An inspection by Driving and Vehicle Licensing Agency officers and police found 126 cars without tax discs in Whitehawk, Brighton.
They discovered many of the vehicles were also not registered with the DVLA, which is illegal.
Now the Government department is to visit the estate with its car crusher in the New Year.
It has the power to crush any vehicle which is not registered.
Sergeant Tony Lumb, of Brighton police, told the Whitehawk Crime Prevention Forum yesterday: "We did right from the top of the estate and almost every single road. We found a lot of untaxed vehicles or unregistered vehicles.
"It's very difficult to get money from these people and people think these people are going to get away with it, but we have invited the DVLA back with their mobile crusher.
"If we can't trace a vehicle's owner because it is not registered the DVLA has the power to clamp and crush."
Des Turner, Labour MP for Kemp Town, who is the chairman of the forum, said: "These vehicles are potentially lethal because they are often uninsured and not tested."
John Commons, a forum member, said vehicle tax dodging might seem like a minor crime but could have serious consequences in accidents.
He said: "Anyone who drives an untaxed vehicle invalidates their insurance if they have some.
"They are virtually lethal if you get hit by one and crushing is the obvious answer."
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