Car tax changes introduced by the Chancellor in the Autumn Budget caused car sales to drop across the used vehicle market.
According to new research, the tax changes caused second-hand sales of petrol, diesel, electric and hybrid models to fall following the November Autumn Budget.
The decline in average daily sales has now suggested a serious slant in consumer confidence due to new tax obligations.
Under the measures announced by the Chancellor, electric vehicles would soon be subject to pay-per-mile road taxes for the first time, marking a clear shift in previous policies which favoured cleaner cars.
Alastair Campbell, from Marketcheck UK, said: "Our data shows that used car sales slowed marginally across all fuel types following the Budget, with electric and hybrid vehicles seeing the most noticeable dip.
"While the decline isn't dramatic, it suggests a degree of short-term caution in the market - this has starker in alternative fuel segments, which may be more sensitive to tax or incentive signals from changing Government policy."
He warned that the announcement around pay-per-mile taxes had a "noticeable impact" on the market, with pre-Budget daily sales reaching 598 across the used car market.
But just 10 days after the tax hike, daily sales of electric vehicles dropped to 540, marking a 9.70 per cent decrease.
Reports showed clear drops in car sales across the second-hand market 10 days after the Budget announcement
|PA/GETTY
Meanwhile, sales of used petrol cars dropped by 1.88 per cent from 5,466 10 days before the Budget to 5,363 afterwards, potentially due to fuel duty changes.
From September, the Government will begin to remove the temporary 5p fuel duty cut, with a 1p increase, followed by 2p in December and 2p from March 1, 2027.
RAC head of policy Simon Williams said: "Drivers will be relieved the Chancellor has decided to keep the 5p duty cut in place for now as it saves them more than £3 a tank. But this relief will be very short-lived, given the staggered increase from next September."
Meanwhile, diesel prices dropped 0.5 per cent from 3,024 to 3,009 following the Budget announcement.
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Hybrid cars saw sales decline 5.04 per cent from 952 to 904 following the announcement of new pay-per-mile taxes. Under the new rules, hybrid cars will have to pay both fuel duty and 1.5p per mile from 2028.
Official Treasury documents detailed: "Today, drivers of petrol and diesel vehicles pay tax on how much they drive through fuel duty at the pump, while drivers of electric vehicles currently make no equivalent contribution.
"If we do nothing, then by 2030, around one in five car drivers are expected to pay no fuel duty at all, while other motorists will continue to contribute an average of £480 a year."
Hybrid cars will be taxed at new pay-per-mile rates from 2028
| PAThe document warned that, given all cars cause congestion and wear and tear on the roads, "this is not a fair outcome".
The Treasury added: "The Government is firmly committed to supporting a successful transition. This is key to supporting UK automotive manufacturers and to meeting our net zero goals.
"Therefore, the Government will reinvest the majority of the money raised in the early years of the tax into specific measures to help consumers choose EVs and to bolster British industry."