In association with Renault Business
Every car class's cheapest model for BIK tax – from small cars to SUVs
From hatchbacks to SUVs, there are more company car options than ever – but what will cost the least in BIK tax? These are the cheapest fleet cars in every class...
Getting a new company car is always a cause for excitement, but amid the thrill you’ll also want to keep down your monthly Benefit-in-Kind taxation costs. That’s why it’s vital that you search out the cheapest company cars for BiK tax.
And if you’re in the market for a company, and electric vehicle is by far the cheapest way to do it, even if BiK tax on EVs is rising slightly.
How we categorise “cheapest” for 2026
Working out how much company car tax you’ll pay on a certain model is comparatively easy. For a start, you can just go to the What Car? Company Car Tax Calculator. That allows you to find the fleet vehicle you want, and it’ll do all the hard work for you.
If you prefer doing it the old-fashioned way, then the formula is simple: The formula is: P11D value × BIK rate × your tax rate = annual company car tax.
In other words, work out the car’s P11D price (list price including VAT, options, and delivery), multiply it by the BiK percentage rate, which is based on the car’s CO2 output, and finally multiply that figure by your personal tax band (20%, 40% or 45%).
The tax system was updated in April 2026, with higher bandings for some vehicles, including EVs, although electric vehicles remain much cheaper than their combustion-engined rivals. At the same time, the Expensive Car Supplement for EVs was raised to £50,000, allowing more vehicles to avoid the surcharge.
Here, we list the cheapest company cars you can opt for, broken down into the engine (or electric motor) you're looking for, to make each car easy to find.
We’ve covered the four main categories of car that fleet users choose from – small cars, family cars, executive cars and SUVs – and offered options for fuel types within most of those groups. We’ve also listed each car’s price, CO2 figure and monthly benefit-in-kind (BIK) tax figure for 20% and 40% taxpayers.
And just so you know you’re getting a good option – and not just a cheap one – we’ve selected only cars that have scored at least three stars in our new car reviews. You can follow the link to each model's full review to find out more about it.
Cheapest small electric car for BIK tax
Electric Fiat Grande Panda 44kWh Pop (7kW charger)
What Car? rating 4/5
P11D price £20,930
Monthly BIK tax at 20% £13.92
Monthly BIK tax at 40% £27.92
The Fiat Grande Panda Electric is competitively priced and costs very little in BiK taxation each month. It also offers a range of almost 200 miles, plus acceptable acceleration: 0-62mph is covered in 11.0 seconds. The Grande Panda majors on being light and easy to drive, and offers good cabin space for five adults plus their luggage.
Fiat Grande Panda Electric review
Runner up: Dacia Spring 70 24.3kWh Expression Hatchback Electric
What Car? rating 2/5
P11D price £15,925
Monthly BIK tax at 20% £10.58
Monthly BIK tax at 40% £21.25
The Dacia Spring is one of the very cheapest cars on sale, and therefore one of the cheapest company cars, but it does come with compromises. For a start, the performance is on the pedestrian side of… pedestrian. The range isn’t great at 186 miles, and the car has a one-star Euro NCAP crash test rating. Only consider if you can overlook all that, and your daily motoring life fits in with its shortcomings.
Runner up: Renault 5 Urban range 40kWh evolution
What Car? rating 5/5
P11D price £22,930
Monthly BIK tax at 20% £15.25
Monthly BIK tax at 40% £30.58
The Renault 5 electric is a company car par excellence. It offers a tremendous blend of grown-up driving manners, aggressive pricing (and therefore company car taxation rates), and it has a good infotainment set-up. Performance is brisk enough, and the range is a fair 193 miles. It manages to be nimble and comfortable. There’s plenty of space for the front-seat occupants, although space behind is a little tight.
Cheapest electric family car for BIK tax
MG4 EV
What Car? rating 5/5
P11D price £29,930
Monthly BIK tax at 20% £19.92
Monthly BIK tax at 40% £39.92
The MG4 offers family motoring for the sort of price you’d usually expect to pay for a petrol-powered hatch. Better still, it's a four-star car and was a category winner at the 2024 What Car? Awards. So, it’s good. It was updated in 2026 and gained a classier interior and much-improved infotainment. Shame it’s not better to drive.
