Cannot see the issue.

If I buy and tax car on 1st Feb then reject it and return it to the dealer on the third I'll only get 11 months of tax back. For a car with low emissions the lost month is a nugatory amount; not saying it's not worth a try to get £10 back but there's a limit ti the effort £10 justifies.

OTOH once it's emitting over 150g of CO2 per Km its >£40 and significant to justify time etc spent.

Depends on the age of the car. All cars registered after 01 April 2017 have had a flat rate VED, currently £150 for petrol and diesel, £140 for a hybrid. Thats about £12.5 a month.

Cars costing over £40,000 pay and extra £350 a year for the first 5 years. Adds another £30 a month approx.

Under the previous system where it rose an the CO2 increased it could be an insignificant amount (i.e £0) or a very significant amount. but without knowing the VED rate of the car we cannot guess how much the OP stands to loose.

<< For a car with low emissions the lost month is a nugatory amount; >>

Just as an aside, Bromp, where did you get this 'nugatory' from ? I know it's a dictionary word, but I cannot recall ever seeing it in over 70 years, except in your posts :-) Sounds like civil service to me :-))

Cannot see the issue. When a car is sold or PX'd the transfer of ownership automatically generates a refund of the remaining tax to the last keeper. A cheque soon arrives after the acknowledgement of change of ownership.

It's change of registered keeper, not ownership, which triggers that - when a car is returned to a dealer for refund, no change of keeper occurs

Keeper, ownership is irrelevant in this case, they are just legal terms.

Since the current non-transfer VED system was introduced I have bought 4 cars and sold/PX'd 4 cars.

For the cars I have disposed of, like I said above a cheque for the remainder of the tax arrives a few days after the transfer.

The cars I have bought (new and used) the dealer has taxed them on my behalf before collection at the same time registering the cars in my name. They have given me a print off showing this has been done. If I had rejected any of those 4 cars the dealer would then have to put the car back into trade just like they would a PX which would trigger an auto refund. Also, if I had rejected a car I would also have to send back the small bit of the V5C that informs the DVLA that ownership has changed immediately ensuring i would not get any fines for actions after I had no responsibility for that car.

Don't destroy the new V5!

The dealer cannot put it back into trade status without it. What you should do is once you receive it, notify the DVLA yourself and then send the V5 to the dealer.

Some dealers are also withholding parts of refunds until they receive the V5 back to ensure people post them.