The end of tax exemption for older cars might not lead to effective CO2 reductions

The UK treasury is going to remove the Vehicle Excise Duty (VED) exemption on older cars (in this case, "older cars" means those registered between March 2001 and March 2006). When the exemption was instituted, the intention was to avoid economic damage to owners who already owned cars that polluted more than 225 g of CO2/km. However, the Treasury now says that it would be good for these cars to be off of British roads and is encouraging owners to purchase more fuel-efficient cars. Therefore, good-bye exemption.

However, the National Franchised Dealers Association (NFDA) states that this measure will not be effective, because owners of such cars will face difficulties when they try to sell these cars. Older, dirtier vehicles will be unattractive to potential buyers, and so will have lower trade-in values. This will make these cars more likely to be scrapped than sold, thus not really reducing the UK's CO2 output figures, NFDA claims.

[Source: Retail Motor Industry Federation]

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