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 people are reportedly not wanting to make the switch to newer electric models with the result being that they’re hanging onto their old vehicles.
Some of them have larger engines, and if the person decided to get a similar vehicle now, they would face a crippling ‘first year’ extra charge depending on emissions of up to £5490. Some believe it is more environmentally friendly to keep an older car on the road rather than buy something new which has high manufacturing emissions.
However, the Telegraph reported that some of the most desirable 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 normal family cars like Ford Mondeos, Saabs, VW Golfs and Vauxhall Zafiras. People are reportedly scrapping their cars due to the huge tax bill each year, which rivals how much the car is worth.
However the Guardian reported that producing a medium-sized new car may generate more than 17 tonnes of CO2e – almost as much as three years’ worth of gas and electricity in the typical UK home. Mike Berners-Lee and Duncan Clark wrote: “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.”
Most pre-2001 cars are simply taxed according to the engine size. Anything below 1,549cc is taxed at £229 a year, while cars with a cubic capacity above this – whether it’s a Lada or a Lamborghini – are charged £360 annually.
After this the emissions level bands kicked in, although cars registered between March 2001 and 23 March 2006 had the maximum rate capped at the Band K rate, which is currently £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.”
For the latest money saving tips, shopping and consumer news, go to the new Everything Money website.
