A classic car owner’s guide to the new ULEZ zone

Anyone who's driven the streets of central London at any time over the past couple of years will have been aware of a comprehensive new measure to clamp down on air pollution in the city (and no, we're not talking about the already well-established Congestion Charge here).

Rolled out in April 2019, the Ultra-Low Emission Zone (ULEZ) covers an area of central London exactly equivalent to the Congestion Charge zone – taking in the City of London itself, plus Westminster, Marylebone, Mayfair and, over the river, Lambeth, Vauxhall and Southwark. Within this area, cars that don't meet certain emissions standards are now subject to a daily charge when entering the central zone.

To escape the daily fee, cars must meet Euro air pollution standards: Euro 4 or above for petrol cars (which typically means cars registered after January 2006) or Euro 6 for diesels (usually registered after September 2015). If your car meets these requirements, the ULEZ simply won't be a factor in your life.

Another exempt class of cars, as we'll see, are cars aged 40 years or over. We'll debate the whys and wherefores of this exemption a little later, but for now rest assured that, as long as you have the right paperwork, your older or classic motor is not subject to the ULEZ. No need to set aside valuable funds that could otherwise be spent lovingly maintaining your classic – and protecting it with the classic motor insurance that it deserves.

If your car doesn't fit into either of these 'clean' or 'classic' categories, however, you'll find yourself paying the ULEZ's daily £12.50 fee for most vehicles, or £100 for (most) bigger, heavier goods lorries, buses, and coaches.

This fee sits on top of the existing £15 Congestion Charge, making driving in central London an expensive business these days – particularly for vehicles that don't meet modern emissions requirements. And, unlike the Congestion Charge, the ULEZ applies 24 hours a day, and seven days a week, including public holidays. It resets at midnight, too: drive into town in the evening and crawl home in the small hours, and you'll be paying twice.

All this could well have an impact on the value of 80s/90s modern classics like the Peugeot 205, VW Golf Mk2 through Mk5, later iterations of the classic Mini, early generations of the Porsche Boxster and Mazda MX-5, the first-generation Ford Focus – and so many more.

These cars are currently appreciating nicely as their legendary status is cemented: however, they will now find themselves – for a few years at least, until they turn 40, more on which shortly – liable for the ULEZ charge. This will surely make these future classics – for London drivers at least – a less attractive ownership prospect.

The sums add up alarmingly quickly. Driving a non-compliant car into London just once a week racks up an annual bill of £650. Head into the city in your ineligible vehicle five days a week, meanwhile, and you'll be footing a £3,250 annual bill.

Thank your stars you're not driving a bus or large lorry through London, though, in which case your daily rates would be into the hundreds.

Next steps: ULEZ expansion

So, that's the situation currently. The big news coming quickly down the track, though, is that the ULEZ is about to get much, much bigger. From 25th October 2021, the zone will expand to take in a far larger area – everything within the A406 North Circular and A205 South Circular roads, in fact.

It's all part of a broader initiative to reduce air pollution and make our city streets cleaner and safer places. London has pioneered these measures, but other UK cities are following fast. Birmingham's own Clean Air Zone came on stream in June 2021, meaning that all car travel within the A4540 Middleway Ring Road is now subject to a £8 daily charge. Oxford, Bristol, Leicester, Bradford, and York are among the cities expected to follow suit.

What’s the thinking behind the ULEZ?

The top priority is to reduce air pollution in the capital. Few can argue with that as a priority, particularly given the harmful effects of nitrogen oxides (NOx) and particulate matter.

The ULEZ itself was first suggested by PM Boris Johnson during his tenure as Mayor of London, but was eventually introduced by the current Mayor, Sadiq Khan. The measure did have an immediate effect: the number of the worst polluting vehicles dropped from 35,600 to 23,000, while emissions in Central London dropped by 20%.

Indeed, TfL says that since the ULEZ's introduction in 2019, nitrous oxide emissions have been cut by 44 per cent, while over 12,000 tonnes of carbon dioxide has been saved.

