Since 1 March 2001, vehicle excise duty (VED), commonly known as road tax or car tax, has been set on a sliding scale according to carbon dioxide (CO2) emissions.
The lower a car’s emissions, the lower the tax payable.
In short, if you buy a gas-guzzler you can expect to pay through the nose for it, whereas an eco-friendly vehicle will be significantly cheaper.
From April 2017, only vehicles with zero emissions pay zero VED in the first and subsequent years.
Cars not categorised at zero emissions, which is the majority of vehicles, have their VED calculated on the rate of their CO2 output.
After the first year, all motorists (except for owners of electric vehicles) face an annual flat fee of £140.