Expensive Car Supplement (Luxury Car Tax) on Leased Vehicles
The Expensive Car Supplement (often called “luxury car tax”) is an additional charge that can affect the cost of leasing certain vehicles in the UK.
It applies to cars with a higher list price and is built into your lease costs when applicable.
When does it apply?
The supplement applies if a vehicle’s list price exceeds:
- £40,000 for petrol, diesel and hybrid vehicles
- £50,000 for fully electric vehicles (from April 2026)
This is based on the manufacturer’s official list price when new—not the discounted lease price.
How much is it?
From April 2026, the charge is:
- £440 per year
- Applied from year 2 to year 6 of the vehicle’s life
For leases that cover this period, the cost is typically spread across your monthly payments.
How this affects your lease
- The prices shown on our site may exclude the Expensive Car Supplement
- If the vehicle exceeds the threshold, the cost will be included in your final lease quote
- This means your monthly payments may be higher than the headline price shown
Optional extras can increase your cost
It’s important to be aware that:
- Adding optional extras increases the vehicle’s list price
- If this pushes the car over the threshold, the supplement will apply
- This can increase your monthly lease cost
Electric vehicles
Electric vehicles have a higher threshold:
- EVs under £50,000 do not pay the supplement
- EVs over £50,000 are charged £440 per year (years 2–6)
This reflects the generally higher cost of electric vehicles.
In summary
- The Expensive Car Supplement applies to higher-value vehicles
- It’s based on list price, not lease price
- It may increase your monthly lease cost
- Optional extras can trigger the charge
- Electric vehicles have a higher £50,000 threshold
All information can be found on gov.uk