All cars, motorcycles and light commercial vehicles are subject to a vehicle road tax (Vehicle Excise Duty or Road Fund Licence).

Please note that smaller bands are being introduced for cars and vans from April 2009 following the 2008 Budget and are still based on the CO2 (g/km) output of the vehicle.

Vehicle Excise Duty is normally included in your contract hire arrangement, however always check this with the contract hire company.

The new Vehicle Excise Duty bands and rates from April 2009 are given in the table below.

There is a first year rate for new cars from April 1, 2010, with higher rates for the most polluting cars.

For the cars emitting 130g of CO2 per km or less, the rate during the first year of ownership is zero.

For new cars that emit between 131 and 160 g CO2 per km, the rate for the first year of ownership will be the same as the standard rate.

Small changes in CO2 will now have a bigger effect on the Vehicle Excise Duty and the contract hire company will factor this into their rental calculations.

Choosing a less polluting vehicle will help the environment and should save you money, by paying less for your contract hire rental.

Current rates:

*Alternative fuel discount: A-E £20, F-G £15
** Includes cars emitting over 225g/km registered between 1 March 2001 and 23 March 2006

Vehicle Excise Duty for cars registered on or after March 1, 2001: 2009-10 and 2010-11 standard rates:

 *Alternative fuel discount: 2009-10, A-I £20, J-M £15; 2010-11 onwards, £10 all cars
**Includes cars emitting over 225g/km registered between March 1, 2001 and March 23, 2006

Vehicle Excise Duty for brand new cars: 2010-11 first-year rates