He said that many perspective used car buyers had yet to work out the impact of the changes, which will see many cars made between March 2001 and March 2006 that produce over 226g/KM of CO2 shift from band F to newly created L or M bands, attracting an annual £415 road tax, up from the current £210.

“As prices for older cars reduce over time, the tax burden comes into greater focus for prospective buyers, affecting demand and values,” said Rushmore. “Such a sharp rise in VED could well have implications for the used car market in the coming months and years, but much will depend on customers understanding of the changes,” he said. His comments come as ACEA, the European Automobile Manufacturers' Association called on European Governments to harmonise their CO2-based vehicle taxation systems. It said that although most EU governments used CO to grade car tax, the variety of systems, which made offering appropriate cars for individual markets difficult, and could actually penalise some cleaner models using technologies that weren't recognised by individual countries' tax laws. ACEA is calling for a so-called 'linear' system, where universal charges for tailpipe CO2 emissions are levied without particular fuels or engine technologies being favoured. Last year EU legislators rejected attempts by the ACEA to delay laws favouring cars that produced less than 120g/km of CO2.