Tax rules mean cars meet early grave

Tax disc worth a third of the value of some 2006-on cars

Published:  14 June, 2013

THE disproportionate cost of a tax disc could soon force tens of thousands of good cars, registered since March 2006, off the road and onto the scrapheap.

The cost of taxing some cars that are only seven years old can represent as much as a third of their value, according to CAP.

The problem stems from changes to VED bands which were introduced in 2006 to penalise higher CO2 vehicles.

It means that cars registered since March 23 2006, with CO2 emissions between 226 and 255g/km now cost £475 to tax, while cars that emit over 255g/km cost £490 a year.

The danger now, according to CAP, is that such cars could rapidly become worthless in the trade, even though they cause relatively little pollution because older, less economical, vehicles tend to be driven fewer miles.

The trade guide suggests that lowering VED rates for the top two CO2 brackets after a certain age, would prevent the scrapping of well-maintained vehicles with many years of serviceable life remaining.

Mark Norman, of CAP, highlights the issue by pointing to examples of higher CO2 vehicles which now cost between 28% and 34% of their total value just to tax for a year. 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. Scrapping serviceable cars for the sake of a tax disc makes a mockery of environmental taxes as owners already tend to limit their mileage because the cars are relatively uneconomical. Throw in the carbon footprint of building the cars that replace those that are scrapped and the environmental justification for taxing these cars off the road collapses".

The cost of a tax disc ranges between zero for ultra-low emission and some classic vehicles, up to £1,065 for the first year of tax on new vehicles emitting over 255g/km of CO2.

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