Cars that become tax exempt in 2022

What do the Triumph Acclaim, Fiat Panda, and second-generation BMW 5 Series have in common? Relatively little, you might think. And, in most ways, you'd be right.

But in fact, these three very different cars do share one feature: they all hit UK showrooms back in 1981. So far, so interesting: 1981 was clearly a decent year for new car launches. There were some more gems introduced that year, and we'll get onto them in a moment.

But what's chiefly of interest to us here is that this launch date means that the earliest editions of these three cars, and of various other early examples from the class of '81, will become exempt from road tax from April 2022.

How so? Essentially, under Vehicle Excise Duty (VED) rules, any car that was built over four decades ago becomes exempt from road tax.

So, if your car was built before 1st January 1982 you can apply to stop paying tax on it from 1st April 2022. That means owners of a host of 1981 models will no longer have to pay tax this year. Don't forget your classic car insurance, though!

Cars, vans, and motorcycles built before 1st January 1982 are all exempt. There are some exceptions, however. Your vehicle is not entitled to tax exemption if it's used for 'hire or reward' (as a paid-for taxi, for example) or is used commercially for a trade or business.

If you don’t know when your vehicle was built, but it was first registered before 8th January 1982, you can still apply to stop paying vehicle tax. We explain all this in a little more detail in our article, Is my classic car eligible for MOT and road tax exemption?

It's also worth noting that, even though you do not have to pay, you must still fill in the forms and tax your vehicle. It's just that your tax will amount to precisely £0 this time around. And, of course, you still need to keep insuring your vehicle – and, given its age, classic car insurance is definitely the best route for you.

How does it work? Well, the onus is on you to apply for a vehicle tax exemption from the DVLA. You do this by going to a Post Office branch that is able to handle Vehicle Tax. You must take along the log book (V5C) in your name; your vehicle tax reminder letter (V11), if you have one; and either an MOT certificate valid from the start of that tax year, or documentary evidence of your vehicle’s exemption from MOT testing.

The Post Office will send your log book to the DVLA, who will then send you an updated version. This new document makes it clear that your vehicle is now eligible for historic vehicle tax, charged at zero.

Similarly, cars that turn 40 no longer require an annual MOT. They are also automatically exempt from the London Ultra Low Emission Zone charge (ULEZ). We discussed how the ULEZ, and how it affects classic car owners, elsewhere on our blog.

So, effectively, we're looking at cars produced in 1981 that are now exempt from paying tax. So which classics does that include? Remember that the cars need to be registered before 1st January 1982 – so it's not just any Panda, Acclaim or E28 5 Series we're talking about here. Only cars from the very first few months of production, during 1981 itself, will count so far.

This year's new arrivals on the tax exemption landscape

BMW 5 Series (E28) (1981-88)

To our eyes, the second-generation (E28) BMW 5 Series remains one of the most elegantly proportioned saloons of the 1980s, or indeed of any decade. Its sturdy yet attractive looks have aged well, and the Mk2 5 is now an unquestioned classic – a little like its smaller brother, the E30 3 Series, which came along a year later.

Externally, the E28 may not look radically different from its predecessor, the first-generation, E12 5 Series of 1972-81. However, beneath that conservative exterior lurked a number of crucial changes. The 5's suspension and brakes were completely revised for this new model, as were the chassis and inner wings.

The car also got an all-new interior, including such early '80s innovations as cruise control, a trip computer and – gosh – a service indicator, alerting the driver about fluid levels and electrical issues. This last was a new feature on a BMW, and would find its way into all the company's cars from here onwards.

The E28 also boasted a sophisticated air-conditioning system. The latter got tested in the best possible way: several BMW engineers drove a previous-generation, E12 5 Series around sweltering Texas during the middle of summer.

There's a UK E28 owners' group on Facebook – with almost 4,000 members, so there must be a good few of them left here in Britain. Joining an owners' club is a great way to connect with fellow enthusiasts of your classic car, and to ask for advice about technical issues and parts sourcing. Membership can also secure you discounts on your classic car insurance.

Vauxhall Cavalier Mk2

The second generation of Vauxhall's huge-selling Cavalier family car is indelibly associated with the 1980s. In particular, its ongoing sales war with Ford's more adventurously styled Sierra was one of that decade's most absorbing popularity contests.

You can read more in our fascinating rundown of the 1970s and 1980s Ford v Vauxhall sales wars, but essentially, the Mk2 Cavalier did manage to lord it over the Sierra for a couple of years back there. After being Britain's fifth and fourth best-selling car in both 1982 and 1983 respectively, the Cavalier climbed to a very impressive second place in 1984 and 1985.

During those two years, the Cavalier was second only to the ubiquitous Ford Escort in the nationwide sales table. And it was comfortably ahead of the Sierra, whose futuristic, 'jelly mould' looks the public was still getting used to.

