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Car Leasing Road Tax

When you lease a vehicle the rules regarding road fund licence or road tax or vehicle excised duty will vary.

With the most popular forms of new car leasing Contract Hire and Personal Contract Hire road tax is included for the full lease term.

With an Operating lease or a Personal Contract Purchase (PCP) tax is included for the first year, therefore it is your responsibility after this period. You pay the road tax up until the vehicle is purchased or collected and the lease terminated.

If you have a lease where the road tax is included for the full lease term – you do not need to arrange anything. The funder will do this for you annually. The only time you might have to make a payment is if the government increases the cost of road tax. Unexpected tax increases are not considered when the lease is originally priced. If the cost of tax increases by £5 per annum you would be responsible for paying this unexpected amount.

Road tax is not included in the sale of used cars. The road tax is paid by the person or company leasing a used vehicle at the point of sale.

You must tax the vehicle before it can be legally driven the roads, failure to do so can result in penalty points and fines.

The road tax goes towards the cost of maintaining our roads….. among other things.

If you have any questions concerning road fund licence please do not hesitate to contact us.

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6th of March 2020