with the 2 Series Active Tourer, making a front-wheel drive, boxy MPV. There's still plenty of BMW DNA in there, and as a post-2010 new model a scan through BMW 2 Series VED rates reveals plenty of cheap to tax options. The Active Tourer is a five-seater, but if you need more space the 2 Series Gran Tourer seven-seater also has £20 VED options.

Search used BMW 2 Series Active Tourer cars for sale

Diesel models provide the lowest VED options, either 218d or 216d (there are some zero-rated models). The petrol versions fall into band C, so if you prefer the cheaper fuel it's only a small extra amount. For those who can park on the drive and plug-in, the 225xe hybrid is the ideal choice.

Problems to watch out for:

Timing chain noise, neglected services on ex-fleet cars, clocking before the first MOT.

Pros

  • BMW interior, tech
  • Good handling
  • Distinctive style

Cons

  • Firm ride
  • Some quality issues
  • Diesel longevity
Fuel type Diesel
ULEZ compliant Yes
Typical insurance group 11 - 24

Mercedes-Benz GLA 200 CDI (200 d)

Trendy upmarket small SUV, budget-friendly VED

Price: From £10,500
On the road since 2013, the high-rise Mercedes-Benz GLA-Class limbos into the £20 tax bracket. With a reputation for high build quality and refinement, plus environmentally friendly engineering, the GLA is a compact SUV that wins on points for families – though the rather dowdy B-Class MPV is more practical.

Check the VED rates for the Mercedes GLA range and you'll see most specifications of 200 CDI and early 200 d facelifted models are in band B, so there's plenty of scope for finding a specification and trim level that suits you.

Find a used Mercedes GLA for sale near you

Problems to watch out for:

It's one of the early generations of Euro 6 Mercedes, so issues with the NOx sensors and AdBlue (where fitted) are common. On later cars this can result in the inability to start if you ignore the warnings.

Pros

  • Premium image
  • Generous specification
  • Not too big

Cons

  • Patchy quality
  • Emissions system bugs
  • B-Class is more practical
Fuel type Diesel
ULEZ compliant Yes
Typical insurance group 19-42

Toyota Aygo (Citroen C1, Peugeot 107)

The 'Citybug' trio bring '60s simplicity in a modern car

Price: From £1,500
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, nearly all of the engineering on the petrol model comes from tried and tested Toyota and Daihatsu models, tuned for European tastes.

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.

Search used Toyota Aygo cars for sale

Problems to watch out for:

These are simple cars, but because they're very affordable they don't always get the best maintenance. Check for bodged repairs, rust (particularly around rear axle and mounts), and look for a smooth, smoke-free engine with clean oil. Automatic models use an automated manual that is economical but unreliable.

Pros

  • Reliable engine
  • Spacious for size
  • Very low costs

Cons

  • Motorway refinement
  • Plasticky trim
  • Small boot
Fuel type Petrol
ULEZ compliant Yes
Typical insurance group 2-4

Peugeot 3008 Mk1

Distinctive, spacious MPV is cheap to buy and run

Price: From £2,750
The original Peugeot 3008 was For a car the size of the Peugeot 3008, the frugality of its tax, purchase price and emissions is striking. A bizarre combination of a normal hatchback, off-roader and people carrier, the mix works surprisingly well and delivers a roomy, reliable ride. We particularly like the split tailgate that proves especially versatile for pet-loving families. 

Find a used Peugeot 3008 for sale near you

Unfortunately for city-dwellers, the band B Peugeot 3008 is diesel powered – though you may find some2014-on diesels that are ULEZ compliant, so it's always worth checking the TfL website to verify a specific car. The cheapest VED petrol model is the 1.2 Puretech in band C.

Problems to watch out for:

Most of the low road tax models are the 1.6-litre HDi which is prone to leaking injectors and should have the DPF (diesel particulate filter) changed at 75,000 miles. Many owners ignore or bypass it, causing more problems at higher mileage. The 1.2-litre petrol is an early example of the wet-belt Puretech and can suffer from swollen timing belts, debris in the oil pickup and brake booster, and related issues.

