Car owners will be able to have their old vehicles scrapped free from the start of 2007 under a new initiative which stems from a European directive.
The scheme aims to stop the practice of dumping old vehicles
From 1 January motor manufacturers will be responsible for disposing of their own brands when they are not needed.
Science and Innovation Minister Malcolm Wicks called it a "positive development for the environment and car owners".
An estimated two million vehicles are scrapped every year - a process which often comes at a cost for the owner.
The aim of the scheme is to ensure old cars are disposed of at authorised centres in an environmentally sound way.
Manufacturers will issue owners with a certificate of destruction once the car has been disposed of.
Firms behind the production of the vast majority of vehicles have arrangements in place with one of two service providers - Cartakeback and Autogreen.
Drivers still also have the option of taking their car to an independent authorised treatment facility. Many are listed on the website Recycleyourcar.
Mike Austin-Dodds, Autogreen general manager, said the used cars are drained of oil and fluids which are reprocessed, while tyres are shredded - often for use in playground surfaces. And metal from the car's body is sent to dealers for shredding.
He pointed out that metal is valuable and many car dealerships will take old cars for free, or even pay for them, as it is highly sought after in countries such as China and India.
However, he added: "The legislation is to make sure vehicles are dealt with in an environmentally friendly manner and to make sure they appropriate routes to deregister the car from the DVLA database.
"Otherwise it will still be registered to the last owner."
Meanwhile, the science minister praised the new drive.
Mr Wicks said: "There is already an 85% target in place to recover scrap cars, and the free take-back will help us achieve it.
"With such an extensive network of facilities in place to receive scrap cars, there is now an increased incentive for cars to be treated responsibly."
He told the BBC that old cars and vans would be disposed of in an "environmentally friendly" way.
"It is a good deal for car owners and it is a good deal for the environment," he said.
"We don't want these old bangers left in streets and left in fields. Most of the public are responsible and I think they'll welcome this."
Mr Wicks said that in rural areas people could arrange to have their vehicles collected from their homes - again, free of charge.
The minister added that similar collection schemes would be applied to disused cookers, fridges and computers later in the year.