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Road-tax hike makes thousands of family cars almost worthless
Tens of thousands of cars will become almost worthless as a result of the decision to raise road tax on older models with higher carbon dioxide emissions by up to £245 a year.
Many families will find that they cannot sell their cars even though they are in good working order and no more than seven years old.
The Times revealed yesterday that the Treasury had quietly abolished the exemption from higher road-tax rates for cars that emit more than 225g of CO2 per km and were registered between March 2001 and March 2006.
CAP, which supplies the used car industry with data on residual values, said that many larger cars would be reduced to their scrap value because they would fall into one of the higher tax brackets being introduced for high-emission cars next April.
A Hyundai Lantra 1.6GSI automatic, registered in 2001, is listed as having a trade value of £850. But under the rules buried in the small print of last month's Budget, its road tax will increase from £210 this year to £300 next year and £430 in 2010.
CAP estimated that the road tax increase would cut 20 per cent, or £1,000, off the value of a 2001 Renault Espace 2LT Privilege people carrier.
Mark Norman, CAP's development manager, said: “When people find out that it could cost half a car's value just to tax it each year, its value will plummet. Many of these cars, particularly saloons, will be reduced to their scrap value. The sad thing is that perfectly usable cars will be scrapped, which could perversely increase overall CO2 because of the emissions from manufacturing new cars.”
Tens of thousands of cars will become almost worthless as a result of the decision to raise road tax on older models with higher carbon dioxide emissions by up to £245 a year.
Many families will find that they cannot sell their cars even though they are in good working order and no more than seven years old.
The Times revealed yesterday that the Treasury had quietly abolished the exemption from higher road-tax rates for cars that emit more than 225g of CO2 per km and were registered between March 2001 and March 2006.
CAP, which supplies the used car industry with data on residual values, said that many larger cars would be reduced to their scrap value because they would fall into one of the higher tax brackets being introduced for high-emission cars next April.
A Hyundai Lantra 1.6GSI automatic, registered in 2001, is listed as having a trade value of £850. But under the rules buried in the small print of last month's Budget, its road tax will increase from £210 this year to £300 next year and £430 in 2010.
CAP estimated that the road tax increase would cut 20 per cent, or £1,000, off the value of a 2001 Renault Espace 2LT Privilege people carrier.
Mark Norman, CAP's development manager, said: “When people find out that it could cost half a car's value just to tax it each year, its value will plummet. Many of these cars, particularly saloons, will be reduced to their scrap value. The sad thing is that perfectly usable cars will be scrapped, which could perversely increase overall CO2 because of the emissions from manufacturing new cars.”
