Millions of Britons could be owed money from the Government if they have not claimed back the vehicle tax.
Drivers are being urged to take action after selling their cars or they could miss out on a cash rebate.
In April, vehicle tax rates increased in line with inflation, with owners of the most polluting vehicles facing costs of up to £2,605 a year.
Owners of electric vehicles are still exempt from needing to pay vehicle excise duty (VED) until April 2025.
Almost seven million vehicles changed hands in the UK last year
PA
The most popular selling used car in 2022 was the Ford Fiesta, with the 2020 model costing motorists around £155 a year in tax.
Because of this, motorists may be missing out on hundreds or even thousands of pounds in tax refunds.
After informing the Driver and Vehicle Licensing Agency (DVLA) that the car has been sold, drivers need to inform the agency as soon as possible.
This will allow them to get the maximum amount of money back, given that only the rebate only sends back money if there are full months remaining.
If they pay their vehicle tax through Direct Debit, it will be cancelled automatically by the DVLA.
The driver will then receive a refund cheque for any full months left on their vehicle tax, which is calculated from the date the DVLA receives the information.
However, motorists will not receive a refund for any credit card fees, a five per cent surcharge on some direct debit payments and a 10 percent surcharge on a single six-month payment.
It is believed that almost seven million vehicles changed hands in the UK last year, with almost 95,000 registrations of used Ford Fiestas.
According to Auto Trader, the average price of a used car is £17,975, a rise of 2.8 per cent compared to last year and a slight price increase since last month.
Tim Alcock, from LeaseCar, said: “If you’ve paid your road tax for a whole year, yet sell the car after a couple of months - you will be eligible to receive most of the tax back into your bank account.
“It’s important to note that the DVLA tax refund only applies for full months, so it’s best to apply for your refund straight away to avoid missing out on any cash.
“Before selling a vehicle, the log book (V5C) should also be updated to reflect any change of name, address, or modifications made to the car.”
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The Ford Fiesta was the best-selling used car last year
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The cheque is sent to the name and address in the V5C vehicle logbook, with motorists urged to ensure all documents are correct to get their rebate.