To our eyes, the middle-generation Cavalier is a very handsome if fairly conservatively styled car, in either its saloon or hatchback forms. A comprehensive array of trim levels, meanwhile, went from the basic L to the luxurious GLS, and on upwards with the sporty SR and SRi models.

Refined, comfortable and very capable on the motorway, the Cavalier was a company-car favourite, and sold in huge numbers. There are relatively few around in great condition today, however, so you'll have to scour the classifieds to find a good one. As and when you do find the 'Cav' of your dreams, be sure to protect it with some classic car insurance.

Triumph Acclaim

Observers of British motoring history know the Acclaim chiefly for one reason: it was the last production car to bear the Triumph marque name. Officially launched by British Leyland on 7th October 1981, the Acclaim marked the end of the line (in automobile terms, at least) for the Triumph brand.

But was this three-box saloon worthy of such an honour? On balance, yes it was. OK, on the one hand, it wasn't technically a Triumph at all – rather, it was a Honda Ballade, badge-engineered (and given a dusting of slightly more premium features) for the UK market. No matter, though, as the Acclaim went down well with the British motoring press and public alike.

Why the Honda partnership? Well, by the late 1970s, BL's own mid-size range – including cars such as the Morris Marina and Austins Maxi and Allegro – was beginning to look a little tired. Worse, there was nothing new to show the public yet, with the Maestro and Montego duo not to appear until 1983 and 1984 respectively. BL needed a new mid-size car to unveil to the public, and approached Honda with the idea of building British versions of its Ballade small saloon. The Japanese were keen, and a deal was struck.

Perhaps unsurprisingly given its underpinnings (Honda were legendarily reliable even back then), the Acclaim proved to be a decent, reliable ownership prospect, and it sold well in its short, three-year production run. Some 134,000 Acclaims were made before the car was retired in 1984. We recently came across one particularly well-maintained example.

Talbot Samba

Small car, big story. There's actually quite a lot to say about the Talbot Samba, the apparently unremarkable city car that launched right at the end of 1981.

Talbot was a defunct marque when it was acquired by Peugeot in 1978. The back story: Chrysler had decided to offload its European arm, which included the dormant marque, and when Peugeot (or PSA Peugeot Citroen, to be precise) acquired Chrysler Europe that year, they got use of the Talbot brand as part of the deal.

The first car that PSA produced under the revived Talbot name was the neat little Samba, which was built at the former Simca factory in Poissy, near Paris. Based on the Peugeot 104, it was the only Talbot not inherited from Chrysler Europe but engineered by PSA alone (other Talbots, such as the Solara, were former Chryslers/Simcas). Five years later, in 1986, the Samba's demise was effectively the end of the road for the Talbot brand, as far as passenger cars were concerned.

Launched as a three-door hatchback, the Samba soon got another style – a factory-ordered cabriolet. That gave it another unique selling point: it was the smallest car you could buy with a soft-top option. Lastly, to complete the Samba's impressive round of distinctions, it was also for a while the most economical car in Europe.

If you own or are planning to own one of these neat and historic little superminis, there are a couple of places where you can meet fellow Samba owners. Facebook has a forum for owners of the Samba and its close relations, the Peugeot 104, Citroen LN/A and Citroen Visa.

Meanwhile, the Simca Talbot Club is the place to connect with other owners of Talbot's various 1970s and 1980s offerings – not just the Samba, but also the Chrysler / Talbot Alpine and the unique, forward-looking Matra Rancho, which we remembered fondly in this blog post.

Ford Fiesta XR2

The Ford Fiesta itself had been around since 1976, but it wasn't until 1981 that its sporty variant was introduced. Well, that's not quite true: a predecessor to the XR2, the Supersport, was introduced in 1980. This souped-up Fiesta still had a 1.3 engine, already larger than the standard car's 1 and 1.1-litre options. Being produced for just one year – it was effectively a test bed for the XR2 itself – the Supersport is now very rare and, unsurprisingly, commands big prices as a used buy – like this one that sold for a little north of £20,000.

Then, in 1981, Ford evidently having concluded that a sporty Fiesta was a worthy project, along came the XR2 itself. This got a significantly uprated engine: a 1.6-litre unit that could propel the car from a standing start to 60mph in 9.3 seconds, before topping out at 105mph.
The XR2 also featured some new additions to the Fiesta range, such as black plastic trim on both the exterior and interior (replacing the standard car's chrome), plus larger circular headlights replacing the usual square lamps. Suspension was stiffened, too, to give the sportier ride that increased power output warranted.

The twin front spotlights, the 'pepperpot' alloy wheels and the contrasting black body-kit all worked with the car's pace and fine handling to make it a cult favourite. It was also an affordable pocket rocket: city slickers might have driven the Golf GTI, but the XR2 was within the budget of the blue-collar crowd.

