Tax alarm for classic car owners

Motorists are going to have to pay road tax whether their cars are on the road or not This has led classic car owners -who traditionally put their cars away for the winter and bring them out again when spring returns - to rally against the impending arrival of this "possession tax".

The idea of an extra £135 a year for a road fund licence will not necessarily worry owners of a vintage Rolls or Bentley, who already expect to pay dearly for their hobby.

But £135 on top of the cost of a garage, standard running costs, repairs and insurance is a significant extra charge for anyone who owns a car that spends a significant part of the year off the road.

That includes those whose hobby is endlessly tinkering with a much-loved Mark I Cortina, the ageing Boy Racer with a Ford Capri, or even the pensioner who cannot bear to part with his ageing "Auntie" Rover or Jowett Javelin, as well as the many thousandsof members of classic car clubs, like the Americana Mersey Cruise, whose cars are for show rather than regular use.

Avid collectors who have acquired a number of cars over the years will be particularly hard-hit. If the tax is applied to cars in scrapyards, many of the wrecks that still provide a vital source of spares to keep classic cars on the road will also be scrapped, forcing collectors to look for expensive remanufactured parts, if they are available, and making the cost of preserving most current classics prohibitive.

The vast majority of so-called classic cars, which nowadays could be anything pre-1975, are worth between £1,000 and £5,000, and the extra costs could well force owners of thousands of much-loved classics to give them away, or even scrap them.

Since Britain has arguably the richest history of any car-making country, with at least 30 independent marques still making cars into the second half of the 20th century, the potential loss of heritage and history is serious, quite apart from the financial penalties that classic car owners and collectors face.

The possession tax is intended to punish defaulters who drive everyday cars without paying for a road fund licence. Back in 1980 the Department of Transport timidly suggested that the only sure way to stop an estimated million motorists a year driving cars without paying the road tax was to tax their cars whether they were on the road or not.

The suggestion was howled down as grossly unfair to everyone who lawfully kept cars off the road, in storage or under repair, and it was quickly dropped.

Efforts to identify and fine drivers who kept cars untaxed on the road were stepped up, but the idea of a possession tax. has now been revived with a vengeance as a revenue-raising measure, along with the likely abolition of regional vehicle licensing offices, to be replaced by a system of licensing at dealers' showrooms.

Classic car clubs have alerted their estimated 50,000 members, and the specialist classic magazines have encouraged their members to write to the Driver and Vehicle Licensing Agency.

Anyone who contacts the DVLA has been promised a personal copy of the detailed proposals when they appear.

Owners of heavy goods vehicles have already secured an exemption. Car dealers and museums look set to follow suit. Scrapyards may also be exempted.

The best classic car owners can hope for is a concessionary rate for cars made before, say, 1970, or which are are insured for a limited mileage, although it is hard to see how this could be properly monitored.

Possession tax is not the only threat to classic car values, which have barely begun to recover from the impact of the recession.

The chairman of Ford UK, Ian McAllister, is keen for the Government to follow the lead of several other countries and pay owners to scrap old bangers, provided of course they use the money to buy new cars. There is also the looming threat of legislation,from Brussels if not from London, aimed at pricing four-star petrol off the market or imposing pollution controls that even the best-kept classic cars could not meet.

Small wonder that the price of classic cars like E type and XK Jaguars and even Morris 1000s, which became cult items in the late Eighties, are still 25 per cent below their peak, although they have shown some signs of recovery in the last 12 months. Cars that had never attained cult status suffered less in the recession but have shown no signs of recovery since.

The upside is that a good classic car that has been well maintained now represents remarkably good value for someone who wants a car that may cost a few hundred pounds a year more to run and repair, but costs a lot less to buy than a new car.

A decent classic car can cost a couple of thousand plus tax and MOT test, but barring a serious engine or structural failure it will still be worth the same in a year's time, while a new car will have depreciated by more than a classic cost in the first place.