Thousands of families with older cars face paying an extra £245 for their road tax, it emerged last week. From next April, the government is scrapping the exemption for older cars from the highest rates of vehicle excise duty.

The move was in the small print of the March budget, but the full implications were only recognised last week.

In the 2006 budget, the then chancellor, Gordon Brown, introduced a new highest rate of duty - band G - but said that no car registered before March 23, 2006, would be affected.

However, under the new tax regime announced by Alistair Darling in the March budget, which will come into effect next April, there will be no exemption from the highest band - and the rates are going up.

Owners of family cars such as the Ford Galaxy, the Ford Zafira, the Renault Espace and the Volvo XC90 face an increase in duty of up to £245 by 2010.

A seven-seater Renault Espace 3.5 V6 Initiale auto, with a CO2 rating of 289g per km, currently avoids the top band G rate (£400) if it was purchased before March 23, 2006. Owners are charged only £210, the rate for cars in the next band down.

However, with the scrapping of the exemption, and the introduction of new charging bands next year, the vehicle would be in band M, costing the owner £440 next year and £455 in 2010.

Steve Fowler, editor of What Car? magazine, said: “It's a great thing that the government is encouraging us to buy greener cars, but to penalise people who bought cars before the green agenda had such a high profile, especially families that rely on their vehicles, seems very unfair.”

Here we answer your questions on the new rules.

What are the current

rules of duty?

There are seven bands ranging from A-G. Cars in the A category produce under 100g of CO2 per km and have no duty charge.

There are only two cars in this category: the Seat Ibiza 1.4 TDI 80PS Ecomotion M5 Diesel and the VW Polo 3/5 Door 1.4 TDI M5 Diesel. Cars on the highest band, producing over 226g of CO2 per km, pay £400 a year - unless they were bought before March 23, 2006.

What are the changes

to the car tax?

From next April, cars will be classified under 13 different bands ranging from A-M. A new higher-rate band for cars producing more than 255g of CO2 per km will be also be introduced.

The changes will be introduced in two stages. Next year, the most polluting vehicles will have a rate of £440. By 2010, the rate will increase to £455. The new tax regime will affect all cars registered after March 1, 2001.

It will also see the introduction of a one-off “showroom” tax for new cars by 2010. This will range from £115 to £950 for the most polluting vehicles such as Jaguars and Range Rovers. Those in the next band down will pay £750. This includes family cars such as Vauxhall Vectras, Mercedes M and E class estates, and Mitsubishi Shoguns.

Can I reduce my duty rate?

No. Although you can drive more efficiently and reduce emissions, you cannot change the tax band of your vehicle as this is set by the manufacturer. You can find your car's CO2 rating on vcacarfueldata.org.uk/ved.

Will this affect the value

of my car when I sell?

The increased tax bills will inevitably lower your car's value if it is in a higher tax band.

A Hyundai Lantra 1.6 GSI automatic registered in 2001 is listed as having a trade value of £850. Under the new rules, its value will fall 70% to £250, according to CAP, a car analyst.

Those with a personal contract purchase (PCP) may end up with negative equity. PCP allows you to buy a vehicle by paying off the capital on part of the loan and interest only on the rest. If you took out a PCP of £10,000 over three years and deferred £4,000, you would be paying interest on the £4,000 but capital and interest on the £6,000. If after the three years, the car is valued at £5,000, you can return the car, and still have £1,000 equity for your next PCP purchase.

However, if the value fell below £4,000, you would have to pay extra to settle the balance.

Are there any large cars

with low CO2 ratings?

There are plenty of cars which emit surprisingly low levels of CO2. The BMW X5, for example, which is a 4X4 diesel, emits 214g of CO2 per km. It is presently in band F, costing £210, but next year owners will have to pay £300 and £310 in 2010.

BMW's 5-series 318d, a saloon car, has a rate of 125g of CO2 per km. Owners currently pay £120 a year, but by next year the bill will decrease to £90. By 2010 the bill will be £95.

Another low emitter of CO2 is the Audi TT diesel coupé. This is a well known sports car capable of 0-60mph in 7.5 seconds, but unlike many of its rivals it produces only 140g of CO2 per km. Owners now have to pay £120, but in 2009 they will be charged only £110 and £115 by 2010.

If you are looking for a family car that is a low-carbon emitter, you can go for the Citroën C4 Grand Picasso 1.6 HDi VTR+ EGS. It can carry seven passengers but produces only 150g of CO2, costing owners £120 today and £125 by 2010. The rate will stay the same next year.

What about second-hand

cars?

The new rates only affect cars made after 2001, raising fears that the value of second-hand cars made after that date will fall.

Pre-2001 cars will pay a flat £200 fee, rising with inflation. It means you can own a high polluting car that is eight years old and pay less than half the tax of a new top-band car.