What you need to know...
A prominent UK automotive leader has urged the government to reduce vehicle tax rates for so-called “modern classic” cars, in a move aimed at easing financial pressures on owners and recognising the unique usage patterns of older vehicles.
The call comes amidst growing debate over vehicle excise duty (VED) and environmental policy, as the industry grapples with balancing heritage preservation and carbon reduction targets.
Mark Roper, Managing Director of Hagerty UK, is advocating for a 50 per cent reduction in VED for cars aged between 20 and 39 years, arguing these vehicles are being unfairly taxed in comparison to newer, high-mileage models.
Background on Vehicle Tax Rules
Currently, the UK exempts vehicles over 40 years old from paying vehicle excise duty, recognising their limited road use and historical value. Cars younger than this threshold, including those aged from 20 to 39 years, are subject to full annual charges.
These “modern classics” often escape incentives offered for both historic cars and new, low-emission vehicles, placing them in a unique category within current tax regulations. The VED structure was designed to help maintain roads and promote the transition to lower-emission vehicles.
This framework has come under scrutiny as the number of vehicles from the 1980s and 1990s with collector status steadily increases.
The Case for Modern Classic Cars
Advocates for a revised approach to vehicle taxation assert that cars in the 20–39-year age bracket contribute minimally to road wear and environmental harm. Mark Roper, Managing Director of Hagerty UK, stated, “These are cars that have already had their carbon journey.
They've been recycled through different ownerships, and mean people don’t have to go out and buy a new car.” Unlike newer vehicles used for commuting or everyday errands, owners of modern classics tend to drive them sparingly, often for leisure.
According to Roper, “They're not used for the school commute or the trip to work, they're used for enjoyment, a drive into the countryside or to the pub on a Sunday.”
Industry Perspectives and Concerns
The classic car industry argues that current tax policy overlooks the distinct qualities of modern classics. The sector insures vehicles ranging from the early 20th century to the cusp of becoming recognised as true classics. Industry representatives maintain that the limited use and enduring lifespan of these cars mean their environmental impact is comparatively modest.
Roper maintains the principle that “a reduction in vehicle excise duty is a fair way to recognise that these cars are driven infrequently and that their carbon has been amortised over decades.”
He further noted that most modern classic vehicles have undergone multiple changes in ownership, extending their life cycle and supporting the circular economy.
Environmental and Social Arguments
Proponents of a lower tax rate for modern classics often reference environmental objectives. By keeping older cars on the road longer, advocates claim that carbon emissions associated with manufacturing new vehicles can be partially offset.
Additionally, since these cars are seldom driven, their annual emissions are significantly below those generated by daily-use vehicles. Roper explained, “If the purpose of VED is road upkeep and reducing emissions, then driving less achieves both of those objectives,” emphasising the dual benefits to infrastructure and the environment.
Policy Context and Potential Changes
As government policy increasingly targets low-emission transport and incentives for electric vehicles, questions have arisen about whether tax treatment of older vehicles remains fit for purpose.
The call from Hagerty UK comes at a time of heightened debate about taxation fairness, sustainability, and how best to preserve the country’s automotive heritage. To date, the government has not indicated imminent plans to review VED rates for the 20–39-year-old vehicle segment.
Government priorities remain focused on lowering emissions and upgrading the national vehicle fleet, but campaigners hope policymakers will consider targeted relief for lower-usage vehicles in this age bracket.
Final Summary
The campaign led by Hagerty UK highlights ongoing tensions between tax policy, environmental objectives, and the cultural value of older vehicles. While existing rules offer exemptions for historic cars, there is growing consensus among industry leaders that modern classics also deserve recognition as part of the nation’s motoring heritage.
Whether the government will consider a reduction in VED for this segment remains uncertain. The issue raises broader questions about how public policy can balance sustainability goals with the preservation of historic and culturally significant vehicles.
For those tracking vehicle tax reforms and classic car trends, the Pie app can support up-to-date, reliable information on policy changes and financial implications.
