Rachel Reeves’ car tax hikes cause thousands to cut down on driving

The report found that due to the cost-of-living crisis, alongside increased car tax contributions, many drivers have begun opting for cheaper alternatives to MOT repairs.

The cost of living crisis has prompted 90 per cent of respondents to keep their cars for longer before getting any defects looked at by professionals.

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Financial pressures have caused drivers to avoid getting MOT checks to save money

A further 51 per cent said they were exploring independent garages for more affordable servicing, while more than a third (38 per cent) were choosing not to authorise advisory repairs, prioritising essential over non-urgent work.

The shift towards more financially effective measures follows stark changes in driving costs this year as new Vehicle Excise Duty rates were introduced.

New car taxes were announced last year by Chancellor Rachel Reeves during the Autumn Budget, before coming into effect from April 1, 2025.

As part of the changes, some drivers had to pay car tax for the first time, while others saw their taxes double.

Drivers are required to get an MOT yearly to ensure vehicles maintain their roadworthiness

The VED hikes have resulted in significant costs for drivers based on their vehicle’s emissions output. For example, a car emitting between 76-90g of CO2 per kilometre would now be forced to pay £270, up from £135 last year.

Meanwhile, the most polluting vehicles (255g/km) have been slapped with the highest rates, with costs skyrocketing from £2,745 to £5,490.

A report released earlier this month revealed the escalating impact of car tax hikes, with 41 per cent of drivers fearing they would need to surrender their cars this year if travel costs continue to peak at unaffordable levels.

The research also showed growing interest by more than half of the surveyed drivers to consider ditching their vehicles in favour of public transport as a cost-saving option.

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The data also warned that filling up petrol and diesel vehicles could rise by as £20 this year, adding further financially punishing measures.

James Jackson, co-founder and CEO of Bumper, said: “The findings reveal a largely proactive approach to vehicle maintenance.

“However, the cost of living crisis has prompted shifts in consumer behaviour, with a significant portion of car owners looking for more affordable options, delaying non-essential repairs and using financial assistance to spread their servicing costs.”

While the cost increases have caused drivers to change their outlook towards vehicle maintenance, this could also result in failed MOT tests and more significant driving issues.

New car tax changes were introduced in April for all vehicle owners

In the UK, drivers must ensure their vehicle remains roadworthy at all times, with mandatory MOT inspections taking place annually.

Drivers who fail to meet the UK driving standards can face hefty penalties, with the police able to issue a fine of £1,000.

This could rise if the vehicle is deemed “dangerous” based on its last MOT, with the fine soaring to £2,500. They could also face penalty points on their licence and even a driving ban in more serious cases.

“Trust, cost and quality remain central to consumer decision-making, benefitting dealers nimble enough to adapt their aftersales propositions to the changing needs of their customers,” Jackson said.