London Congestion Charge Explained

What is changing - and why it matters now

From 2 January 2026 the London Congestion Charge rises from £15 to £18 per day. It is the first increase since 2020 and, crucially, it still sits below cumulative inflation. If you pay late, the next-day rate rises from £17.50 to £21. Alongside the price change, the biggest shift is for electric vehicles. The long-standing EV exemption ends on 25 December 2025, replaced by tiered discounts that depend on Auto Pay registration.

Understanding these adjustments is not just about pounds and pence - it is about planning. Central London congestion cost the capital an estimated £3.85 billion in 2024, or roughly £942 per driver. Without action, traffic would climb by thousands of vehicles each day. The charge remains a lever to keep the city moving while the network invests in greener, more reliable transport.

If you drive into the central zone, expect different outcomes by vehicle type. Electric cars receive a 25% discount via Auto Pay from January 2026, cutting the daily rate to £13.50. Electric vans, HGVs and certain quadricycles benefit from a 50% discount via Auto Pay, dropping to £9 per day. Residents inside the zone who registered by 1 March 2027 continue to enjoy a 90% discount, paying £1.80 per day, while new residents after that date will need an electric vehicle to access similar support over time. Low income and disabled users have protections until 2030.

Hours remain familiar but still catch out visitors. The Congestion Charge applies Monday to Friday 7am-6pm and weekends 12pm-6pm. It is separate from ULEZ, which targets emissions rather than traffic volume. Many EVs are ULEZ-exempt, yet they now contribute to managing congestion in the core.

Clarity helps you avoid penalties and plan your budget. A few minutes setting up Auto Pay can save you money all year.

Who should pay attention

If you commute into Westminster, the City or the West End by car or van, these changes affect your weekly outgoings and how you expense business trips. Company fleets and delivery operators running into the core should reassess route planning and vehicle mix, particularly the economics of switching to electric vans. Residents inside the zone will want to confirm their registration status and understand timelines for future eligibility. Occasional visitors - from contractors to families driving in on weekends - should know the hours, discounts and how Auto Pay works to avoid surprise charges.

Your choices at a glance

1. Register for Auto Pay to secure any eligible discount and avoid fines.

2. Switch to an electric car for a 25% Auto Pay discount from Jan 2026.

3. Upgrade to electric vans or HGVs for a 50% Auto Pay discount from Jan 2026.

4. Reroute or time your journey outside charging hours where possible.

5. Use public transport or active travel for central trips.

6. For residents, confirm your registered status before 1 March 2027.

7. Plan for potential annual price reviews after 2026.

What it could mean for your wallet

Short standout line: Auto Pay is now the gateway to every meaningful discount.

Who qualifies and when

Eligibility now hinges on vehicle type, registration status and timing. Electric vehicles no longer travel free from 25 December 2025. From 2 January 2026, electric cars receive a 25% discount via Auto Pay and electric vans, HGVs and quadricycles receive 50% via Auto Pay. Without Auto Pay you pay the full £18. Residents living inside the zone who register by 1 March 2027 keep a 90% discount, paying £1.80 per day regardless of vehicle type. After that date, new residents will generally need an electric vehicle to access future resident support, while low income and disabled users have extended protections until 2030. Charging hours are Monday to Friday 7am-6pm and Saturday to Sunday 12pm-6pm, with one daily charge per vehicle when driving within the zone during those times. The Congestion Charge is separate from ULEZ, which focuses on emissions and can apply citywide even when the Congestion Charge does not.

If you are weighing an EV purchase or van upgrade, finance can smooth the upfront cost so that monthly repayments align with expected savings on congestion charges and fuel. As a UK-based retail finance broker, Kandoo can help you compare lending options tailored to vehicle type and business use, so you avoid overpaying for credit while benefiting from the new discount structure.

How to get set up quickly

1. Check your number plate covers the CCZ on your route.

2. Confirm charging hours for your planned arrival and departure.

3. Create a TfL account and enable Auto Pay for your vehicle.

4. Add a valid payment card and set up notification preferences.

5. Verify discount eligibility by vehicle class and residency.

6. Plan journeys to minimise days entering the zone.

7. Review monthly statements and correct any missed entries.

Upsides and trade-offs

Before you lock in your plan

Expect periodic reviews. The Mayor and TfL may adjust charges annually, often alongside Tube fares, with movements in line with inflation plus up to 1% or less. There is no automatic formula, but prudent drivers and fleets should forecast modest yearly increases. Keep the distinction between the Congestion Charge and ULEZ clear. You might be exempt from ULEZ in an EV yet still pay the Congestion Charge during its operating hours.

If you rely on deliveries, consider a phased shift to electric vans to capture the 50% discount from 2026 and mitigate later reductions from 2030. For residents, check your registration status early to secure the 90% rate at £1.80 if eligible. Finally, set up Auto Pay. It reduces admin, helps avoid penalties and, for EVs, unlocks every available discount.

Next step suggestion: Review your last three months of central London trips and estimate the cost difference from January 2026 with and without Auto Pay.

Alternatives worth considering

1. Travel outside charging hours or use park and ride where practical.

2. Switch to public transport for peak-day central trips.

3. Use cargo bikes or e-bikes for short urban deliveries.

4. Consolidate deliveries to fewer days to cut charged entries.

5. Arrange remote meetings to reduce non-essential travel.

Common questions

Q: What are the charging hours and days? A: Monday to Friday 7am-6pm and Saturday to Sunday 12pm-6pm. A single daily charge applies per vehicle on days you drive within the zone during operating hours.

Q: Do electric vehicles still pay the Congestion Charge? A: Yes. From 25 December 2025 the full EV exemption ends. From 2 January 2026, EVs receive tiered discounts only if registered for Auto Pay.

Q: How much do EVs pay from January 2026? A: Electric cars pay £13.50 per day via Auto Pay, a 25% discount. Electric vans and HGVs pay £9 via Auto Pay, a 50% discount. Without Auto Pay the rate is £18.

Q: What about residents inside the zone? A: Registered residents continue to receive a 90% discount, paying £1.80 daily if registered before 1 March 2027. New residents after that date face tighter EV-linked criteria.

Q: Is this the same as ULEZ? A: No. The Congestion Charge tackles traffic in central London. ULEZ targets emissions across a wider area. You may owe one, both or neither depending on your vehicle and route.

Q: Will the price keep rising every year? A: It may be reviewed annually, often in line with inflation and wider fare decisions. There is no automatic increase but planning for adjustments is sensible.

Q: What happens if I pay late? A: The next-day payment rate rises to £21 in 2026. Miss that and you risk a Penalty Charge Notice.

How Kandoo can help

Kandoo is a UK-based retail finance broker. If you plan to upgrade to an electric car or van to benefit from the Congestion Charge discounts, we can help you compare finance options from a range of lenders. Get a tailored quote, align repayments with expected savings and make the switch with confidence.

Important information

This article is for general guidance only and is not personal financial advice. Rules and prices can change. Check the latest details with Transport for London before travelling or making a purchase. Finance is subject to status and affordability.