Isobel Coughlan

Content Writer

Alastair Shephard

From 1 April 2026, some UK drivers will see an increase in Vehicle Excise Duty (VED), commonly known as road tax. 

The hike mainly affects high-emission petrol and diesel vehicles, as well as certain luxury and performance models.

Not all cars are affected. Most everyday cars will see smaller changes, while electric vehicles face updated fees for the first year.

Vehicle tax is based on CO₂ emissions, fuel type, and the vehicle’s list price.

Thinking about buying an EV? Electric cars will pay a flat first-year VED of £10. 

Cars costing over £50,000 (EVs) or £40,000 (petrol/diesel) are subject to the expensive car supplement of £425 per year for five years from year two of registration.

Cars most affected by tax changes in 2026

59 models fall into the highest VED band (over 255g/km CO₂). These are set to be hit with a £5,690 charge in the first year of ownership.

The vehicles that are mainly affected are luxury SUVs and performance cars, such as the following examples.

Owners of these cars will see a significant first-year VED increase. Standard annual rates apply from year two, unless the vehicle is over the luxury threshold.

See how the changes compare to 2025’s data.

Electric cars are no longer fully exempt from VED. Here’s a quick breakdown of what you’ll have to pay and when.

A new pay-per-mile scheme is expected in 2028, though nothing is confirmed yet.

Drivers will pay 3p per mile for EVs and 1.5p per mile for plug-in hybrids. Further guidance on administration and mileage reporting will be published closer to the rollout.

How car tax rises in 2026 will affect UK drivers

The 2026 car tax increase will hit owners of high-emission and luxury vehicles the hardest. 

To see how much you’ll pay, check your car’s CO₂ emissions and its list price, and remember that cars with powerful engines or high emissions will face higher first-year VED, while everyday models will see smaller increases. 

Choosing a more efficient petrol or diesel car (or an electric vehicle) can help reduce these costs. 

Planning ahead ensures you won’t be caught out by higher charges in April!

Knowing your car tax band can help you estimate prices.

Cars registered from 1 April 2017 pay a flat annual rate, with an extra luxury car tax for vehicles costing over £40,000 (£50,000 for electric cars). 

Older cars, registered between 1 March 2001 and 31 March 2017, are taxed according to CO₂ bands. Simply, the cleaner your car emissions-wise, the lower the tax. 

To check your band, you’ll need your car’s registration year, fuel type, and CO₂ emissions, which you can find in your V5C logbook. Or you can use the

Fuel costs will also change gradually in 2026. 

The 5p-per-litre fuel duty freeze runs until 31 August, after which it rises by 1p in September, 2p in December, and another 2p in March 2027. 

Petrol stations must now report price changes within 30 minutes via the new Fuel Finder scheme, helping curb sudden spikes. 

Drivers could save 1 to 6p per litre by closely monitoring prices.

If you use an electric company car, your Benefit-in-Kind (BiK) tax will rise slightly in 2026. 

From 6 April, BiK rates will increase from 3% to 4%, affecting both employees and employers. 

While still lower than petrol or diesel alternatives, it’s worth factoring this change into tax planning for EVs provided through your workplace.

London’s daily congestion charge is now £18. Electric vehicles are no longer fully exempt, but Auto Pay users receive a 25% discount, reducing the fee to £13.50. 

If you drive in the city regularly, this update could affect your daily commuting costs. Budgeting for these charges as early as possible ensures the new rules do not catch you out!

Other regulatory and tech updates to expect in 2026

2026 brings several updates for drivers, such as:

Staying informed on these changes helps drivers remain compliant and take advantage of new technologies. If anything else occurs, you’ll find the latest information on the Bumper blog.

The April 2026 VED changes continue the UK’s focus on reducing emissions through higher cost penalties.

High-emission petrol and diesel cars face higher first-year charges, while electric vehicles now contribute to road tax for the first time. So, it's a great time to prepare and even consider a more eco-friendly car.

Read more about owning a vehicle in the UK on the Bumper blog.

Staying informed can help you budget effectively and choose vehicles that minimise road tax costs. 

 to split the cost of last-minute repairs into interest-free instalments with Bumper. 

Apply online for up to £5,000 and choose from 1,000s of trusted repairers.

Car Tax Rises in 2026: What to Expect

The government has started trialling new digital driving licenses with the Government Digital Services (GDS) and DVLA. 

Currently being tested internally with small numbers of GDS and DVLA staff, the trial could see the rollout of a digital license in the GOV.UK One Login app later in 2026. 

