The rising cost of road tax could force tens of thousands of good cars off the road, research from vehicle data experts CAP has found.
The cost of taxing some seven-year-old cars is now around a third of the total value of the vehicle thanks to changes to Vehicle Excise Duty which were introduced in 2006 to penalise higher CO2 vehicles.
Cars registered since March 23 2005, with CO2 emissions between 226 and 255g/km of CO2 now cost £475 to tax annually, while cars than emit over 255g/km cost £490 a year.
A 2006 Renault Laguna 3.0 V6 24V Initiale Auto 5dr, valued at £1,375, now costs £475 a year to tax -- almost 35 per cent of its total value. It's a similar story with big-engined versions of the Citroen C5, Fiat Croma, Hyundai Sonata and Peugeot 407.
A 2006 Renault Laguna 3.0 V6 24V Initiale Auto, worth £1,375, now costs £475 a year to tax.
The danger, according to CAP, is that cars such as this are rapidly becoming worthless in the trade, despite the fact that they cause relatively little pollution because older, thirstier cars tend to be driven less than new ones.
Car running costs expert Mark Norman, of CAP, says that lowering VED rates for the most polluting cars of a certain age would prevent well-maintained vehicles being scrapped.
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."
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