Chancellor Rachel Reeves has come under growing pressure after hiking car taxes pushed more drivers into considering giving up their vehicles due to high costs.
New Vehicle Excise Duty rates, which came into force on April 1, have made it much more expensive to own many older cars, especially higher emission petrol and diesel models.
As a result, drivers across the UK are starting to turn away from driving altogether, with online searches for “scrap my car” hitting 545,840 last month, up almost 20 per cent from the month before.
Experts warned that many people can no longer afford to keep their cars on the road, including Saul Turner, who said the tax increases are hitting hardest those who can least afford them.
He said: “Since the VED hikes on April 1, the annual tax bill for many older, high emission vehicles has become a disproportionate percentage of their market value.
“For families holding onto these vehicles because they cannot afford an upgrade, the financial burden is becoming impossible to justify.”
For example, drivers of popular family cars registered between 2006 and 2017 will now pay around £760 a year in road tax under new measures announced by the Chancellor at last year’s Autumn Budget.
This equates to roughly £25 more than last year, but for older cars, registered between 2001 and 2006, tax has risen to as much as £445, experts explained.
The new car taxes announced at the Autumn Budget added roughly £25 more to drivers’ tax bills
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PA/DVLA/X
These increases come at a time when other costs are also rising, namely fuel prices from the Iran war and repair costs.
Mr Turner said: “Hence, scrapping your car becomes the only logical exit. This shift is already visible, a near 20 per cent rise [in searches].
“Even before the current fuel crisis and tax hikes, our research showed the average car owner spends over £4,903 throughout their car’s lifetime.”
For drivers who decide to scrap their car, experts explained that it is important to do it properly and follow the suggested steps.
Drivers have been opting to scrap their vehicles due to high costs and taxes
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BRADFORD COUNCILDrivers should gather their V5C logbook, MOT records, and a form of ID, which can make the process quicker and may help you get a better price.
Drivers must also use a licensed Authorised Treatment Facility, which is a legal requirement, with motorists who use an unlicensed company still being held responsible for the car.
Experts added that motorists should also remove all personal items from the vehicle before it is collected and ensure the car is easy to reach.
After the car has been scrapped, drivers must inform the DVLA and could be entitled to a refund for any full months of road tax left.
On average, drivers will receive £250 for scrapping their vehicle | PA
Mr Turner added: “The amount you’ll get depends on a few factors, including the car’s weight, its age, and even the current price of steel.
“A common mistake people make is assuming they’ll only get the ‘scrap’ price. It’s always worth asking if your car has parts that can be salvaged and reused; the final figure could be significantly higher.
“It has been illegal to pay cash for scrap metal since 2013; any reputable service will pay via bank transfer.”