The digital license will contain the same information as your license – name, photo, license number, date of birth, address, expiry date and driving entitlements. Physical cards will remain valid for drivers who choose them until at least 2030. 

The trial is part of a broader ‘GOV.UK Wallet initiative’, aimed at making all identity documents digital. 

Science Secretary, Peter Kyle, said the digital wallet “opens huge opportunities to make interacting with public services much easier by putting people in control of their own data.” 

New tech like the digital wallet is expected to save £45 billion in efficiency savings, according to a government report. 

Government’s new digital driving licence could save billions 

58 classic and once-popular cars have been identified as likely to disappear from roads by 2030. 

Temporary vehicle insurance provider, Tempcover, analysed 10 years of DVLA registration data to estimate how quickly the numbers of specific models are declining. 

The analysis then forecasted an “extinction date” when registrations could hit zero, and the models completely disappear. 

As vehicles age, they become more expensive for drivers to repair and harder to source new parts, leading many to swap their current models for new ones.  

A shift to newer tech like electric vehicles and stricter emissions standards for drivers have also contributed to these models vanishing from our roads. 

Declining numbers could mean certain models are bought by collectors as “future classics”, increasing their value.  

Did any of your favourite models appear on the list? If so, you better snap them up before they disappear forever. 

Full list of cars expected to go ‘extinct’ by 2030

A new rule from the government affecting petrol stations has come into force this month. The change is aimed at making fuel prices more transparent for drivers. 

As part of the Fuel Finder Scheme, petrol stations are now legally required to report fuel prices in near real-time to a central database. 

Prices must be updated within 30 minutes of a change at the pump. This data will then feed into apps, comparison websites and mapping tools, enabling drivers to find the cheapest prices.

The change should make it easier for drivers to compare fuel prices before filling up. Government estimates anticipate vehicle owners could save up to £4.50 per tank. 

Chancellor Rachel Reeves said the scheme could help the average household save around £40 per year. 

Real-time prices will be accessible on third-party services like PetrolPrices.com and Fuel Finder UK. 

The scheme may also eventually integrate directly with sat-navs and map apps, making it even easier for drivers to make savings. 

All petrol stations are required to register and participate, including independent retailers and major chains. 

Sales between businesses, fuel sold in jerry cans, red diesel intended for agricultural purposes, and HGV depots operating under pre-arranged logistics agreements are not covered by the scheme. 

New rule for petrol stations could save drivers £4.50 per tank 

Listers Group has signed a new multi-year agreement with Bumper across its 55 UK sites. The deal will see Listers extend its use of Bumper’s industry-leading Buy Now, Pay Later (BNPL) service, PayLater. 

The renewal is an extension of a longstanding relationship between Listers and Bumper, with the two partnering to offer BNPL payment options to Listers’ customers since 2018. 

PayLater is Bumper’s Buy Now, Pay Later (BNPL) service that enables customers to spread the cost of vehicle repairs and servicing over interest-free instalments – improving satisfaction and helping customers authorise important work. 

Caroline Woodcraft, Group Retail Operations Director at Listers Group, said, “We’re pleased to renew our partnership with Bumper and continue offering PayLater across all our sites. Providing customers with flexible payment options has become an important part of our sales and aftersales experience, as we look to ensure our customers have a seamless, stress-free experience. Our partnership with Bumper means we can support more customers in getting the work they need done, without delay.” 

Daniel Christie, Head of Sales at Bumper, said: “We’re proud to extend our partnership with Listers Group. Their continued trust in Bumper reflects the growing importance of flexible payment solutions. Together, we’re helping more drivers access the repairs and servicing they need.” 

The deal comes as Bumper continues to expand its dealership payment solutions, recently launching Bumper Pro – the UK’s first all-in-one payment orchestration platform built specifically for the automotive sector. 

Listers Group signs deal with Bumper to extend Buy Now, Pay Later services 

Sheffield-based fintech Bumper has today relaunched its city-centre HQ offices following an extensive renovation. The new space will seat up to 60 colleagues, enabling Bumper to continue to invest in local jobs as part of its ambitious growth plans.

Bumper, which provides a suite of payment options for car repairs, has expanded its HQ office space to accommodate rapid growth in the business. The company has hired 20 team members over the past two years. The business expects to invest over £30m in Sheffield on salaries alone over the next five years and provide another 100 jobs locally.

The newly renovated space doubles the footprint of Bumper’s original office, featuring four meeting rooms, two kitchens, call booths and team break-out spaces, alongside access to gym and café facilities in the building.

