Major changes to driver's licence test costs, vehicle fees: What you need to know

The Government has announced major changes to the cost of getting a driver's licence, with expected cumulative savings for drivers of around $5.5 million per year.

But some vehicle fees are getting hiked from October 1, 2023, including the administration cost of renewing a car's rego.

Transport Minister Michael Wood said the new funding model would allow Waka Kotahi NZ Transport Agency to deliver its "regulatory functions to a high standard to ensure our road network is safe and efficient".

"The majority of fees that impact New Zealand drivers and businesses have decreased or remained unchanged. Of the charges that will increase the majority of these will increase by less than $10, and are charges that have a limited number of transactions each year.

The main reduction being touted by the Government is on the cost of trying to get a driver's licence.

Wood said that from October, the average driver will save $86 as they successfully move through the driver licencing system.

"The average cost of a learner licence will decrease by $20, a restricted licence by $35, and a full licence by $31," he said.

The total cost of each licence is made up of an application fee and a test fee. The cost of some tests are reduced if specific courses have been completed.

The application fee only has to be paid the first time someone attempts a test, but the test fee is paid everytime a test is sat. 

So for example, a learner licence has an application fee of $48.20 and a test fee of $45.70. The total $93.90 has to be paid when someone goes for their first test, but only the $45.70 has to be paid if they are unsuccessful and attempt it again.

However, Wood also announced the Government is removing resit fees for practical driver licence tests, which can be up to $87 per attempt. He said around half of New Zealanders are having to pay these when trying for their licence. 

He acknowledged the cost of the tests on top of other cost of living pressures can make things difficult for Kiwis.

"We’re anticipating these changes will cumulatively save drivers around $5.5 million each year. These savings will help ease the pressure on households while budgets are tight," Wood said

“Making driver licences more affordable will also support more people into work as many jobs require it."

National's transport spokesperson Simeon Brown questioned whether the full story was being told by the minister as the individual costs of a person's first attempt at some driver's licence tests are going up. 

"The reality is that fees are going up for people who prepare and pass their restricted licence on the first time they sit from $134 to $167," he said.

"This is a significant increase for people who pass their restricted licence on the first time they sit their restricted test."

The minister said the cost for the "average driver" is reducing as they successfully move through the graduated driver licencing system.

The current average fee paid is different to the cost of taking an individual test as some people have to take the tests (and therefore pay) more than once, increasing the average fee paid.

So by removing the need for someone to pay every time they resit the practical tests, as the Government is doing, the average fee will be reduced. 

For example, the cost of taking a restricted test is currently $134.80. Because 47 percent of individuals fail on their first time and have to redo the test multiple times, the average fee paid is actually $203.02. 

Under the new system, the cost of taking a restricted test will be $167.57. There will be no additional fees for resits, meaning the average will no longer be $203.02, but stay at $167.57 - the roughly $35 reduction the minister is speaking of.

Brown, however, says this means there is no longer a financial incentive for people to pass their tests.

Waka Kotahi said resit fees may discourage people from continuing to move through the licensing system to get a full driver licence. 

"Removing resit fees supports a wider government objective of providing better access to the driver licensing system and increasing overall road safety for everyone. However, this policy does not provide the cheapest option for some."

Following a review of Waka Kotahi's funding, the agency went out for consultation last year on driver licence and testing fees.

"The review found the average cost of getting or renewing a licence is currently set higher than the cost of providing the service, and this subsidises the cost of other things that are either undercharged, or not charged for. We want to change fees so they reflect the actual costs of providing the services," it said at the time.

"Reducing the average cost for each stage of a driver licence (learner, restricted, full), would make driver licences more affordable, and this should help improve access."

It also said that the cost of resitting tests causes some drivers to "stop taking tests but continue to drive".

While the cost of getting a driver's licence will reduce, other fees are increasing. 

For example, the administration cost of renewing a motor vehicle licence (rego) online will more than double from $4.10 to $8.66. The cost of registering a vehicle on the Motor Vehicle Register will also jump.

The full changes can be found here.