The ULEZ and classic cars

Interestingly, in fact, newer (and cleaner) vehicles aren't the only ones exempt from the ULEZ – they're joined by cars at the other end of the age scale. Yes, it turns out that cars designated 'of historic interest' (i.e., those aged 40 or over) are also exempt, in much the same way as they avoid MOT obligations.

So, if you're pootling around in something four decades old or more, you'll be grand as far as ULEZ is concerned (your other options, should you wish to get around town yet remain ULEZ-exempt, include military vehicles, circus vehicles, and some farm vehicles. So, there you go). You can learn more about the environmental impact of classic cars through our helpful guide.

Just be aware, though, that – in the same way that you do for MOT exemption – you must declare your classic as a Vehicle of Historic Interest (VHI). You can do this at a tax issuing Post Office by first filling in the blue ‘changes section 7’ on page 2 of the V5C Registration Certificate (AKA Log Book) bottom line ‘Tax Class’ by writing Historic, then signing and dating in the bottom section 8. Ensure that there is insurance in force and take the insurance certificate in case the Post Office system can’t do the usual online verification.

Fill in a standard tax application form V10 and write Historic in the tax class window section and apply for 12months (the only option for Historic tax.) Take the above documents and the current MOT if it is valid for at least the first day of the new tax period (always the first of a month), or if expired a completed form V112 to the local Licence issuing Post Office. Note that this process is the ending of one tax class period (PLG) and the start of a new one ‘Historic’ and why the insurance all the documents are needed.

The Post Office will process your application and commence the new taxation period with no payment of duty (zero rated) return your V112 or MOT and insurance with a counter receipt. They will retain your V5C and forward it to DVLA who in about 14 days will issue a new V5C with the tax class changed to ‘historic’ on page 2 of the new V5C. If when you apply for the change there are complete months of tax paid under the PLG group, this will be automatically repaid to you over the following couple of weeks normally.

Things could have been a lot worse for classic car owners. When the scheme was first proposed in 2014, no mention was made of any exemption for older models, leading to fears that the introduction of the ULEZ might effectively banish classics from central London – causing huge disruption for classic car owners and enthusiasts based in the city, and perhaps spelling the end for classic car events such as the Regent Street Motor Show or the London to Brighton Run.

Happily, following a campaign by Classic & Sports Car magazine, among others, an exemption was created for historic vehicles.

When is my car defined as a classic?

Similar to the new MOT rules that were introduced in 2018, the ULEZ uses a rolling cut-off of 40 years. Here at Lancaster we also consider things like annual mileage and where the car is stored when searching for classic car insurance quotes.

However, it's important to note that the ULEZ requirements do differ from the MOT rules. The legislation surrounding the process for moving into the Historic tax class requires a car reaching 40 to pass through that year and the legislation says that only from the 1^st January of the following year can the change be applied for. This is further complicated by DVLA rules that specifically do not process any application for transfer into the historic tax class until 1^st April of that year.

So, for example if you have a Citroen CX first registered in May 1982, that will reach 40 in May 2022, but have to pass through the rest of 2022 and the keeper will not be able to apply for transfer to Historic Tax until 1^st April 2023 at the earliest.

Please note, for cars registered in the first couple of months of the year it is quite possible that it was actually manufactured during the previous year. In which case obtaining a certified extract from the car makers original factory records (Heritage Certificate) to prove manufacturing date in that previous year would mean that the opportunity to transfer to the Historic Tax class would be accepted 12 months earlier than would be possible by registration date, but now the application would have to be done direct with DVLA.

Why are classic cars exempt?

At first glance, the exemption for classics, though welcome, might seem strange. The emissions produced by, say, a two-litre engine from the 1960s will be many times higher than those of, say, an injected two-litre engine, complete with exhaust catalyst, from 2002: yet the former car will be exempt from a charge aimed at reducing emissions, the latter not. Learn more about what makes a classic car valuable.

