April 2026 will bring several car tax changes that could affect drivers across the UK. While the updates aren’t huge individually, they may influence buying behaviour, household budgets, and company car decisions – making them important for dealerships to understand when guiding customers and positioning stock.
Standard Road Tax Increase
From 1 April 2026, standard Vehicle Excise Duty (VED) rates will rise slightly. For cars registered after April 2017, the flat rate increases from £195 to £200 per year. This car tax increase applies to petrol, diesel, hybrid, and electric vehicles.
Although the change is modest, it contributes to the overall cost of ownership – something many buyers are increasingly conscious of when comparing vehicles. For dealerships, this can play a role in how price sensitive customers evaluate different models, particularly in competitive segments.
Electric Car Tax Updates
For electric vehicle (EV) owners and buyers, there’s a notable shift. The “Expensive Car Supplement” threshold – often referred to as the luxury car tax – rises from £40,000 to £50,000. Cars priced under £50,000 will no longer pay the additional £425 per year for five years, potentially saving thousands.
This change could make a broader range of EVs more appealing to buyers who were previously just above the threshold. For dealerships, it presents an opportunity to position more vehicles as cost effective options, particularly within the £40,000 – £50,000 price bracket.
Electric Company Cars: BiK Rate Changes
From 6 April 2026, the Benefit in Kind (BiK) rate for electric company cars will increase from 3% to 4%. This affects the tax employees pay for private use of a company vehicle.
While EVs remain significantly more tax efficient than petrol or diesel alternatives, the increase may slightly impact monthly take home pay. For dealerships, particularly those working with fleet or business customers, this shift may influence decision making around vehicle choice and lease structures.
Planning Ahead For Road Tax Changes
These road tax changes may be relatively small, but they can still shape how buyers approach affordability, vehicle choice, and long term running costs.
For dealerships, understanding these shifts makes it easier to anticipate changing demand – particularly as electric vehicles continue to grow in popularity. Adjusting how vehicles are marketed, priced, and presented online can help align with what buyers are prioritising.
Ready To Stay Ahead?
At Click Dealer, we understand how changes like these impact both buyers and the wider automotive market. We help dealerships stay one step ahead – whether that’s adapting to shifts in demand, promoting the right vehicles, or communicating key updates clearly to customers.
Our solutions are designed to help you sell more cars, more profitably, more often, with the tools and insights needed to succeed in a constantly evolving market.
Get in touch with one of our experts to hear how Click Dealer could help your business today.