New rules aimed at stopping people abandoning unwanted cars will come into effect on December 22, the Transport Department announced on Tuesday.

The practice of automatically cancelling the registration of a vehicle that hasn't been licensed for two years will come to an end and instead owners will be issued a notice telling them to either renew their licence, or cancel the registration after scrapping the vehicle or shipping it out of Hong Kong.

If owners fail to take action within three months of receiving such a notice, they can be hit with a fine of HK$10,000 or jailed for three months, with tougher punishments for repeat offences.

Anyone who decides to ignore a fine could find any future driving licence renewals refused, or that officials won't transfer ownership of the vehicle or issue a licence for any other vehicle in the owner's name.

"Individual vehicle owners who have a genuine difficulty in taking the required actions within the three-month notice period or have reasonable grounds for not licensing their vehicles may apply for an exemption," the department said in a statement.

It added that grounds for an exemption include vehicles awaiting spare parts for maintenance, cars older than 30 years that are kept as part of a private collection and not used on the city's roads, and vehicles for sale that are held by a dealer.

"Even when a vehicle remains unlicensed or is granted an exemption, it will remain registered under their [vehicle owner's] name and they have to continue to bear all legal liabilities associated with it," a department spokesman said.