Blue Badge holders may be paying ‘100%’ more on car tax with £100s in savings possible

Blue Badge holders and disabled drivers could be owed hundreds of pounds in car tax savings, according to experts. Specialists have claimed that road users may be eligible for up to a 100% reduction in Vehicle Excise Duty (VED) fees in a major boost this autumn. VED is paid by almost every road user in the country, with hefty increases affecting road users back in April 2025.

However, those struggling with disabilities are among those eligible for exemptions meaning individuals don’t have to pay the fee. To top it off, motorists who qualify for exemptions will automatically receive refunds for any remaining months of vehicle tax in a double win for eligible road users. Almost all disabled drivers will qualify for a Blue Badge with over 3.2million holders in the UK.

Mike Thompson, chief operating officer at Leasing Options, explained that it was possible that “thousands of disabled motorists” are paying more than they need to.

Mike said: “When registering your vehicle tax, you may not realise you are eligible for a discount, however applying these discounts could save you hundreds of pounds over the coming years.”

“The Government website states that individuals with disabilities may be eligible for a vehicle tax exemption for one vehicle. To qualify, the vehicle must be registered either in the person with the eligible disability’s name or their nominated driver’s name, and it must be used solely for this person’s personal needs. It cannot be used by the nominated driver for their own personal use. You can apply for this exemption if you receive a select few benefits.”

Leasing Options explained that motorists on the higher rate mobility component of the Disability Living Allowance (DLA) or the enhanced rate mobility component of Personal Independence Payment (PIP) would likely be eligible for car tax reductions. Meanwhile, road users with a military background claiming the War Pensioners’ Mobility Supplement or the Armed Forces Independence Payment can also likely to enjoy savings.

Experts stress that individuals claiming the Enhanced rate mobility component of Adult Disability Payment (ADP) or the Scottish Adult Disability Living Allowance may also meet the criteria for savings. Parents with disabled children who are paid out the higher rate mobility component of Child Disability Payment are also liable for a reduction in charges.

Mike added: “Claiming an exemption is easy, it's done when you apply for your annual vehicle tax. If you are claiming for a vehicle for the first time, this will have to be done at a post office. You will also need to do this every time you change or upgrade your vehicle.”