A third of motorists now buy their tax discs online, generating more internet sales than the UK's biggest online retailer, Tesco.
The Driver and Vehicle Licensing Agency (DVLA) said 273,500 motorists buy their tax discs electronically every week with £4.2m generated every day, compared with 250,000 weekly online orders to Tesco generating £3.6m per day.
On the busiest day in March 2007, £9.9m was generated in tax paid online, and to date, 12.5 million of 33 million UK vehicles have been taxed online.
The agency says the main reason for the growth is convenience - transaction times are just four minutes and customers do not need paper copies of their insurance or MOT certificates. They enter a reference number printed on their reminder letter and other details are checked electronically.
Andrew Rhodes, head of electronic customer services said, "It is convenience that is driving this growth.
"The ease of an electronic service, coupled with the fact that you do not need to find paper copies of your MOT and insurance certifications, makes the new service a popular choice."Comment on this article: firstname.lastname@example.org