The PHEV alternative: Volkswagen Golf 1.5TSI eHybrid Match
What Car? rating 4/5
P11D price £36,320
Monthly BIK tax at 20% £42.33
Monthly BIK tax at 40% £84.73
The VW Golf upholds its ongoing reputation as a superb all-rounder, because it offers not only all-electric running for more than 80 miles, but also the back-up of a petrol engine for longer trips. It’s also spacious, comfortable and well equipped, while feeling a cut above its rivals.
Cheapest electric small SUV for BIK tax
Hyundai Kona Electric 65.4kWh Advance
What Car? rating 4/5
P11D price £34,935
Monthly BIK tax at 20% £23.25
Monthly BIK tax at 40% £46.58
The Hyundai Kona Electric is an exceptionally well rounded electric SUV, even if it doesn’t actually stand out in any one area. It offers good range, a lot of space for five occupants and their luggage, and it’s also extremely easy to use.
Cheapest electric family SUV for BIK tax
Volkswagen ID4 Pure 58kWh Essential SUV
What Car? rating 3/5
P11D price £36,930
Monthly BIK tax at 20% £24.58
Monthly BIK tax at 40% £49.25
The Volkswagen ID.4 is a good choice as a company car if family figures highly in your life. This is because it has a genuinely spacious interior that’s designed to deal with all that family life can throw at it. It’s well equipped and easy to drive, too. It also avoids the Expensive Car Surcharge on annual VED. Just make sure you can live with the infotainment system, which isn’t the best.
Cheapest electric executive car for BIK tax
Tesla Model 3 RWD
What Car? rating 5/5
P11D price £37,925
Monthly BIK tax at 20% £25.25
Monthly BIK tax at 40% £50.58
The Model 3 absolutely revolutionised the company car market when it was launched. It didn’t so much move the goal posts as dig them up and run away with them. It’s great to drive, it’s well equipped, it’s pretty practical, and it can go a long way between charging stops.
Cheapest electric luxury car for BIK tax
Volvo ES90 Single Motor Extended Range 92kWh Plus
What Car? rating 3/5
P11D price £67,495
Monthly BIK tax at 20% £45.00
Monthly BIK tax at 40% £90.00
The Volvo ES90 represents the company getting serious about electric company cars. So, the ES90 is quiet and comfortable, which you’d expect from a luxury machine. The interior feels classy and the performance is very strong indeed. It’s well equipped, too, and can do 400 miles on a charge. Pity the rear seat area isn’t more luxurious, and the ride isn’t better.
Top tips for lowering your BiK bill
If you’ve been told you’re getting a new company car, you might be having mixed feelings. After all, you’re getting a shiny new car, but you’ll face a monthly Benefit-in-Kind tax bill on it.
However, there are ways to keep that BiK to a minimum.
1) The type of fuel your car runs on has a huge beating on your company car tax. And that’s why you should choose an electric vehicle if you can. These emit no CO2, so sit in the lowest tax bandings.
2) Stay away from the options list. This is because the cost of extras is included in the car’s P11D price, so the more extras you choose, the higher the price, and therefore the more tax you’ll pay.
3) If it works for your daily duties and family life, consider a single-cab pick-up. These are taxed differently from company cars, and can be cheaper than a petrol or diesel company car.
4) Skip the company car and use a pool car instead. If you use a pool car for business trips, and that car stays at the company’s premises overnight, then you won’t be liable for BiK tax on it.
5) Salary sacrifice on an EV can also reduce your tax bills because not only will you be liable for the low BiK on an EV, but you’ll also be liable for less income tax because your gross salary will be slightly less.
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Read more: Company car tax rules explained >>
Read more: How to pay less company car tax >>
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FAQs
Fully electric vehicle Electric (EV) remains the cheapest fuel for Benefit-in-Kind taxation. EVs are liable for 4% tax in 2026/27, although this will rise to 5% in 2027/28.
Rarely, and not when you compare like with like. PHEVs have BiK bandings of between 5% and 16%, whereas EVs are on 4%.
This largely depends on the fuel the car uses. For example, you could have a lower-spec petrol Ford Puma and a high-spec electric Puma Gen E. The electric model costs much more, but will cost you far less in BiK taxation because it sits in the 4% tax band, while the petrol model sits in the 30% band.
