Premium used cars now exempt from luxury car tax
What if you could get a luxury car without the extra tax? Just get a used one – these are our picks
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By Ben Welham
Last updated: 19 March 2025
Luxury car tax can be a real kick in the teeth, costing an extra £425 (from 1 April 2025) each year for the second to sixth years a car worth more than £40,000 new is on the road.
And from 1 April 2025, the luxury car tax will also apply to electric cars.
But you can avoid that extra tax and still get a premium car if you buy a used one that’s more than six years old – or even under a year old if it’s electric.
Plus, you’ll skip the more expensive emissions-based tax bands you pay for any new car for the first year.
Don’t believe us? Here’s a list of some of our favourite premium cars exempt from luxury car tax.
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Premium cars now exempt from luxury car tax
BMW M4 (up to 2017)
Volvo XC90 (up to 2017)
Tesla Model S (up to 2022)
Mercedes GLE Coupe (up to 2017)
BMW iX (up to 2025)
Mercedes EQS (up to 2025)
Range Rover (up to 2017)
Mercedes S-Class (up to 2017)
BMW M4 (up to 2017)
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There’s usually a distinct difference between performance and luxury cars, but the BMW M4 from 2014 to 2020 combines the two.
Based on the 4 Series, the M4 adds a wider stance, a more powerful 419hp twin-turbocharged six-cylinder engine and a cracking (quite literally) exhaust note.
Brand-new in 2017, it would have cost you upwards of £120,000, but now used prices are less than half of that. And if you buy one from 2017 or before, there’s no luxury road tax to think about because it’s more than six years old.
Read our BMW M4 review
Volvo XC90 (up to 2017)
 "Volvo XC90 driving")
Luxury SUVs are all the rage, bringing off-road capabilities in line with some seriously fancy interiors.
A used Volvo XC90 is the pinnacle of luxury motoring done properly, with some of the comfiest seats you’ll ever experience, and high-quality materials throughout.
You can also pick up an older one for a bargain. New, a 2017 XC90 would set you back £60,000+, but now you can save half of that – and not have to worry about the extra £425 tax each year.
Read our Volvo XC90 review
Tesla Model S (up to 2022)
 "Tesla Model S front three quarters")
New electric cars registered from 1 April 2025 onwards are now also subject to the luxury car tax, which makes buying a used one look even better.
And if you want luxury, a used Tesla Model S is top of the pile. Tesla stopped selling them in the UK in 2022 to focus on SUVs, so you’ll have to dip into the used market, but you’ll still get up to 394 miles of range from a 2022 example.
Brand-new, they cost around £80,000, but used ones are far cheaper to buy and then run – especially if you can charge at home.
Read our Tesla Model S review
Mercedes GLE Coupe (up to 2017)
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Mercedes has been making premium cars for longer than anyone not born in 1900 has been alive, which explains why models like the GLE Coupe are top-notch.
If you’ve ever sat in a modern Mercedes, you’ll know what we mean. And if you haven’t, imagine a first-class aeroplane seat with a steering wheel and some wheels.
Brand-new in 2017, a GLE Coupe would have set you back upwards of £100,000, but today, they’re far cheaper with a few miles on the clock.
Read our Mercedes GLE review
BMW iX (up to 2025)
 "BMW iX front three quarters")
Like their petrol-powered cousins, luxury electric SUVs are also very popular at the moment. They combine the three things British buyers long for – the clue’s in the name.
So, the BMW iX is ideal – a class-leading luxury car, an electric car and an SUV all at the same time.
With a 380-mile range, plenty of poke and an interior to rival any premium brand, it makes the perfect choice for fancy families.
Not only that, but they’re incredibly expensive new (circa £120,000 for a top spec version), so if you can find a used one in the spec you want, you’re in for a treat.
Read our BMW iX review
Mercedes EQS Saloon (up to 2025)
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Like its BMW rival, the Mercedes EQS Saloon is one of the fanciest electric cars money can buy – complete with an extra-efficient 481 miles of range.
It’s also stacked with clever features like the MBUX Hyperscreen and an augmented reality sat-nav, among many other things.
Brand-new, they cost up to £160,000, but you can pick up a nearly new one for a really attractive price and skip the luxury car tax.
Read more about the Mercedes EQS
Range Rover (up to 2017)
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Nothing comes close to a full-size Range Rover when it comes to luxury and an overall premium feel, does it?
This is not only reflected in what owners and reviewers say but also in the price. When new, these can easily soar beyond £100,000, but a used one is far cheaper.
Not only that, but you miss out on that pesky luxury car tax. If you really want to save the pennies, opt for a plug-in hybrid Range Rover with better fuel economy (and lower emissions).
Read our Range Rover review
Mercedes S-Class (up to 2017)
 "Mercedes S-Class driving")
There’s a reason important businesspeople up and down the country use a Mercedes S-Class to get around.
Not only are they quiet and refined, but they’re also spacious enough to work from in the back, leaving you to close those million-pound deals while on the road and in comfort.
They cost a pretty penny from the get-go, but a used one from more than six years ago gets loads of luxury and a much more attractive price.
Read our Mercedes S-Class review
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Discover used cars for sale
If you’re ready to dive into used luxury car ownership – all while avoiding luxury car tax like with the models we covered above – we can help you out.
Search through our used car listings to find the right car for you and save yourself the faff.
All our cars come with a 14-day money back guarantee and a free 90-day warranty for added peace of mind.