Bumper is a notable Sheffield tech success story, having been named amongst the FT1000 fastest growing fintech businesses in Europe for the past five years.

Last week, the company was named amongst the top companies to work for in four categories at the Best Companies Awards 2025. Bumper was recognised as number 13 in the Best Companies to Work For in Yorkshire & The Humber, and was named in the top 20 Best Small Companies to Work For in the UK. 

James Jackson, CEO at Bumper, commented: “We’re delighted to celebrate our growth in Sheffield with the relaunch of our city centre headquarters. Our ambition is to become Yorkshire’s first fintech unicorn, and this vibrant city is at the heart of that journey.

“By expanding our home in Sheffield, we’re creating even more opportunities for exceptional local talent to thrive. We are proud to be recognised as one of the best companies to work for – both regionally and nationally – and we look forward to continuing to invest in our growing team at our Northern HQ.”

Bumper invests in Sheffield city centre with office expansion 

Bumper invierte en el centro de Sheffield con la ampliación de sus oficinas

Bumper has today announced a series of dealership groups now live on Bumper Pro, the UK’s first payments orchestration platform built for automotive, including Riverside Motor Group.

Amongst the first dealerships to go live on Bumper Pro, Riverside has rolled out the platform across its nine sites in northern England. Since its initial installation in July, Bumper Pro has already saved Riverside over £43,800 in costs, principally in card processing fees – the equivalent of over £100,000 annually.

The motor group joins a number of dealerships up and down the country going live with Bumper Pro, including Eastbourne Motoring Co; Northern Ireland-based Browne & Day Ford; Westdrive Kia & Mazda; Broad Oak Motor Group; and Shelly Motors Kia. All have integrated Bumper Pro with the Pinewood.AI dealer management system.

The Bumper Pro platform enables dealerships to combine in-store and online payments into a single platform, simplifying payment management and lowering costs. 

It opens up new ways for customers to pay, with access to Bumper’s full suite of payments services – from PayLater to Pay by Bank, Pay by Card, and Bumper’s innovative payment terminal, PayPad.

Bumper Pro also gives dealerships the opportunity to save thousands in transaction fees with intelligent payment routing, which presents customers with a preferred payment method - optimised to balance an enhanced customer experience with the retailer's available payment channels.

The platform automatically reconciles payments in Keyloop and Pinewood.AI, to reduce manual workload.

Andrew Jackson, Operations Director at Riverside Motor Group

, said: “Bumper Pro has had a major impact on our operational efficiency, whilst driving huge savings across our dealerships. Automatically reconciled payments within Pinewood saves our team heaps of time, completely eliminating what was a previously laborious process.

“Pro has also had a positive impact on our customers. With every payment option connected seamlessly through our Bumper account, DMS and the Bumper PayPads, our drivers are given the ultimate flexible payment experience consumers have come to expect.”

, said: “We are excited to welcome Riverside alongside such a wide range of UK dealerships to the Bumper Pro platform. We built Bumper Pro to streamline dealerships’ payments systems and we’re thrilled with the impact we are already having on our partners’ businesses, simplifying payments and lowering costs for dealerships at a time when operational efficiency is critical.”

Riverside rolls out Bumper Pro platform and sees substantial savings

Bumper International Limited, the automotive payments orchestration platform and leading provider of interest-free car repair financing, is now authorised and regulated by the Financial Conduct Authority (FCA) with permissions for consumer credit lending in the UK.

The authorisation represents a major milestone for Bumper as it expands its mission to make car ownership more flexible and affordable, enabling the development of longer-term credit products to complement its flagship Buy Now, Pay Later (BNPL) product.

Building on its new permissions, Bumper’s PayLater offering will be joined by PayLonger, which will allow customers to spread larger car repair bills over a longer period.

The announcement also comes at a pivotal time as the UK BNPL industry moves towards formal regulation, positioning Bumper ahead of the upcoming sector-wide requirements.

James Jackson, CEO at Bumper, said: “Securing FCA authorisation not only reinforces our commitment to responsible lending and consumer protection, but unlocks exciting new opportunities for Bumper – particularly the ability to develop longer-term credit products that offer greater flexibility and affordability for customers facing substantial repair bills.

“This is a milestone moment for Bumper as we look to launch our PayLonger product, continuing to accelerate our growth and empowering our dealership partners to deliver even better support to their customers.”

Bumper Secures FCA Authorisation for Consumer Credit Lending

Industry news and key updates affecting drivers and dealers.

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