Drivers Beware - New Laws That Could Cost You Money

With high fuel costs and taxation, driving in the UK is not a cheap business for your average driver and a range of new rules and regulations will come into force in 2017 that could further hit us in the pocket. Here is everything you need to know about the new regulations and how much they might cost you.

  frustrated driver  

Compensation Claims.

The government has announced a change to the way compensation payments for injuries suffered in car accidents are calculated. The change has been heavily criticised by insurers and motoring groups who believe the move could have a significant impact on car insurance premiums. Financial experts, PriceWaterhouseCooper, have estimated that the change could lead mean the average driver paying an additional £75 a year in car insurance premiums while young drivers could face premium increases of £1,000. Previously compensation payments were discounted by 2.5% but the new formula will actually increase payouts by 0.75%. This 3.25% change will be passed onto drivers via higher premiums.


Mobile Phone Penalties.

An increase in the number of road accidents caused by drivers using mobile phones has led to calls for action by the government. They have responded by doubling the penalties for using a mobile phone while driving to £200 and 6 black points. The change will come into force on March 1st and will likely lead to an increase in disqualified drivers, especially amongst those who have held their licenses for less than 2 years - these drivers face disqualification after 6 black points instead of the usual 12. Drivers who end up in court could face fines of up to £1,000 while bus and HGV drivers face fines of £2,500.

The laws can be confusing, even for those using a handsfree kit. While it is legal to use a handsfree kit, it is illegal to touch it while driving. It is also illegal to hold a mobile phone to follow a map or directions. Texting or checking social media is a complete no-n0. Our advice, better safe than sorry, don't touch your mobile phone at anytime while in car!


Speeding Fines.

The most serious speeding offences are to face harsher fines under new regulations due to come into force on April 24th. If you far exceed the speed limit and your case goes to court, you could end up with a fine equal to 150% of your weekly salary - up from the current cap of 100% of your weekly salary. Thats an expensive fine for shaving a few minutes of your trip. The new regulation comes into force on the 24th April.


Insurance Premium Tax.

Insurance Premium Tax is a bit like VAT, but is charged on a wide range of insurance products including, car insurance, home insurance and travel insurance. Over the past 3 years we've seen the IPT increase from 6% to 10% which has resulted in an increase in average insurance premiums by over 10%. While insurers are not obliged to pass on these costs, they usually do and the bad news for motorists is that the IPT is set to rise again, to 12% from the 1st of June 2017. Expect your next insurance renenewal to be a little bit more expensive.


Road Tax.

Vehicle Excise Duty (commonly known as road tax) is changing on the 1st April 2017. The new system will see drivers pay a one off charge for the first year based on the cars emission levels. The charge will range between £10 and £2,000. After year one all drivers will pay a flat fee of £140 for most cars (greener cars using alternative fuels will pay £130). Surprisingly it seems that greener cars may be the most affected by this change with some currently paying zero tax.

Luxury cars will also be more heavily taxed after April 1st. Drivers of cars worth more than £40,000 will pay a £310 surcharge on top of the rates above for the first 5 years their car is on the road. Luxury cars just got that little bit more expensive.