Those impressive sporting credentials made the first XR2 something of a boy racer's favourite throughout the decade. There are still a few around to this day – we recently documented one particularly well preserved example – and you may be able to snag this iconic 80s hot hatch for around £10,000. If you do, make sure you protect it with some classic car insurance.

Talbot Tagora

The second Talbot in our list? Yes, the newly resuscitated marque had a busy 1981, bringing out both the tiny Samba and, at the other end of the range, the large and technologically advanced Tagora. This imposing, square-edged saloon was finished off by Talbot's new owners Peugeot, although previous owners Chrysler Europe had started the project.

Peugeot pitched the Tagora as a spacious, upmarket alternative to other flagship models from mid-market brands – such as the Vauxhall Carlton, Mk2 Ford Granada, Volvo 240 and Rover SD1. This was a car for buyers who wanted something a little more opulent than a Cortina or Cavalier, but weren't yet ready to enter the Mercedes / BMW marketplace. Its low waistline and long wheelbase made for a roomy, airy interior, it had a decently big boot, and the technology within was up to the minute.

So why was the car cancelled in 1983, after just two years on the market? Well, a variety of reasons came into play. For one thing, the 1979 fuel crisis meant that large, thirsty cars weren't selling all that well, and better and/or better recognised cars like the Granada and 240 were hoovering up most of the (reduced) sales. Another factor is that, arriving already half-formed, the Tagora was a perhaps unwelcome rival to Peugeot-Citroen's own large saloons, the 604 and the CX. It's possible that this was a car that the company didn't really want to work on, and take to market – but it came as part of the Chrysler acquisition deal.

That short production run and those poor sales mean that the Tagora is now vanishingly rare on our roads. A shame, as it was a handsome large saloon that did very little wrong.

Fiat Panda

Fiat's boxy and hugely likeable supermini arrived in Italian showrooms in 1980, but didn't reach us until mid-1981. And the attractive and affordable Panda – from the pen of the legendary Giorgetto Giugiaro – caught on very quickly, luring many economy-minded Brits out of their Citroen 2CVs and Renault 4s.

Affordability and practicality were the watchwords here. In fact, the Panda had a kind of utilitarian ethos that, rather than making it a dull little hatchback, actually contributed much of the car's charm.

A flat glasshouse and body panels kept costs down (as well as giving the car those unmistakable square-sided looks). The suspension was kept basic, with leaf springs over the rear beam axle. Even the engines and running gear were borrowed from the car's predecessor, the Fiat 127. The interior, meanwhile, was both clever and simple. All the seat coverings could be removed and washed; the back seat could be folded flat into a bed, or removed completely.

Practical, affordable and really rather cute, it's no wonder that the Panda sold in droves. These days, the car has won itself the cult following it deserves, and even early, high-mileage used examples will fetch four-figure sums. If you do choose to go down the Panda route, do be vigilant for rust on any cars you inspect: the little Fiat was somewhat prone to corrosion. You may need to bank on some rust treatment or even some completely new body panels at some point. As such, we'd definitely encourage you to take out a classic car insurance policy if you’re embarking on a restoration job.

Honda Accord

Honda's best-selling family car entered its second generation in 1981. And it came armed with some of the most desirable creature comforts of the age, including a shag carpet interior, a velour cabin trim, and various tastefully sited chrome accents. What the '81 Accord was most notable for, though, was the Electro Gyrocator, which was effectively the world's first automatic in-car navigation system.

So, the first sat-nav, then? 'Nav', yes; 'sat', no. Unlike today's sophisticated navigation systems, the Gyrocator didn’t use GPS satellites to pinpoint the vehicle's location. Instead, it had an ingenious solution all of its own. A helium gas gyroscope would detect movement and rotation, while a servo gear fed information to the Gyrocator, giving it accurate information on the car's position, speed of travel and distance travelled. The driver saw this information displayed on a transparent map, which scrolled across a six-inch, black and white screen. Really very clever stuff and, we'd imagine, fairly painstaking to install in a regular family car such as the Accord.

You could get your Mk2 Accord in silver, beige or sky blue – and in a standard version, itself well equipped, or a fairly luxurious EX model complete with air conditioning and electric sunroof. Oh, and you could choose between a four-door saloon and three-door hatchback form. Well equipped and typically bulletproof, the second-generation Accord sold well here in the UK, and continued the good work being done by its smaller Civic sibling in building Honda brand recognition here in Britain.

Classic car insurance from Lancaster

If you're the proud owner of a car produced during 1981, whether it's one of the models we've discussed or, say, a Citroen CX or Morris Ital – congratulations! You are now eligible to stop paying vehicle tax.

Your vintage vehicle may not need taxing anymore – but it certainly still needs insurance.

And, here at Lancaster, we are very well placed to help. Our many years of experience in the classic car insurance sector means that we are able to arrange insurance for a wide range of vehicles.

Why not contact us today to arrange your classic car insurance quote?

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.