Car tax, MOT and insurance

Vehicle tax — properly Vehicle Excise Duty — is payable on any vehicle used or kept on a public road. The rate depends on when the vehicle was first registered, its carbon dioxide emissions, its fuel type and, for more expensive cars, its original list price. Electric vehicles were exempt for years and are now within the system, which caught out a great many owners who had never had to think about it.

Pay annually, every six months or monthly by direct debit, with the shorter periods costing more overall. Direct debit renews automatically until you cancel it or the vehicle changes hands, which removes the commonest cause of accidentally driving untaxed.

Some vehicles are exempt from payment but still have to be taxed — the paperwork is done at a nil rate. This covers vehicles used by a disabled person, historic vehicles over a rolling age threshold, and some others. Exempt does not mean nothing to do; the vehicle still has to appear as taxed on the record.

Now the sale trap. When a vehicle changes keeper, the seller's tax is cancelled and any full remaining months are refunded automatically. The tax does not go with the car. The buyer must tax the vehicle before driving it, which can be done online or by phone immediately using the reference on the new keeper slip from the V5C.

This means the moment of handover is the risk point at a private sale. The correct sequence is: agree the sale, seller notifies DVLA of the change of keeper, buyer takes the green new keeper slip, buyer taxes the vehicle online there and then, buyer drives away. Skipping the middle step and taxing it 'when I get home' means the journey home is untaxed.

Enforcement is automatic. DVLA cross-checks its records against the tax database and issues penalties by post to the registered keeper. Vehicles can be clamped or impounded, and the release fees are substantial. There is no grace period and no discretion for having forgotten.

If you sell, notify DVLA immediately. Until you do, you remain the registered keeper and every automatic penalty for tax, insurance and enforcement continues to arrive at your address. This is the single most important thing a seller does, and doing it online produces an immediate acknowledgement you should keep.

A Statutory Off Road Notification tells DVLA the vehicle is not being used or kept on a public road. Once made, no tax is payable and any full remaining months are refunded.

Make the SORN before the tax expires if you can, or the same day. It takes effect immediately if made in the month the tax expires, or from the first of the following month if made earlier.

The vehicle must then be genuinely off the road — on a drive, in a garage, on private land. The kerb outside your house is a public road. Parking a SORN vehicle on the street, even without moving it, is an offence and is enforced from the database.

SORN does not end the insurance question automatically. Continuous insurance enforcement requires every registered vehicle to be insured unless it is subject to a SORN, so the two must line up. A vehicle with no insurance and no SORN generates an enforcement letter regardless of whether it has moved.

A SORN made by you ends when the vehicle is taxed again, or when it changes keeper. It does not transfer to a buyer — a buyer must either tax the vehicle or make their own SORN.

To bring a SORN vehicle back into use, tax it before driving it. The only journey you may make on a SORN vehicle is to a pre-booked MOT test, and even then the vehicle must be insured.

Scrapping or exporting a vehicle is a separate notification again. Scrap it only through an Authorised Treatment Facility, get the certificate of destruction, and tell DVLA. Handing a car to an unlicensed scrap dealer without notifying DVLA leaves you as the registered keeper of a vehicle you no longer control, with the penalties that go with it.

Most cars need an MOT from the third anniversary of first registration, then annually. Some vehicle types, including some private passenger vehicles with more than eight seats and taxis, need one from the first anniversary. Historic vehicles over a rolling age threshold are exempt unless substantially changed, though exemption from testing does not exempt you from keeping the vehicle roadworthy.

You can have the test done up to a month, minus a day, before the current certificate expires and keep the same anniversary date. This is a genuinely free option and it is widely unused. It gives you a month of slack to fix anything that fails without losing any of the year you paid for, and it removes the risk of a failure leaving you with an untestable car and no valid certificate.

The test fee is capped at a maximum set in regulations, and many garages charge less. Retests are free or reduced if the vehicle is left at the test centre and repaired there within a set period, or brought back within a shorter window for a partial retest.

Driving without a valid MOT is an offence with a fine, and it invalidates most insurance policies. There are only two exceptions: driving to a pre-booked MOT test, and driving to or from a garage for repairs arranged as a result of a failed test.

A failure is not the end of it. The result is recorded as either a major or a dangerous defect. With a major defect you can drive the vehicle away to have it repaired if the existing certificate is still valid. With a dangerous defect you cannot drive it at all — not to another garage, not home, not even with a valid certificate still running. That is the point at which people discover they need a recovery truck.