Pros

  • Very spacious
  • Clever boot space
  • High driving position

Cons

  • Peugeot parts availability
  • Neglected diesels
  • Flawed early 1.2-litre petrol
Fuel type Diesel
ULEZ compliant from around 2014
Typical insurance group 14-31

Kia Rio 1.25 ISG (2011-2017)

Generously sized budget hatchback is just grand(e)

Price: From £2,500
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 Kia 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.

Find a used Kia Rio for sale near you

If you want a ULEZ friendly one on a budget, look for the 1.25-litre ISG - it offers the cheapest petrol Kia Rio road tax. Likewise if you want free road tax (for now) the 1.1 CRDi is in band A and also very frugal, if a little slow.

Problems to watch for:

Mostly dents and damage – these cars had a generous warranty and owners were generally good at service history, but their low cost and urban appeal means they often bear the brunt of careless parking and unsympathetic road users. Clutches and gearboxes also wear relatively quickly.

Pros

  • Family-sized supermini
  • Kia build quality
  • 1.4 CRDi unstressed

Cons

  • Small engines
  • Built to a price
  • Not always cherished
Fuel type Petrol
ULEZ compliant Yes
Typical insurance group 8

Hyundai i10 (2014-2017)

Reliable, economical and well-equipped i10 is hard to beat

Price: From £6,000
With exemplary build quality, decent kit and value-for-money deals, Hyundai is now one of the most popular brands on UK roads. The 2014-2020 Hyundai i10 offers a spacious cabin and refined drive for a small car. What it lacks in excitement, it makes up for in cheap running costs (provided you don’t opt for the thirsty automatic).

Find a used Hyundai i10 for sale

Hyundai i10 VED rates can go as high as band F for the robust, old-school automatic – but most 1.0 models are band B with a couple of band A versions as well.

Problems to watch out for:

Neglect, mostly. The Hyundai i10 is a well-made, carefully specified car that ages well.

Pros

  • Reliability
  • Well-packaged
  • Quite sharp looks

Cons

  • Still expensive
  • Poor motorway refinement
  • Thirsty automatic
Fuel type Petrol
ULEZ compliant Yes
Typical insurance group 1-7

Skoda Citigo

Sensible Skoda with sensible road tax as well

Price: From £3,000
The most obviously badge-engineered Skoda benefits from the need to meet the expectations of Volkswagen and Seat buyers, but for fans of the Skoda Citigo it's closer to being the premium sibling to the youthful VW Up and sporty Seat Mii, thanks to a mature, upmarket grille and trim treatment. A super-compact four-seater, it's closer in character to 1980s superminis, but up to modern standards of safety and reliability.

Nearly all pre-April 2017 Skoda Citigo VED rates are band B, with a couple of band A options if you want to pay no road tax at all – there's also a rare electric version, equivalent to the VW e-Up and Seat Mii Electric.

Find a used Skoda Citigo for sale near you

Boot space is better suited to a weekly shop than a grand tour, but the seats fold for a surprisingly useful boxy load space, and for driving in cities the agile handling and excellent visibility means no gap or parking space is denied.

Problems to watch out for:

Generally the Citigo is a robust and reliable car that will outlast most contemporary rivals, but the clutch wears quite quickly. The automatic option is an automated manual gearbox and best avoided – if you want a two-pedal Citigo, the Citigo iV/Citigo-e electric car is better.

Pros

  • Well made
  • Robust interior
  • Cheap insurance

Cons

  • Flawed automatic
  • Basic infotainment
  • AEB optional
Fuel type Petrol
ULEZ compliant Yes
Typical insurance group 1-4

Is buying a used low CO2 car really saving money?

If you’re looking at the overall cost of your car then generally, the low CO2 models are also the most economical and often the cheapest to insure. Wear and tear on a used car does mean extra costs for maintenance, but replacing all tyres, suspension bushes and even a clutch or DPF is unlikely to cost as much as a deposit and first year payments, or depreciation, on a new car.

The pitfall for clean-air zones and ULEZ is that many of the cheapest Band A or B used cars are diesel. Unless they meet Euro 6 standards they will incur a charge and may even be banned at certain times in the future. There are more petrol options if you choose Band B and look at smaller engines.