DVLA changes for millions leave drivers confused

According to new research from online car marketplace Carwow, changes to Vehicle Excise Duty (VED) set to take effect from April 1, 2025 have left millions of UK drivers feeling uncertain and ill-informed.

Despite the extensive reforms - which will impact all UK motorists, including those who own petrol, diesel, hybrid, and electric vehicles - nearly six in ten (62%) respondents confessed they did not fully comprehend the changes, while almost two-thirds (64%) are unsure whether their own car tax has actually risen.

The revised VED system has introduced a flat £195 annual rate for most vehicles and abolished the longstanding exemption for electric vehicles (EVs). Many newly registered EVs are now also subject to the Expensive Car Supplement, which applies to vehicles priced over £40,000 - a threshold that affects approximately 70% of new EVs.

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However, more than half (53%) of UK motorists admit they still don't know how much the changes will cost them in monetary terms, highlighting a worrying lack of clarity around one of the most fundamental costs of car ownership, according to Carwow.

Carwow's study also discovered that more than half (52%) of UK motorists believe the government should be doing more to support consumers' transition towards EVs – such as offering incentives and tax reliefs where possible, reports .

Despite this, the majority of respondents (58%) still believe the changes to VED, which now involve taxing EV owners, would not deter them from going electric in the future.

The head of editorial at Carwow, Iain Reid, outlined upcoming adjustments to car tax rates set to take effect in the coming year, noting: "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."

He continued to explain the implications of the new Vehicle Excise Duty (VED): "From April 1, 2025, the VED system changed significantly. Fully electric vehicles are no longer exempt - with new EVs paying a first-year rate of just £10, followed by a flat standard rate of £195. EVs registered between April 2017 and March 2025 now also pay the full standard rate per year."

Reid also highlighted additional costs for owners of pricier EVs: "On top of this, the Expensive Car Supplement now applies to EVs for the first time - so if your car costs over £40,000, you're paying an additional £425 per year for five years, meaning an annual road tax bill of £620 from your second year of ownership. Most hybrids have also lost their previous VED discount, and petrol and diesel VED rates have increased in line with inflation."

And finally, he summed up the complexity added by these changes: "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. On Carwow, in April we saw EV enquiries up 75% year-on-year. This suggests the public's interest for greener options is still there, but more must be done to help drivers feel confident, informed, and ready to make the switch. ".

Amid growing environmental concerns, it's heartening to see electric vehicle (EV) enthusiasm remains unshaken, with Carwow witnessing a staggering 75% boost in EV enquiries compared to last year. But despite this green surge, there's a strong call for action to ensure that drivers are equipped with the confidence and knowledge required for a seamless transition to cleaner travel.

To bolster a smoother shift for motorists into the EV era, Carwow has set forth its 'Future of Motoring Manifesto', an ambitious 10-point blueprint tailored to accelerate the uptake of EVs and strengthen motorists' confidence on the roads.