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TFL Congestion Charge Changes Coming in 2026: What UK Car Dealers & Motor Traders Need to Know

Running A Car Dealership 16th December 2025

From the 2nd January 2026, Transport for London (TFL) plans to introduce significant changes to the London Congestion Charge, including increased daily rates and new tiered discounts for electric vehicles (EVs). These changes will impact anyone moving vehicles in and out of central London - particularly car dealerships, used-car traders, delivery drivers, and motor-trade businesses.

This blog will go over what changes are being introduced to the Daily Congestion Charge; new rules for the Cleaner Vehicle Discount; how the new changes will affect car dealers & motor traders; and plans for the currently existing incentives.

Changes to the Daily Congestion Charge

Commencing 2nd January 2026, TFL plans to raise the Congestion Charge for all drivers entering central London.

New Daily Charge Rates

£18 (up from £15) when paid on the day of travel or in advance.
£21 (up from £17.50) when paid within 3 days after travel.

Residents' Discount

If you are a Congestion Charge Residents' Discount holder, you will still get a 90% discount and pay the daily charge of £1.80.

There are no plans to change the current charging times.

Changes to the Cleaner Vehicle Discount

As originally planned, the existing 100% Cleaner Vehicle Discount will end on the 25th December 2025.

However, to continue encouraging the adoption of EVs while managing congestion, TFL plans to introduce a tiered EV discount system.

These discounts apply only to electric vehicles (EVs) registered for Auto Pay.

Phase 1 - From 2nd January 2026

25% discount for electric cars. (Auto Pay required)
50% discount for electric vans, HGVs, and quadricycles. (Auto Pay required)

Phase 2 - From 4th March 2030

12.5% discount for electric cars. (Auto Pay required)
25% discount for electric vans, HGVs, and quadricycles. (Auto Pay required)

The other UK cities with congestion or emissions zones have not announced plans to mirror London's 2026–2030 congestion charge changes, but increasing pressure to reduce emissions could lead to similar schemes in the future.

How These Changes Affect Car Dealers & Motor Traders

The increased congestion charges will raise expenses for car dealers when crossing into the zone when delivering customer cars, trade to trade handovers or collecting cars from auctions. As a dealer you are able to choose how to deal with this in your business; either absorbing the extra cost and not passing it on your customer, potentially reducing profit margins; passing on the additional costs to the customers or adjusting your delivery routes to avoid the congestion zone. Especially for high volume dealers, logistics and operational planning will become more complex with these congestion charge changes.

MotorDesk car dealer software can help in this area with it's many features focusing on organising your team and suppliers - being able to easily pass on notes and instructions to service providers and delivery drivers.

Could Other EV Incentives Be Phased Out?

When the change in congestion charges was first announced, it indicated the Government's shift on incentives for EV vehicles. The recent Autumn Budget in November 2025, announced that from 2028 a pay per mile road charge would be implemented for EVs and plug-in hybrids.

Despite this move, several incentives remain in place to support EV uptake including the Electric Car Grant, grants for home and workplace charge installations and tax advantages available for businesses and employees using workplace car schemes and salary sacrifice arrangements.

If incentives continue to decline, the overall cost of EV ownership may rise. Any rise in overall car ownerships costs will effect the buying decisions of your customers.

How MotorDesk can help you

MotorDesk car dealer software not only helps you organise your team and service providers but also lets you quickly access market valuations for vehicles, factoring in key details such as mileage. By using these tools together, you can easily determine whether an EV is worth adding to your stock, and once you decide, you can immediately update your service providers so they can prepare and condition the vehicle for delivery.