Motorists across the UK have been warned to brace for stricter car insurance rules, following the government's announcement of a new pay-per-mile tax system. Industry experts predict that insurers will intensify their scrutiny of drivers' annual mileage estimates, with significant consequences for those who provide inaccurate figures.
Pay-Per-Mile Plan Puts Mileage Under the Spotlight
The warning comes directly from Graham Conway, Managing Director at Select Car Leasing. He stated that the Chancellor's pay-per-mile scheme, unveiled on November 26, will place drivers' annual mileage declarations under intense examination. This heightened oversight, he argues, should serve as a major alert for every motorist regarding their insurance policy.
"You might assume that insurance providers have no way of checking how many miles you're actually travelling each year, but you'd be very wrong," Mr Conway explained. He emphasised that with the proposed new EV tax further monetising driver mileages, all motorists should expect more rigorous inspection from their insurance companies as a direct result.
How the New Tax and Insurance Scrutiny Will Work
The new levy, which will be separate from the standard Vehicle Excise Duty (VED), is scheduled for launch in April 2028. According to current proposals, which are still under consultation, drivers will estimate their mileage for the coming year and pay either a lump sum or spread the cost.
At the end of the tax year, drivers must submit their actual mileage. This will be verified via an MOT certificate for older vehicles, or collected professionally for cars under three years old. Any additional mileage beyond the estimate will incur an extra charge, while overpayments will be refunded, as confirmed in official Budget documents.
Consequences for Inaccurate Mileage Declarations
Mr Conway issued a stark final warning to drivers: "Be honest with your annual mileage calculation or prepare to face the consequences." The direct link between the new tax regime and insurance practices means inaccuracies could lead to serious issues, including policy invalidation or increased premiums.
The core message for UK drivers is clear: the landscape for car ownership is changing. The forthcoming pay-per-mile tax, set to monetise every journey, is expected to have a ripple effect, prompting the insurance industry to clamp down on mileage discrepancies with renewed vigour.
