Drivers eligible to reclaim thousands in tax rebate after selling their car

The vehicle leasing company Leasecar.uk has advised drivers to see if they are eligible for a tax rebate if they have recently sold a car. 

During 2022, seven million used cars were sold in the UK, with some sellers being unaware that they were able to reclaim hundreds of pounds.

Tim Alcock from LeaseCar.uk outlined who is able to apply for the rebate and when they should do it.

He explained: “If you’ve paid your road tax for a whole year yet sell the car after a couple of months – you will be eligible to receive most of the tax back into your bank account.

“It’s important to note that the DVLA tax refund only applies for full months, so it’s best to apply for your refund straight away to avoid missing out on any cash.”

Since 2017, all buyers of used cars are required to tax their vehicle as soon as possible, with any withstanding tax purchased by the seller being invalid.

LeaseCar noted that used vehicle prices have continued to increase, following the boom in the market during the Covid-19 pandemic, with the average price of a pre-owned car in the UK being £17,756 during June 2023.

As a result, many motorists who are upgrading their car are looking into ways to save money, particularly during the cost-of-living crisis.

Tim explained what drivers need to do after selling their car if they want a rebate on their tax.

He said: “After selling your car, drivers should inform the DVLA as soon as possible to ensure they get as much money back as possible.

“Also ensure to tell the DVLA that you’ve sold your car and provide the full name and address of the buyer. Failing to do so may also stop you from getting any money back.”

The Driver and Vehicle Licensing Agency requires all vehicles under 40 to be taxed, with renewals every six or 12 months.

Under current legislation, prices vary depending on how much carbon dioxide vehicles produce, with zero-emission vehicles (ZEVs) currently free to tax and the most polluting vehicles costing £2,605 per year.

If a police officer spots a motorist driving a vehicle that is not taxed, they could be faced with a fine of £80, or up to £1,000 if they are taken to court.