Don’t fancy paying any car tax? Well, from 2026, these five cool cars will be completely tax exempt.
There are numerous incentives for owning a classic car. They not only evoke nostalgia and style but offer a refreshing break from modern vehicles overloaded with technology. Plus, many of them can retain their value over time. An added advantage? If you choose a classic that’s over 40 years old, you’ll be exempt from road tax. Although you’ll need to apply for this exemption annually, it won’t cost you a dime—a refreshing saving for any car lover.
As we approach 2026, several fascinating classics will reach this milestone, making them tax exempt. Here are five standout examples that combine charm, performance, and a bit of history.
1. Ford Sierra RS Cosworth – £50,000 – £100,000
The Ford Sierra RS Cosworth is a legendary figure in the pantheon of fast Fords. This iconic car, built on the polarizing “jelly mould” Sierra frame, is powered by a 2.0-litre four-cylinder engine paired with a massive turbocharger. The result? An exhilarating 0-60 mph in just 6.2 seconds and a top speed of 150 mph, delivering that signature thrill of 1980s turbo lag followed by an explosive surge of power. Notably, this vehicle became a target for thieves due to its intriguing blend of performance and relatively low-tech security features.
2. Peugeot 205 GTI 1.9 – £10,000 – £30,000
Launched in 1984, the Peugeot 205 GTI swiftly became a defining hot hatch of the ’80s. While it debuted with a 1.6-litre engine, car enthusiasts often covet the 1986 release of the 1.9-litre version. This model, weighing just 900kg, produced a nimble 130hp, making it an absolute joy to drive. Competing against rivals like the Ford Fiesta XR2i and Citroen AX GT, the 205 GTI stood out as a top choice for those seeking both fun and practicality.
3. BMW E30 M3 – £60,000 – £100,000+
The E30 M3 represents the inaugural model of the M3 lineage, shaping the world of performance sedans. Unlike the high-powered variants of today, this version boasts a 2.3-litre four-cylinder engine producing a modest 215hp. Created as a homologation special for racing, the styling sets it apart from its standard 3 Series counterparts, making it a favorite among enthusiasts looking for a blend of performance and heritage.
4. Jaguar XJ40 – £2,000 – £10,000
For those yearning for a taste of British luxury, the Jaguar XJ40 delivers sophisticated motoring without breaking the bank. Released in 1986 as the successor to the Series 3 XJ, it may not have garnered the same fanfare, making it an affordable option today. Available with either a straight-six or a V12 engine, the XJ40 promises a powerful ride, though enthusiasts should remain mindful that maintenance costs can add up.
5. Toyota Supra A70 – £10,000 – £50,000
The A70 Supra, part of the third generation, may reside in the shadow of its more illustrious Mk4 sibling, but it offers its own unique appeal. With retro styling, signature pop-up headlights, and a robust 3.0-litre engine, it remains a strong contender. The Turbo variant, however, won’t qualify for tax exemption until 2027, so enthusiasts may want to keep that in mind.
Before You Buy
When considering one of these classic beauties, remember that a vehicle must be 40 years old from its registration date to qualify for tax exemption. For example, if your classic was registered in May 1986, it won’t be tax exempt until May 2026.
While tax savings are enticing, it’s crucial to recognize that classic cars often require significant upkeep. The joy of owning one often comes with the reality of maintenance costs, which can quickly outweigh tax benefits. Therefore, make sure you’re ready for the commitment involved in preserving these wonderful pieces of automotive history.
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