Cars with low tax and insurance
Learn how you can cut running costs by choosing low tax and insurance cars
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Picking a car with low road tax and insurance is an easy way to keep running costs low while you’re on the road.
The cost of just about everything is on the rise, so cutting down bills like road tax and car insurance can help your budget stay on track.
But what cars are cheap to tax and insure? Take a look at some of the best cars for low tax and insurance.
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Best cars for low road tax and insurance
Ford Fiesta
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Annual road tax: £190 (2017 onwards)
Lowest car insurance group: 3 (models registered before 1 August 2024)
A used Ford Fiesta will suit you well if you’re on the market for cars with low road tax and insurance, and want something with a reliable rep.
As one of the bestselling cars in the UK, the Fiesta has a foolproof hatchback formula that’s comfortable, easy to drive, and just as easy on the eye.
It’s frugal on fuel, too. The petrol 1.0-litre EcoBoost can get up to 56.5mpg, with low CO2 emissions of 114g/km.
Read our Ford Fiesta review
Skoda Fabia
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Annual road tax: £190 (2017 onwards)
Lowest car insurance group: 1 (models registered before 1 August 2024)
The Skoda Fabia is a small hatch that’ll have your back. It’s solidly built and reliable, with a comfortable interior and styling that has shades of Audi A1.
Not only is the Fabia easy on tax and insurance costs, but it'll return up to 55.5mpg if you go for the manual.
There’s a spacious 330-litre boot – going up to 1,150 litres with the rear seats down – so it’s practical as well as economical.
Read our Skoda Fabia review
Best small car low tax and insurance
SEAT Mii
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Annual road tax: £190 (2017 onwards)
Lowest car insurance group: 1 (models registered before 1 August 2024)
The SEAT Mii is a perfect little city-mobile if you’re after low tax and insurance cars that are quirky and fun to tootle around in.
Sibling of the Volkswagen Up! and Skoda Citigo, the Mii is usually thought of as the mid-point between the three in terms of value for money.
It’s cheap to tax and insure, and the 1.0-litre engine sips fuel to get a brilliant 62.8mpg.
This writer has been living with a SEAT Mii for the past two years, and it’s proven itself to be a charming and economical companion.
Read our SEAT Mii review
Toyota Aygo
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Annual road tax: £190 (2017 onwards)
Lowest car insurance group: 2 (models registered before 1 August 2024)
Another brilliant small car with low tax and insurance, the Toyota Aygo is a groovy little city car with plenty to offer.
Claiming around 57mpg, the Aygo is easy on the fuel.
Automatics are easier to drive but the manuals drink less fuel – you can’t go wrong either way.
Our motoring editor, Sam Sheehan, says: “The Aygo’s tiny dimensions make it easy to park in town, while five-door examples mean that those in the front seats won’t have to climb out every time someone wants to get in the back.”
Read our Toyota Aygo review
Best SUVs with low tax and insurance
Nissan Qashqai
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Annual road tax: £190 (2017 onwards)
Lowest car insurance group: 11 (models registered before 1 August 2024)
The Nissan Qashqai is one of the bestselling SUVs in the UK – and for good reason.
On top of being one of the best cars with low road tax and insurance, it’s a solid and reliable family car with a five-star Euro NCAP rating.
It’s sizeable with a 504-litre boot, and still manages 45.5mpg from the 1.3-litre mild hybrid.
We love the solid and functional interior – supportive seats, a large infotainment screen, and a heads-up display in the top-spec models.
Read our Nissan Qashqai review
Kia Sportage
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Annual road tax: £190 (2017 onwards)
Lowest car insurance group: 15 (models registered before 1 August 2024)
The well-loved Kia Sportage fits perfectly into our list of cracking low tax and insurance cars.
Each engine is efficient, with hybrid and plug-in hybrids on offer. If you’re loyal to pure fuel power, you can get up to 44.1mpg from the 1.6-litre petrol.
The plug-in hybrid gives you 43 miles of electric range and up to 252mpg combined based on generous official stats, but can be more expensive to tax if you spend over £40,000.
A standard hybrid costing less than £40,000 will still get you the hybrid road tax discount.
Read our Kia Sportage review
Cars with no tax and low insurance
smart EQ forfour
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Annual road tax: £0 until 2025 (from £10 after)
Lowest car insurance group: 9 (models registered before 1 August 2024)
Choosing an electric car will mean you’ll get free road tax until April 2025, and the smart EQ forfour is also cheap to insure.
It’s punchy yet practical, easily zipping around city centres but still offering a surprisingly spacious interior for such a dinky vehicle.
With a smaller range of 81 miles per full charge, the EQ forfour is suited for short commutes and city driving.
Read our smart forfour review
Renault Zoe
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Annual road tax: £0 (from £10 after)
Lowest car insurance group: 14 (models registered before 1 August 2024)
Another peppy electric car with free road tax until 2025, the Renault Zoe is a five-door supermini that’s one of the most popular in the UK.
The Zoe offers an impressive 239 miles of range on a single charge, so it’s better suited to long trips than the EQ ForFour.
Go from empty to full charge in eight hours using a 7kW charger, and you can rapid charge in a pinch.
Read our Renault Zoe review
What affects road tax prices?
Road tax for cars registered after April 2017 is based on emissions and fuel type.
Brand new cars pay ‘showroom tax’ in the first year instead of the typical car band-based car tax. This fee is based on the car’s emissions.
After that, tax is based on the three different bands that your car could be placed in – premium, standard and zero.
Zero band vehicles create zero emissions so don’t have to pay road tax until 2025. After this, it’ll be £10 a year.
A petrol or diesel car in the standard band will typically cost £190 per year to tax, with a £10 discount for hybrid models.
Cars that cost over £40,000 when brand-new have to pay a £410 ‘premium fee’ for the first five years on top of their normal rate.
That means you could pay £600 a year for more expensive vehicles.
What affects car insurance prices?
Car insurance costs are influenced by individual things like your age, driving history (including any driving convictions), your annual mileage, and where you store your car.
New drivers or those with previous insurance claims might find their bill to be higher.
The type of car will also influence insurance costs.
Vehicles are placed into car insurance groups that influence the cost. These range from one to 50, with the lower numbers being cheaper to insure.
Insurance groups are based on the price of the car, the cost of potential repairs, vehicle safety, security, and performance.
If your car was registered after 1 August 2024, you'll instead have 'Vehicle Risk Ratings' determine your car insurance costs. This is the newer system and considers things like your car's desirability, safety and performance.
Why choose low tax and insurance cars
Choosing a low tax and insurance car is a reliable way to keep running costs low.
Thinking about tax and insurance when you choose your next car means you’ll be able to dodge the priciest models to run and maintain.
Cars with low insurance are usually cheaper to maintain, and those with low road tax are often more fuel efficient.
Take a look at our full range of used cars to find more cars with low road tax and insurance.