I think most people see owning a car as a necessity and a right. I doubt many would stop buying a car due to VED. If it was scrapped and replaced with higher tax on petrol, I think there would still be as many cars but people would be more cautious when using it thus reducing miles driven.I think this is a good reason to keep it as it is, the more it goes up the more low mileage car owners may think it's time to give up their motor and join car clubs etc... Fewer cars in existence!
If a car trip to the out of town shops costs £5 or £10 more some people would maybe think twice and walk to the local shops instead.