‘Modern classics’ among those caught out by new 2025 car tax rule

Experts have warned that “modern classics” are among models affected by the new 2025 Vehicle Excise Duty (VED) car tax fees. Modern classic cars are among vehicles affected by the new 2025 car tax fees, with some motorists paying up to £700 per year to use the roads.

Classic cars registered over 40 years ago are exempt from paying road tax fees, but owners of vehicles considered "modern classics” of the future are not so lucky. Cars registered between 2001 and 2017 are legally liable to pay Vehicle Excise Duty (VED) to get behind the wheel. These rates are calculated based on total vehicle emissions, with more polluting petrol and diesel cars set to pay more.

Polluting cars emitting over 255g/km of CO2 are most affected with drivers facing bills of well over £700 per year. Motor experts at Hagerty have stressed road users could be affected by the charges, with the last set of updates being introduced back in April.

Hagerty explained: “For older cars, including modern classics registered between 1 March 2001 and 31 March 2017 the system is still based on emissions, and those emitting less than 100g/km will still pay nothing, while for everybody else there’s a £10 increase compared to 2024.

“That means owners of older cars emitting more than 255g/km of CO2 will pay £735 a year for the privilege of driving on Britain’s beautifully-maintained road network. Ahem.

“Cars registered before 1 March 2001, that were still younger than 40 years old on 1 January 2025, are charged based on engine capacity. That’s £210 a year for those under 1,549cc and £345 for anything above.”

A modern classic is generally defined as a vehicle from the 1980s, 1990s, or early 2000s that is still highly sought after by enthusiasts. Modern classics can also be models that have stood the test of time and continue to retain value years after hitting the road.

Examples of some modern classics built in the noughties include the Mazda MX-5, BMW Z4, the Vauxhall Corsa and the Ford Focus. Previous Parliament petitions have called for the VED historic tax exemption rules to be reduced, allowing more cars to benefit.

Last year, a poll demanding the exemption was extended to models just 20 years old was rejected despite securing 13,000 signatures. The previous Government said there were “no plans” to reduce the limit with officials stressing that the 40-year threshold was “fair”.