A £735 tax trap means hundreds of thousands of cars on UK roads are being 'written off' as people refuse to pay the charges.
Some motorists are reportedly reluctant to make the transition to newer electric models, with the consequence being that they're clinging onto their older vehicles.
Some of them have larger engines - and if the owner decided to acquire a similar vehicle now they would face a crushing 'first year' additional charge depending on emissions of up to £5490.
Some believe it is more environmentally sound to maintain an older car on the road rather than purchase something new which has high manufacturing emissions.
However, the Telegraph reported that some of the most sought-after cars from 20 years ago are now virtually worthless and being scrapped because it costs too much to tax them.
It means that cars which produce more than 225g of CO2 emissions per kilometre are hit by Vehicle Excise Duty (VED) - with those producing 201-225g/km paying £430, 226-255g/km £735 and Over 255g/km £750.
And the bands are set to rise with the £735 going up to £760 and the £750 over 255g/km expected to hit £790 from April 2026.
But the Telegraph reported that it's not just high end SUVs with huge engines being hit - it's ordinary family cars like Ford Mondeos, Saabs, VW Golfs and Vauxhall Zafiras.
People are reportedly scrapping their cars due to the enormous tax bill each year - which rivals how much the car is worth. However, the Guardian revealed that manufacturing a medium-sized new car could produce over 17 tonnes of CO2e – nearly equivalent to three years of gas and electricity consumption in a typical UK household
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Mike Berners-Lee and Duncan Clark explained: "With this in mind, unless you do very high mileage or have a real gas-guzzler, it generally makes sense to keep your old car for as long as it is reliable – and to look after it carefully to extend its life as long as possible. If you make a car last to 200,000 miles rather than 100,000, then the emissions for each mile the car does in its lifetime may drop by as much as 50%, as a result of getting more distance out of the initial manufacturing emissions."
The majority of pre-2001 vehicles are simply taxed based on engine capacity. Anything under 1,549cc attracts a yearly levy of £229, whilst motors with cubic capacity exceeding this threshold – whether it's a Lada or a Lamborghini – face an annual charge of £360.
Following this period, the emissions-based bands were introduced, though vehicles registered between March 2001 and 23 March 2006 had their maximum rate limited to the Band K level, currently standing at £430.
Experts say this is making certain models almost worthless, leading to them being scrapped or exported to countries where buyers welcome these cut price cars, many of which are on the cusp of being classics.
While owners of exotic supercars and V8-engined 4x4s might not get much sympathy for the hefty tax bill, the rules also penalise far more mundane sporty models such as the Audi TT 1.8 and Vauxhall Zafira VXR, larger-engined versions of the Ford Mondeo and even a Volkswagen Golf.
Drivers wanting the extra grip of all-wheel-drive might think a Land Rover Freelander or Subaru Forester would be perfect and cheaper to run than a large 4x4, but some models still fall into the top bands and could cost more than £800 a year to tax.
Wayne Lamport runs Stone Cold Classics in Kent, which deals mainly in cars from around this era. He told the Telegraph: “We have to be very careful when we buy stock which is 2006 or more recent. Cars such as a Jaguar X-Type are great, but who wants to pay more than £700 for the annual tax? It doesn’t take many years of ownership to spend the value of the car.
“One example is the Chrysler PT Cruiser. A lot of people love them and think it will be a novelty, but they go off the idea when they realise the annual cost of taxing it. A lot of these cars are virtually unsellable.”
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