Cost of tax discs could force cars off the road

A study by vehicle data expert CAP has revealed that the cost of taxing some seven-year-old cars is now around a third of their total value.

CAP said that it believes that the problem stemmed from changes to Vehicle Exercise Duty (VED) bands, which were introduced in 2006 to penalise higher CO2 vehicles.

This means that cars registered since March 23 2006, with emissions between 226 and 255g/km now cost £475 to tax.

A 2006 Renault Laguna 3.0 Initiale Auto with 237g/km now costs £475 to tax - almost 35 per cent of its value - while a 2006 Citroen C5 3.0 Exclusive Auto also costs £475 to tax, which is more than 33 per cent of its value.

According to CAP, the danger is that such cars would quickly become worthless, despite producing relatively low emissions, because older, less economical vehicles tend to be driven less.

CAP has called on the Government to lower VED rates for cars that fall into the brackets L and M after a certain age in order to prevent a waste of vehicles that do relatively little harm to the environment. 

A spokesman for CAP said that scrapping serviceable cars for the sake of a tax disc "makes a mockery" of environmental taxes, because owners already tend to limit their mileage because the cars are relatively uneconomical.

He said: “We are now in the crazy situation where perfectly good cars have become uneconomical to own because the cost of taxing them could soon approach half their car’s value.

“This means more and more cars will become unsalable and will have to be scrapped long before the end of their useful life.”