What's Changing for Motorists
The UK Autumn Budget 2025 introduced several measures relevant to drivers:
A pay-per-mile tax scheme for electric vehicles: from 2028-29, battery-electric cars are set to pay 3p per mile
The freeze on fuel duty is extended for another year
Income tax thresholds are frozen, reducing disposable income
What This Means for Drivers
For EV owners: The new pay-per-mile tax will add to running costs from 2028 onwards.
For petrol/diesel drivers: The maintenance of the fuel duty freeze is some relief, but no new relief means costs may rise with inflation.
Implications for the Repair and Insurance Industry
Repair / Aftermarket
Increased running costs may lead some motorists to delay non-essential repairs
The shift in tax burden potentially makes older internal combustion vehicles relatively more attractive
Repair workshops may need to reassess service offerings
Insurance
Higher costs of ownership could mean motorists cut back on extras
The longer-term shift to EVs may be slowed, affecting insurers' assumptions around fleet composition
Key Take-Aways
Motorists face higher running costs from 2028 via the new mileage tax for EVs
Repair businesses need to prepare for cost-sensitive customers
Insurers have to monitor shifting risk profiles
