The automotive industry is undergoing significant changes that every driver should be aware of. From updates in taxation to new insurance systems, here’s a summary of the most important developments for motorists across the UK:
1. DVLA’s New Online Car Taxing Service
The DVLA has rolled out a new online service that simplifies vehicle taxing. For the first time, drivers can tax their vehicles without needing their V5C logbook or V11 tax reminder letter. The new system connects online registration and licensing systems, meaning those who have misplaced their documents no longer have to wait up to five days for replacements.
If you’re unsure whether your vehicle is taxed, you can use Regit’s free car tax checker.
2. New Vehicle Risk Rating (VRR) to Replace Traditional Insurance Groups
Starting in August 2024, the insurance group system for new cars will be replaced by the Vehicle Risk Rating (VRR). The VRR will assess cars based on five key factors—performance, damageability, repairability, safety, and security. The new system, introduced by Thatcham Research, aims to provide a more accurate reflection of modern vehicle risks.
Unlike the previous static scoring system from 1 to 50, the VRR is dynamic, meaning your insurance premiums may change as your car’s risk profile evolves. The VRR will run alongside the current system for 18 months before becoming the new standard for all vehicles.
3. UK Government Rules Out Pay-Per-Mile Road Pricing
Despite speculation, the UK government has confirmed that it will not introduce pay-per-mile road pricing, a proposed scheme to replace road tax and fuel duty with a pay-as-you-drive system. Concerns about tracking mileage, costs for heavy road users, and surveillance issues have put the idea on hold.
Instead, the government will introduce Vehicle Excise Duty (VED) for electric vehicles starting in 2025, while continuing efforts to phase out petrol and diesel cars by 2030.
4. Potential Fuel Duty Rise on the Horizon
While petrol and diesel prices have recently fallen to their lowest levels in three years—139.5p for petrol and 144.2p for diesel—the relief might be temporary. The Labour government is expected to raise fuel duty in its upcoming autumn budget.
The 5p fuel duty cut introduced in 2022 provided temporary relief, but its removal could see prices rise again, adding approximately £3.30 per tank for drivers. The RAC and AA have warned that a fuel duty increase could lead to “perma-high” fuel prices, impacting motorists, particularly those with lower incomes.
Stay tuned for more developments as these changes continue to unfold, and ensure you are prepared for any impact on your driving costs and vehicle maintenance.
