Urgent warning for drivers who own cars made between 2001 and 2017

A tax alert has been issued to driverswho own cars with specific registration plates. The warning is targeted at motorists with vehiclesmanufactured between 2001 and 2017. The alert follows a Vehicle Excise Duty (VED) overhaul under the Labour Party.

For older cars, including modern classics registered between March 1, 2001 and March 31, 2017, the system remains emissions-based, and those emitting less than 100g/km will continue to pay nothing, while for everyone else there's a £10 increase compared to 2024 rates.

Car insurance company Hagertystated: "That means owners of older cars emitting more than 255g/km of CO2 will pay £735 a year for the privilege of driving on Britain's beautifully-maintained road network. Ahem." It comes after UK drivers were warned over 'avoiding' a road instead of having to follow new rule.

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The firm added: "Cars registered before 1 March 2001, that were still younger than 40 years old on 1 January 2025, are charged based on engine capacity. That's £210 a year for those under 1,549cc and £345 for anything above. The Government considers any car older than those to be a "historic vehicle" and is therefore exempt from paying road tax, or, indeed, being required to have an annual MOT test."

Drivers who have vehicles registered afterwards pay under a different system. For the first year of registration, they have to pay a "showroom tax", which is based on the vehicle's CO2 emissions.

John Cassidy, managing director of sales at Close Brothers Motor Finance, has highlighted that some buyers are already deterred by the sparse battery charging network for electric vehicles (EVs), reports Chronicle Live. Lorna Macpherson, a car finance specialist at Ocean Finance, pointed out that although tax reforms make eco-friendly cars more economical to operate, the soaring costs of motoring may prevent drivers from making the switch.

She said: "For petrol and diesel cars, an increase in VED means higher running costs for owners, making newer, more efficient cars even more attractive." Yet, Lorna observed that "with rising interest rates on car finance" coupled with the financial strain felt by Britons, "many will hold on to their current vehicles for longer rather than upgrading".

In addition, a warning has been sounded for millions of UK motorists who use E10 fuel. The shift to E10 petrol is driving up fuel expenses for drivers and road users across the country, as recent alerts have indicated.

The E10 initiative was backed by the previous Tory government as a step towards environmental conservation. Nonetheless, research from the University of Warwick has disclosed that the Renewable Transport Fuel Obligation, which includes E10, has led to increased fuel prices.

The study revealed that over the past five years, the RTFO has added an average of 3.5p per litre to unleaded petrol and six pence to diesel prices. The research, conducted by Dr Nikhil Datta and Johannes Brinkmann and published through the CAGE Research Centre, attributed the increase to rising biofuel costs and escalating RTFO obligations.

E10 is a biofuel blend consisting of 90 per cent conventional unleaded petrol mixed with 10 per cent ethanol. The standard unleaded fuel available prior to the introduction of E10 contained a maximum of 5% ethanol and was suitable for any petrol-powered vehicle without issues or the need for modifications.