Small cars with low road tax
Take a look at some of the best small cars with low road tax
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Explore smaller cars with cheap road tax
Shopping for small cars with low road tax leads you to plenty of options – but which ones are worth buying?
If you want to save money on running costs by keeping road tax low, there are a host of small cars that can help you stick to a budget.
To help you choose, here’s a look at our favourite small cars with low road tax.
Electric cars to pay road tax from April 2025
Drivers of electric vehicles (EVs) will have to pay road tax (also known as Vehicle Excise Duty) from 1 April 2025 for the first time.
Here’s how it’ll work:
EVs registered from 1 April 2025 onwards – £10 for the first year, £195 each year after that (standard rate)
EVs registered between 1 April 2017 and 31 March 2025 – £195 each year (standard rate)
EVs registered between 1 March 2001 and 31 March 2017 – £20 each year
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Best small cars with low road tax
Renault Clio
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Annual road tax: £350 in year one, £195 annually thereafter
The Renault Clio is a gem among small cars with low road tax that deserves more hype. Not only is it cheap to run, but it’s great value and has a premium feel.
With a hybrid option now on offer, fuel efficiency is better than ever. The 1.6-litre hybrid gets up to 65.7mpg.
The refined little Clio was awarded a full five-star Euro NCAP safety rating in 2019, and then it only went on to win cinch's Hatchback of the Year award two years on the trot, in 2024 and 2025.
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Dacia Sandero
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Annual road tax: £440 in year one, £195 annually thereafter
The Dacia Sandero should be your top pick if you want a small car at a seriously good price point. You simply can’t beat its value for money.
Road tax is low and car insurance should be, too – with models registered before 1 August 2024 sitting in insurance groups three to 14.
There are a couple of engine options, and the most efficient is the manual petrol that gets up to 53.3mpg.
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Fiat 500e
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Annual road tax: £10 in year one, £195 annually thereafter
The Fiat 500e is quite possibly one of the best options. You get all that’s cute and lovable about the original 500, just with battery power.
With a handy range of up to 199 miles on a single charge, it’s ideal for your daily commute or casual tootles around the city.
It’s a stunning car, as well. We particularly love the unique colourways – the Rose Gold and Ocean Green are gorgeous.
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Hyundai i10
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Annual road tax: £440 in year one, £195 annually thereafter
For a reliable small car with low road tax, what about a Hyundai i10? The 1.0-litre petrol is ideal for city driving and is efficient to run.
In fact, you can expect up to 64.4mpg from the most efficient petrol, and we even got around the 50mpg mark from the turbocharged engine in the N Line version.
Insurance costs shouldn’t hold you back, either. The i10 sits in groups four to 10 for models registered before 1 August 2024, and there's generally not a big difference between entry-level and mid-spec versions.
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Peugeot e-208
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Annual road tax: £10 in year one, £195 annually thereafter
Another slick electric option with free road tax, the Peugeot e-208 is worth looking at if you don’t want something that screams ‘electric power’.
This undercover electric car is modern without looking over-the-top futuristic, but still does its job of achieving up to 268 miles on a single full charge.
There’s plenty of interior tech as well, including a seven-inch touchscreen unit with Apple CarPlay and Android Auto as standard.
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Toyota Yaris Hybrid (2020 onwards)
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Annual road tax: £350 in year one, £195 annually thereafter
Want to dip your toe into electric power but aren't ready to fully commit? The Toyota Yaris Hybrid is a small car with low road tax that could be right up your street.
Supplementing the petrol engines with a hybrid power system allows you to achieve up to 70.6mpg from the 1.5-litre engines.
Even more impressively, the Yaris Hybris is self-charging with no need to be plugged in to boost. It saves you fuel and won’t add to your electricity bill.
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Benefits of choosing small cars with low road tax
Since April 2017, you pay road tax based on emissions when you buy a brand-new car for the first year. After that, it goes to the standard rate for that model.
The typical standard rate is £195 per year.
Cars that cost over £40,000 when brand-new come with an extra luxury car fee of £425 per year.
Most EVs registered after April 2025 will fall unto the luxury tax bracket above £50,000 from April 2026, giving you a bit more budget to play with before you have to fork out more for tax.
Choosing a small car with low road tax helps contribute to cheaper running costs, which is even more important as fuel costs seem to keep rising.
Low road tax usually means lower harmful emissions from your car, so you can also consider it as reducing your impact on the environment.
Other ways to save
Choosing a small car with low road tax is a good first step to reducing your car running costs, but there are a few other things to consider.
A small car that’s popular and widely available will usually mean that parts are easy to come by and maintenance won't be tricky.
This will make it cheaper and easier for you if something goes wrong with your car.
You might also want to look at car insurance groups. The closer to group one, the cheaper to insure.
Keep in mind that factors like driving history and annual mileage will still affect your premiums. It's all relative though, so a car in group one will still be cheaper to insure than one in group 50.
Efficiency – in terms of fuel economy and electric range – can also keep running costs low.
Look for electric cars that have a mile range to suit your driving habits or choose petrol or diesel cars that have a healthy miles per gallon figure.
Find the perfect used small car at cinch
There are so many impressive small cars with low road tax on the market – way too many to include here.
Take a look at our full range of used small cars to find your perfect fit.