> more expensive cars have more advenced automation and safety features, so their use should be encouraged

That would indeed be the long term play, but as most democratically elected governments, they have a 4 year window in which they don't want to be known as "The guys that cut away a ton of welfare, so people could get cheaper cars", since the immediate effect would be a loss of money. Unless of course, people started buying more new cars, but that is speculative, and a gamble that not many of the bigger parties seem willing to make :(