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Motorists are being priced out of affordable ULEZ-compliant second-hand cars
Many hard-up residents won't be able to buy cars before August zone expansion
Auto Trader says there's just 5,150 charge-avoiding used cars for sale in London
TfL estimates 200k drivers of non-compliant cars will be hit by August expansion

Updated: 07:51 EDT, 20 February 2023

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Between a rock and a heard place: Londoners face a shortage of cheap used cars to replace older motors that will be hit with £12.50 ULEZ charges when the zone expands in August

Hard-up Londoners face a shortage of cheap used cars to avoid being hit by the planned expansion of the Ultra Low Emission Zone in a matter of months, according to new analysis.

The average cost of compliant petrol and diesel cars is £15,000 and £20,000, respectively.

Sadiq Khan's controversial extension of the ULEZ boundary will encapsulate all 32 London boroughs from August 29, as part of the Mayor of London's bid to boost air quality.

Anyone driving into the zone in a vehicle that fails to meet the emission requirement is stung with a daily charge of £12.50.

Khan has come under fire for expanding the charge at a time when there is both a cost of living crunch and used car prices are at record highs.

Transport for London (TfL) estimates that more than 200,000 drivers of non-compliant vehicles will be affected by the expansion, with many of these motorists now frantically on the hunt for cheap ULEZ-compliant motors.

However, there's just 5,150 ULEZ-compliant cars on sale in London for £5,000 or less, according to a new report from Auto Trader.

The online vehicle marketplace – which is used by around four out of five UK vehicle retailers – says petrol and diesel cars that adhere to the zone's rules are being advertised for average prices of £15,000 and £19,991, respectively.

For those thinking about buying a used electric car to avoid ULEZ charges, the average price of one for sale in the capital is currently a staggering £36,102.

This poses a huge dilemma for low-income households, who are those most likely to own non-compliant older cars due to the increasing cost of second-hand motors, especially in recent years.

Average used cars prices are currently at record levels after supply chain disruption caused by the Covid-19 pandemic cut the number of new vehicles produced in the UK last year to the lowest since 1956.

This has seen demand for second-hand cars across Britain soar in the last two years, pushing the average advertised price to a whopping £17,880 this month.

That compares to an average price of £13,600 in February 2020 - an increase of 32 per cent.

Auto Trader's Erin Baker says the Sadiq Khan's £2,000 ULEZ scrappage scheme launched last month is a 'drop in the ocean' for low-income drivers who need to replace their non-compliant older vehicles

While TfL has recently launched a £110million scrappage scheme to offer financial support to those who ditch their older polluting cars, it offers a paltry £2,000 to drivers who scrap their motors.

Six cheap cars that dodge ULEZ charges

With London's ULEZ on the way, residents in the capital's 32 boroughs face the agonising decision between paying out £12.50-a-day to use their non-exempt cars or forking out for newer - considerably more expensive - models that meet emissions requirements.

However, there is a cheaper way of getting around London Mayor Sadiq Khan's plans to force more drivers to pay to use their vehicles.

Classic car experts say Londoners willing to put in some research can identify older models that are exempt from ULEZ's daily charge and - granted you can get your hands on one - could be an affordable and more entertaining way to continue driving in the capital for the time being.

We've already done exactly that. This is Money editor Simon Lambert pinpointed a sub-£3,000 older motor on the verge of 'modern classic' status that wouldn't cost him a penny in ULEZ as a daily driver in London... and then bought it.

> Read our list of six ULEZ-dodging cheap cars under £3k

The scheme is also only available to those living within the 32 London boroughs and people can only apply for the scheme if they are receiving certain low income or disability benefits.

Auto Trader has already questioned the value of the scheme, saying the average price being paid for non-compliant petrol cars for sale in London today is £3,999, while non-compliant diesels are going for £8,400.

Auto Trader's Erin Baker said: 'When the average price of a used car is £18,000, a £2,000 scrappage scheme is a drop in the ocean for low-income drivers in outer London who want to avoid ULEZ payments.

'Drivers looking for cheaper ways to beat the tax are also struggling.

'With the impact of the Covid pandemic likely to keep used car prices high for some time, the lack of affordable options for those on tighter budgets is a real worry in a cost-of-living crisis.

'Many of those who can't use public transport will be put in an impossible position.'

RAC head of roads policy Nicholas Lyes said: 'While cleaning up London's air is unquestionably the right thing to do, the next ULEZ expansion comes at a time when many households are struggling with high bills in the cost-of-living crisis and simply can't afford to switch to a compliant vehicle, especially in what is currently a very expensive second-hand market.

'The mayor should consider a more generous scrappage scheme or a means tested TfL-backed discounted leasing scheme for those who need to use their vehicles daily.'

Reports of a shortage of cheap ULEZ-compliant cars with the ULEZ expansion just six months away is likely to increase wide-spread objection to Sadiq Khan's plans.

While the London Mayor has vehemently defended his decision to extend the zone in August, residents, commuters and MPs have criticised the timing of the move with the country embroiled in a cost of living crisis and consumer purse strings tightening.

A TfL-commissioned report by consultant Jacobs published in May 2022 warned of a 'disproportionate' impact on low-income households 'due to their lesser capacity to switch to a compliant vehicle and/or to change mode'.

Recent research by the Financial Conduct Authority also shows that three out of 10 UK adults have £1,000 or less in savings.

Last week, a collation of five councils - the boroughs of Bexley, Bromley, Harrow, Hillingdon, and Surrey County Council - launched their own legal challenge to block the ULEZ expansion.

It also emerged over the weekend that Downing Street could even step in to delay the expansion, with civil servants said to be considering whether Mr Khan's move to enlarge the zone overreaches his authority as mayor of London.

The Greater London Authority (GLA) Act of 1999 gives the government the power to veto legislation put forward by the mayor which are 'inconsistent' with nationwide transport policies.

Under plans put forward by Sadiq Khan, the ULEZ would be expanded from the centre of London to include all of the city's 32 boroughs

The ULEZ boundary will extend to the outer limits of all 32 London boroughs from 29 August and see the emission charging zone grow four times larger in size

A spokeswoman for the mayor told the PA news agency that the ULEZ expansion is 'absolutely necessary' to reduce deaths from 'toxic air'.

She added: 'The mayor has been clear that the decision to expand the Ultra Low Emission Zone London-wide was not an easy one, but with around 4,000 Londoners still dying from toxic air every year it is absolutely necessary.

'Eighty-five per cent of vehicles in outer London are already ULEZ-compliant.

'For those that aren't, the mayor has announced the biggest scrappage scheme yet – £110 million – to help small businesses, charities and Londoners who need it most amid the cost-of-living crisis, including low-income and disabled Londoners.

'Businesses and charities can also apply for a grant to retrofit, rather than replace, certain vehicles.'

For diesel cars and vans to avoid the ULEZ charge they must generally have been registered from September 2015, while most petrol models registered after 2005 are exempt.

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