Pay-per-mile car tax changes will 'drive more motorists off the road' with 'serious implications'

A recent survey by car finance lender Carmoola revealed the extent of the financial strain on British drivers.

Nearly a third (29 per cent) of respondents reported having to reduce their driving in 2024 due to escalating expenses.

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The situation is particularly dire for younger generations with almost a third (30 per cent) of 17 to 24-year-olds and a quarter (25 per cent) of 35 to 44-year-olds indicated they are under financial pressure to sell their cars.

These findings suggest that the proposed pay-per-mile tax could exacerbate existing difficulties for many drivers across the UK.

Aidan Rushby, founder and CEO of Carmoola said: "The news about the introduction of a pay-per-mile road tax could exacerbate this trend driving more motorists off the road.

“It's clear that Brits are already struggling, and the new initiative, planned to launch in October, will have serious implications, especially for younger drivers and those living in rural areas who rely on their cars for essential activities like work and education.”

He added: “With limited public transportation options in these regions, such a tax risks pushing more people to the brink, making it even harder for them to maintain the mobility they need.

“It's crucial that any new policy is designed with these challenges in mind to avoid disproportionately impacting those who are most vulnerable."

Despite the challenges, Rushby noted that the new scheme could offer some control to motorists: "It's a challenging time, and traditionally, costs such as taxes are outside of motorists' control. However, this new scheme could change that.

“The amount you drive is something Brits can control, so while many drivers will struggle with the new initiative, others may benefit."

For those concerned about the potential impact of the pay-per-mile tax, Carmoolasuggested shopping around for insurance and breakdown cover.

“Carpooling or sharing fuel costs, and refinancing a car loan to a better rate can all significantly reduce the annual cost of motoring," Rushby stated.

The potential introduction of a pay-per-mile tax system comes at a time when many UK drivers are already considering selling their vehicles due to financial pressures.

A Carmoola survey revealed that a staggering eight million cars, representing 20 per cent of the UK's vehicle fleet, could potentially be sold due to escalating running costs.

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The proposed system could also see the average motorist facing costs of around £444 per year, while those in rural areas may see harsher bills increased by £600 for covering 10,000 miles annually.