The thinking here, though, is threefold. Firstly, these vehicles are usually of cultural significance. As we don't need to tell anyone reading this post, having a good selection of classic cars on the road is a positive addition to our natural culture. We very much share that thinking that our automotive heritage is well worth treasuring, and we applaud anyone keeping a classic car on the road. We bring a similar passion for our motoring history to the provision of classic car insurance.

Next, perhaps more significantly as far as the ULEZ's raison d'être is concerned, these classics generally aren’t used all that often (government statistics show that the average classic car is driven significantly less than 1,000 miles per year), so are negligible contributors to air pollution.

Similarly, in terms of sheer numbers on the road, classic cars are a very small part of the UK's overall automobile picture. Couple this with that low annual mileage, and it becomes clear that the UK's classic cars are small contributors to air pollution.

Classic commercial vehicles and ULEZ

Commercial vehicles, including classic examples, have a tougher set of rules before them. In general, commercials must have been registered before 1st January 1973 – a slightly longer lifespan than that for private cars – to achieve ULEZ exemption.

Agricultural and military vehicles, however, are exempt – and there is a ULEZ discount in place for ‘showman’s vehicles’, vehicles for disabled people, and minibuses used in a not-for-profit guise.

How do I pay the ULEZ charge?

There aren’t any tolls or barriers to mark the ULEZ: just as with the Congestion Charge, drivers need to keep their eyes out for signposts that tell them when they're about to enter the fee zone.

Cameras record the licence plate of all vehicles driving within the zone: they then search a database to check whether that vehicle meets the emissions standards or is liable for the ULEZ charge.

You can register to pay the charge automatically every time you enter the zone – or you simply pay online within 24 hours of incurring the charge. Failure to pay on time lands you a £160 fine (reduced to £80 if it’s paid within 14 days) – or £1,000 for lorries.

Is my pre-2006/2015 car liable?

Finally, we return to the unfortunate tranche of cars caught in the middle – those neither old enough to secure exemption through classic status, nor young enough to duck the fee thanks to their low emissions.

Are all pre-2006 petrol’s, and all pre-2015 diesels, liable for the ULEZ?

Not quite. Those are the dates when the relevant petrol and diesel emissions standards were introduced, and any cars registered after that will be compliant. However, a few models produced even before that date also come under the emissions threshold, simply by virtue of being a little ahead of their time on the emissions front.

A 2004 Audi A4 1.8T, or even a 2001 Honda Civic 1.4 SE, won't fall foul of the ULEZ regulations – and won't leave you in London and out of pocket.

Over on the diesel side of things, it turns out that quite a few diesel cars made it to Euro 6 standards before September 2015. If you own, say, a 2013-14 Audi A3 1.6 or 2.0 TDI, a BMW 120d from 2012 onwards, or a Mazda 2.2 SkyActiv-D from 2013 onwards (and these are just a few examples), you'll be in luck.

Protecting your classic on the road

Congestion charges, low emission zones… as a classic car driver today, you have a fair few changes to the motoring landscape to get your head around.

With all this to think about, you don't want to be scratching your head over classic car insurance as well.

At Lancaster Insurance, we have years of experience insuring all types of classic and military vehicles.

We can arrange an agreed valuation for your classic and find protection for hard-to-insure models.

If your classic is MOT exempt, we can help. Plus, if you’re planning a classic EU road trip, we can find you appropriate cover for up to 90 days while you’re abroad.

Cover through can provide a range of benefits including:

• Historic rally cover
• Static show cover
• Limited mileage discounts
• Choice of repairer
• 24-hour claims helpline

If the worst does happen, you can be sure our UK-based call centre will be there to help.

Give your classic car the protection it deserves and contact us for a classic car insurance quote today.

Policy benefits, features and discounts offered may very between insurance schemes or cover selected and are subject to underwriting criteria. Information contained within this article is accurate at the time of publishing but may be subject to change.