Drivers could be forced to scrap cars as Rachel Reeves' tax hike makes vehicles 'worthless' overnight

Hemma Visavadia
Tue, 31 Mar 2026 11:06:11 +0000

Drivers have been warned that Rachel Reeves' car tax changes, coming in this week, could force thousands of older vehicles off UK roads almost overnight.

From tomorrow, higher Vehicle Excise Duty (VED) rates will hit a range of popular models, with some drivers facing annual tax bills of up to £760.

New data has now suggested that many of these cars are already being scrapped, due to the tax now costing more than the vehicle itself.

Experts warned the changes risk creating a "tax trap" for motorists, particularly those relying on older, affordable family cars.

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Analysis from Car.co.uk showed a sharp rise in scrappage rates for vehicles in the highest VED bands (L and M), with several well-known models hardest hit.

Among those facing annual tax bills are the Audi TT 1.8T, which will see taxes rise from £735 to £760, while the Chrysler PT Cruiser, Ford Galaxy 2.3, Ford Mondeo V6, Jaguar X-Type 2.0 Auto, Land Rover Freelander 2 i6, Saab 900 Convertible, Subaru Forester 2.5 XT, Vauxhall Zafira VXR and Volkswagen Golf R32 will also face similar hikes.

Many of these cars, which were once staples of UK roads, were now found to be worth less than the cost of taxing them for a year.

William Fletcher MBE, CEO of Car.co.uk, explained how the situation is becoming increasingly unsustainable for drivers.

He explained: "These vehicles are now being taxed at the same rate as high-end luxury cars worth many times more. For many owners, it simply doesn't make financial sense to keep them on the road."

The impact has already been seen in scrappage data, with the Land Rover Freelander 2 i6 recording the biggest surge, with a 550 per cent increase in vehicles being scrapped between 2024 and 2025.

Other models also saw sharp rises, including the Subaru Forester 2.5 XT (166.7 per cent), Volkswagen Golf R32 (125 per cent) and Vauxhall Zafira VXR (50 per cent). More recent figures suggested the trend is accelerating as the April deadline approaches.

Scrappage quotes for the Volkswagen Golf R32 jumped by more than 323 per cent between the final quarter of 2025 and the first quarter of this year.

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The Land Rover Freelander 2 i6 followed with a 233 per cent increase, while the Ford Galaxy 2.3 rose by 130.8 per cent. The Jaguar X-Type and Audi TT also saw notable increases.

Mr Fletcher said vehicles like the Freelander often retain their usefulness for families, meaning owners delay scrapping them until costs suddenly spike. "With road tax rising sharply, many drivers are now reaching that tipping point," he said.

He warned that the full impact of the changes may not yet be clear to motorists. "Many people won't realise how much their tax has increased until they receive the bill," he added. "At that stage, scrapping the car may be the only realistic option."

The findings follow wider concerns about the cost of living, with households already under pressure from rising bills. For families relying on older, larger vehicles such as the Ford Galaxy or Vauxhall Zafira, the increase in VED could prove particularly difficult to absorb.

New 2026-2027 car tax rates for vehicles registered between March 1, 2001, and April 1, 2017

Up to 100g/km - Remains at £20

Between 101 and 110g/km - Remains at £20

Between 111 and 120g/km - Remains at £35

Between 121 and 130g/km - Rising from £165 to £170

Between 131 and 140g/km - Rising from £195 to £200

Between 141 and 150g/km - Rising from £215 to £225

Between 151 and 165g/km - Rising from £265 to £275

Between 166 and 175g/km - Rising from £315 to £325

Between 176 and 185g/km - Rising from £345 to £360

Between 186 and 200g/km - Rising from £395 to £410

Between 201 and 225g/km - Rising from £430 to £445

Between 226 and 255g/km - Rising from £735 to £760

Over 255g/km - Rising from £750 to £790