However, first-year VED rates will double for motorists with cars emitting over 75g/km of CO2.
For some this will see thousands of pounds added to total bills with some set to pay almost £5,500.
Finance experts at Pete Barden explained: “Starting from April 1, 2025, the UK’s Vehicle Excise Duty (VED) rates for new cars are set for a major overhaul, with significant increases in first-year rates for certain vehicle emissions categories.
“The government explains these changes as a way to “strengthen incentives” for choosing zero-emission and electric vehicles by expanding the cost differences between electric, hybrid, and internal combustion engine (ICE) vehicles.”
Petrol and diesel cars emitting over 255g/km of CO2 will see first-year VED bills increase from £2,745 per year to £5,490 from April.
Cars emitting between 226 and 255g/km of CO2 will see bills rise from £2,340 to £4,680.
Meanwhile, vehicles which produce over 191 to 225g/km of CO2 will now be charged £3,300 per annum compared to £1,650 currently.
HM Revenue and Customs (HMRC) stressed the updates would widen the fees between electric, hybrid and combustion models.
HMRC commented: “Vehicle Excise Duty first-year rates are paid for the first year of a car’s lifecycle, at the point of registration, and vary based on emissions.
“From 1 April 2025, the Vehicle Excise Duty first-year rates will be changed to widen the difference between zero-emission, hybrid and internal combustion engine cars.”