Whether you're running a family car, commuting to work or thinking about changing your vehicle, the Chancellor's latest Budget includes several announcements worth knowing about.

We've looked at the key motoring changes and what they could mean for your household budget, both now and in the years ahead.

Fuel duty cut extended until July 2027

There's some welcome news for petrol and diesel drivers, with the Government extending the existing 5p-per-litre fuel duty cut until 1 July 2027.

The planned inflation-linked increase to fuel duty has also been deferred until that date, helping to limit additional pressure on fuel costs in the short term.

While the price you pay at the pump will still depend on factors including oil prices and retailer pricing, extending the cut should provide some breathing space for drivers who rely on their cars every day.

Help with electric car charging costs

For drivers considering an electric vehicle, the Budget includes additional support aimed at reducing the cost of public charging.

The Government has announced £100 million over the next two years to help bring down prices at local, lower-powered public charging points. This is particularly relevant to drivers who cannot charge at home and rely on on-street charging.

From spring 2027, the measures are expected to save drivers who rely on this type of charging around £150 a year on average.

For anyone weighing up whether an electric car could suit their lifestyle, charging access and running costs remain important factors to consider alongside the vehicle's purchase price and driving range.

Electric car pay-per-mile tax: what's happening?

The planned Electric Vehicle Excise Duty (eVED) remains on track for introduction in April 2028.

Under the announced proposals, drivers will pay a mileage-based charge of 3p per mile for fully electric cars and 1.5p per mile for plug-in hybrid vehicles.

The Budget confirms that the Government is continuing work on how the system will operate, including a tool to help motorists estimate their mileage and an optional system using compatible vehicle connectivity.

Although these charges won't begin immediately, they're worth factoring into longer-term ownership calculations if you're considering an electric or plug-in hybrid car.

It's also important to remember that this proposed charge is separate from the existing Vehicle Excise Duty (VED), commonly known as road tax.

Car tax rates set to increase in April 2027

The Budget confirms that Vehicle Excise Duty rates for cars, vans and motorcycles will increase in line with the Retail Prices Index (RPI) from 1 April 2027.

The amount of road tax you'll pay depends on your vehicle and the rules that apply to it, so it's worth checking the relevant rate when comparing your options for a new car.

When working out the overall cost of your next vehicle, remember to look beyond the purchase price. Road tax, fuel or charging, insurance and your expected mileage can all affect how much a car costs to own.

Higher mileage rates for people who drive for work

There is also a change for employees and self-employed people who use their own cars or vans for business journeys.

The tax-free mileage rate is being increased to 55p per mile for the first 10,000 business miles, with a rate of 35p per mile above that threshold from April 2027. The first 10,000-mile rate is being made permanent.

This could be helpful for people who regularly use their own vehicle for work, although the amount someone can claim will depend on their circumstances and the applicable rules.

Thinking about changing your car?

The Budget is a useful reminder that choosing your next car isn't just about the price you pay upfront. It's also about finding a vehicle that suits your everyday needs and makes sense for your budget over the time you own it.

At Forces Cars Direct, we help serving and ex-military personnel access discounts on a wide range of new cars from leading manufacturers.

Whether you're looking for a practical family car, something for a longer commute or considering making the switch to electric, our team can help you explore your options and understand the discounts available to you.

Browse our new car offers here

Budget information in this article is based on announcements made on 28 October 2026. Measures and implementation details may be subject to further guidance or legislation.