Monthly Car Tax Calculator
The DVLA allows you to pay Vehicle Excise Duty monthly via direct debit. While this spreads the cost, it comes with a 5% surcharge – meaning you pay more overall for the convenience.
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A common mistake is assuming monthly payment is cheapest because individual payments feel smaller. On a standard £200 annual rate, paying monthly Direct Debit costs £210 per year – an extra £10. If you sell your car mid-year, annual payers receive refunds for remaining months.
Comparing monthly vs annual car tax payment helps you decide whether the cash flow benefit outweighs the extra cost. Enter your vehicle's annual VED rate below.
Your Vehicle Tax
Use your DVLA annual renewal amount, including any supplement. This compares annual payment with monthly or six-monthly Direct Debit; check DVLA for the exact schedule and whether six-month tax is available for your band.
Common VED Rates (2026/27)
- • Standard rate (post-2017): £200/year
- • Electric vehicles: £200 renewal for post-2017 EVs; £20 for March 2001–March 2017 EVs
- • Expensive car supplement: +£440/year in licence years 2–6 where applicable
Cost Comparison
Your Selected Method
£16.67/month
£200.00 total per year
All Payment Options
Annual
Single payment
£200.00
£16.67/mo equiv.
6-Monthly DD
2 × £105.00
£210.00
+£10.00 extra
Monthly DD
12 × £17.50
£210.00
+£10.00 extra
Key Points
- • Monthly payment requires Direct Debit; six-month payments without DD have a 10% surcharge.
- • Notify DVLA on sale/SORN: DD stops and full unused tax months may be refunded; surcharges are not refunded.
- • Displayed instalments are rounded estimates; DVLA confirms the actual payment schedule.
Is the monthly direct debit worth it?
Paying monthly is convenient, but the DVLA charges a 5% surcharge for the privilege — on a typical £200 VED that's an extra £10 per year. Across the life of the car (say 7 years) you're looking at around £70 of extra cost at unchanged rates for spreading the payment.
Monthly works best if a single £200+ outlay genuinely strains your cash flow or you may sell the car within months. Paying annually is cheapest. Six-monthly Direct Debit offers fewer payments at the same 5% premium as monthly DD — and you also get a clean refund of unused months if you sell, scrap or SORN the vehicle.
Understanding Monthly Car Tax
Vehicle Excise Duty (VED), commonly called road tax or car tax, can be paid annually, 6-monthly, or monthly. While spreading payments can help with budgeting, it comes at a cost—here's what you need to know.
Why Monthly VED Costs More
The 5% Surcharge
Monthly and six-monthly Direct Debit include a 5% surcharge on the annual rate. A six-month payment without Direct Debit costs 10% extra; it is not the same payment option.
Example: £200 annual rate = £210 over a year on monthly/six-monthly Direct Debit
Over 5 Years...
The surcharge might seem small, but over typical car ownership it adds up:
- • 1 year: £10 extra
- • 3 years: £30 extra
- • 5 years: £50 extra
- • 10 years: £100 extra
Direct Debit Rules
Payment Date
After the first payment, Direct Debits are taken on the first working day of the month they are due. DVLA confirms your schedule.
Changing Bank Details
You can update your bank details online at gov.uk. Make sure to do this before your next payment date to avoid failed payments.
Cancelling
You can cancel your Direct Debit at any time through your bank, but this doesn't stop your tax obligation. You'll need to tax your vehicle another way or declare it SORN.
When Monthly Makes Sense
Good for:
- • Tight monthly budgets
- • New car with expensive VED
- • Planning to keep car long-term
Consider carefully:
- • Might sell within a year
- • Irregular income
- • Multiple vehicles
Avoid if:
- • You can afford annual
- • Selling car soon
- • Unreliable bank balance
Frequently Asked Questions
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