Advisories are not failures but they are worth reading. They are the surveyor's note that something will fail next year, and they are the cheapest predictive maintenance information you will ever receive. The full MOT history of any vehicle, including advisories and recorded mileages, is publicly available from its registration number — which makes it the single best free check when buying a used car. A mileage that goes down between tests is the clearest evidence of clocking there is.

Set an MOT reminder. DVSA sends free reminders by text or email a month before the due date, and it costs nothing to sign up.

It is an offence to use a vehicle on a road or public place without at least third party insurance. Third party covers injury to others and damage to their property. Third party, fire and theft adds those two risks to your own vehicle. Comprehensive adds damage to your own vehicle including where you are at fault. Counterintuitively, comprehensive is often cheaper than third party, because the third party market attracts a higher-risk pool of drivers.

Continuous insurance enforcement changed the nature of the requirement. Every vehicle registered in Great Britain must be insured at all times unless it has a SORN, whether or not it is being driven. The Motor Insurance Database is checked against DVLA records, and an uninsured vehicle generates an advisory letter, then a fixed penalty, and can lead to the vehicle being clamped, seized and destroyed.

You can check whether your own vehicle appears on the Motor Insurance Database, and you can check whether another vehicle is insured — useful after a collision where the other driver is evasive about their cover.

Driving without insurance carries a fine, six to eight penalty points and possible disqualification, and the police can seize the vehicle at the roadside. Automatic number plate recognition means this is now detected routinely rather than occasionally.

Two things that invalidate cover more often than people expect: not disclosing modifications, and 'fronting' — naming an experienced driver as the main policyholder when a younger or higher-risk driver is really the main user. Fronting is fraud, the policy is void, and a claim will be refused.

Driving other cars on your own comprehensive policy was once common and is now rare, restricted, and where it exists usually provides third party cover only, with conditions about the other vehicle being insured in its own right. Check the certificate rather than assuming.

Ghost broking is the fraud to know about. A ghost broker sells a genuine-looking policy that was obtained with falsified details, or was cancelled immediately after the documents were issued, or does not exist at all. The victim believes they are insured, is not, and is prosecuted as an uninsured driver. The warning signs are a price far below every quote you have had, contact through social media or messaging apps, and pressure to pay by bank transfer to a personal account. Buy through the insurer directly or a broker you can verify on the Financial Conduct Authority register.

If you are hit by an uninsured or untraced driver, the Motor Insurers' Bureau exists to compensate victims where no insurer is liable. It is funded by a levy on all motor policies and is the reason uninsured driving raises everyone's premiums.

Before buying, run the free checks. The MOT history shows every test, every advisory and every recorded mileage. The vehicle tax check shows whether it is taxed and when it expires. The insurance database shows whether it is currently insured. A vehicle whose history has gaps, whose mileage moves the wrong way, or which has been off the road for long periods without explanation deserves harder questions.

Check the V5C registration certificate carefully. It records the registered keeper, not the legal owner — those are different things, and the V5C is not proof that the seller owns the car. Verify that the details match the vehicle, that the document does not look tampered with, and that the seller's name and address match the document and their identification.

Outstanding finance is the most expensive thing that follows a car. If a vehicle is on hire purchase or conditional sale, the finance company owns it until the agreement ends, and it can be repossessed from an innocent buyer. A paid vehicle history check covering finance, write-off status and theft markers costs a small fraction of the loss it prevents.

At the point of sale, complete the change of keeper. The seller notifies DVLA — online is immediate and produces an acknowledgement — and gives the buyer the green new keeper slip. The buyer taxes the vehicle before driving it and arranges insurance to start on the same day.

The seller should keep the acknowledgement. Until DVLA processes the change, penalties for tax, insurance and any traffic contravention come to the old keeper, and the acknowledgement is what resolves them.

If you are buying from a dealer, the Consumer Rights Act 2015 applies and gives you rights that do not exist in a private sale — the vehicle must be of satisfactory quality, fit for purpose and as described, with a short-term right to reject and a longer right to repair or replacement. A private sale carries almost none of this: the only real requirement is that the vehicle is as described. That difference is worth a great deal more than most buyers price in when comparing a private bargain with a dealer's asking price.