How to tax a car you've just bought

When you buy a car, the tax doesn't come with it. It doesn't matter how many months the seller paid for, or what they tell you. The moment the car is yours, it's untaxed until you tax it. Getting this wrong can mean an automatic penalty or a stop by the police on the way home.

The good news is that taxing a car takes about five minutes online, and you can do it standing next to the car.

Why the tax doesn't transfer

Until October 2014, the paper tax disc stayed with the car, and the buyer got whatever time was left. When the disc was scrapped, the rules changed. Now:

• the seller tells DVLA the car has been sold, and DVLA refunds them any full months of tax left
• the buyer must tax the car from the date they become the keeper

So even a car that showed as taxed yesterday will need new tax from you today.

What you need

You need the new keeper slip. It's the green section of the V5C log book (V5C/2) that the seller tears off and gives to you. It has a 12-digit reference number, which you use to tax the car.

You'll also need:

• a debit or credit card, or bank details for Direct Debit
• a valid MOT, if the car needs one
• insurance, before you drive it

If the seller doesn't give you the new keeper slip, don't buy the car until you've found out why. A missing log book can be a warning sign, as our guide to reading MOT history before buying explains.

How to tax the car, step by step

1. Check the MOT. If the car needs an MOT, it must be valid when the tax starts. Our MOT due date checker shows the expiry date instantly.
2. Arrange insurance. You can't legally drive the car without it, even for one short journey.
3. Tax it online. Use the official tax service on GOV.UK with the reference from the new keeper slip. You can also tax by phone, or at a Post Office that handles vehicle tax.
4. Choose how to pay. Pay for 12 months in one go, or set up a Direct Debit (see below).
5. Check it's worked. The tax is effective straight away. Our car tax check will show the new status once DVLA's record updates.

Payment options

Direct Debit is convenient because it renews automatically. If you sell the car later, the Direct Debit is cancelled when you tell DVLA.

How much will it cost?

The rate depends on when the car was first registered, its CO2 emissions or engine size, and its fuel type. Cars with a list price over £40,000 when new pay an extra supplement for several years (the threshold can differ for electric cars). The GOV.UK tax service tells you the exact amount before you pay, using the registration number.

Electric cars, which used to be tax-free, now pay vehicle tax too, so don't assume a car is exempt without checking.

What if you don't tax it?

There's no grace period. DVLA's records show who the keeper is and whether the car is taxed, so an untaxed car is picked up quickly.

• An automatic penalty of £80 can be issued for an untaxed vehicle.
• If it goes to court, the fine can reach £1,000.
• An untaxed car parked on a public road can be clamped or removed.

If you're not going to drive the car straight away, for example because it needs repairs, you can make a SORN instead. Our guide to SORN explains how.

Buying from a dealer

Many dealers will tax the car for you, or show you how to do it on handover. It's still your responsibility as the new keeper, so check the tax status before you drive off. A dealer will normally send the keeper change to DVLA on your behalf. You'll get the new V5C in the post, usually within a few weeks.

Checklist for collection day

• The green new keeper slip is in your hand
• The MOT is valid (or you're driving straight to a booked test)
• Insurance starts from the time of collection
• The car is taxed in your name
• The seller has told DVLA about the sale

Tax it before the first mile

Tax never comes with the car. Before you drive a car you've just bought, insure it, check the MOT, and tax it with the reference on the green new keeper slip. It takes minutes, and it avoids a penalty on your very first journey.