Classic car owners overpaying road tax bills

Thousands of British drivers are still paying VED on their classic cars, according to new research.

Every 1 April, another year’s worth of retro vehicles gain historic status, meaning they are classified as exempt from VED. UK legislation treats any car that is more than 40 years old as a historic vehicle.

From 1 April 2026, all vehicles made before 1 January 1986 have gained this special status. However, eligibility for historic VED status is not granted to classic cars automatically. Instead, owners have to apply to the Driver and Vehicle Licensing Agency to have their vehicle reclassified as historic.

The need to manually apply to have a car reclassified means many drivers are unaware of the VED saving they could make. Research by Heritage Car Insurance found that 18,040 vehicles built in 1985, along with 5,869 made in 1984, are still recorded as being taxed.

Based upon the pre-2001 VED rates, this combined total of vehicles means there is a potential £9 million being paid unnecessarily. This includes up to £375 a year being paid by drivers of cars with engines larger than 1,549cc. Smaller-engined models are charged £230 annually.

Once a vehicle has been reclassified as exempt, owners still need to renew their car’s historic status each year, with nothing to be paid.

A quick trip to save hundreds each year is all it takes for classic car owners to stop paying unnecessary VED. They can do this by applying to the Driver and Vehicle Licensing Agency.

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Further analysis of data found that some examples of the 10 most popular cars from the 1980s are among those still registered to pay tax. This includes owners of the highly collectible Ford Escort RS Turbo paying VED unnecessarily, and drivers of the Austin Mini.

Mark Wilkinson, managing director at Heritage Car Insurance, said: “We were surprised by just how many owners of 1984 and 1985 cars are still being taxed as though their vehicles were brand new”. “The historic tax class exists precisely for cars like these, but it isn’t applied automatically, so if you don’t know to ask, you keep paying.

Given the sums involved, a five-minute trip to the Post Office could be one of the most valuable things a classic car owner does all year.

It’s likely that many of these owners are unaware of the potential savings, and a simple application to the DVLA could result in significant financial benefits. They could save hundreds of pounds each year.

The current system relies on owners taking the initiative to apply for historic VED status. As a result, many are missing out on potential savings.

The process for reclassifying vehicles as historic is relatively straightforward, but it requires owners to be proactive. For now, thousands of classic car owners will continue to pay VED unnecessarily, unless they take the steps to have their vehicles reclassified.

With the potential savings ranging from £230 to £375 per year, it’s an issue that affects not only the owners’ wallets but also their appreciation for their classic vehicles. The issue is significant, and it’s essential for owners to be aware of the potential savings.