Drivers 'overpaying' DVLA when they 'don't need to'

A study has found that 2.9 million British motorists are paying the DVLA more than they need to for their Vehicle Excise Duty, or car tax, because they're unaware of a 5% surcharge added to their payments. This extra cost affects drivers who choose to split their car tax payments into monthly direct debit instalments, meaning they end up paying more in total.

The research, published by Go.Compare Car Insurance this time last year, discovered that nearly two-fifths (39%) of motorists had no idea about the additional charge linked to this payment option. Of all vehicle owners paying their car tax monthly, an estimated 5.6 million didn't realise there was an added fee included in their tax bill.

The 5% surcharge can rapidly mount up for those using this payment method. Collectively, British drivers unknowingly fork out an additional £56.3 million each year.

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Nearly half (49%) of these motorists admitted they would switch their payment approach if they knew about the surcharge. As a result, 2.9 million drivers have paid more than they should have due to being unaware of the 5% extra fee, representing a potential saving of £27.5 million, according to the research team's calculations.

To demonstrate the impact, Go.Compare highlighted that a vehicle owner paying £1,000 per year in car tax through monthly instalments would face an extra £50 annually in surcharges. Over five years, this adds up to £250 wasted on avoidable fees.

Those facing steeper vehicle tax bills could be wasting even more cash. Drivers opting for the more convenient monthly or six-monthly vehicle tax payment schemes are unwittingly paying extra due to an automatic surcharge, new research has shown. The additional charge isn't applied to one-off annual payments, catching out motorists on instalment plans.