The hike in annual fees could be a serious blow to cash-strapped families with experts suggesting three simple solutions could cut down charges.

Andy Wood, spokesperson for Tax Natives explained that switching vehicles or meeting up with a financial advisor could be the best options for those unsure what to do.

Andy explained: “Choosing a nearly new or low-emission car could help if you're worried about rising VED rates. 

“Cars in lower emissions bands come with lower tax costs, which could save you money in the long run. 

“It’s also a good idea to chat with a financial adviser or tax expert to see how you can manage these costs as part of your overall budget."  

According to experts at Pete Barden, standard VED rates will rise in line with Retail Price Index (RPI) inflation from April.

The update means annual fees are expected to increase from £190 to £195 per year. 

The biggest rise comes from first-year VED rates which are set for a massive overhaul in 2025. 

Petrol cars emitting over 255g/km of CO2 will see their first-year VED rates double from £2,745 per year to £5,490. 

The same is said for models emitting between 226 and 255g/km of CO2 with fees up from £2,340 to £4,680. 

Electric car owners will pay £10 in the first-year before switching to the standard rate afterwards. 

There are also concerns that the expensive price tag of middle-market EVs means many more will be affected by Expensive Car Supplement (ECS) fees. 

This is an extra £410 charge applied over a five-year-period for models valued at over £40,000.