Recommendation with Minister

Review of Vehicle Risk Rating

The Minister for ACC would like your feedback. Should Vehicle Risk Rating be kept?

This proposal is now closed. Thanks for your feedback. We’ll have a decision from the Government in December.

Vehicle Risk Rating (VRR) applies to most passenger cars. 

Some vehicles are not part of VRR and pay different fixed rates. These include:

  • vans and utes, which make up around 15% of the light vehicle fleet
  • heavy vehicles such as trucks and buses. 

VRR charges a different Motor Vehicle levy based on how much protection the car provides to people inside and outside of the car if it crashes.

There are four different levy rates that can be charged depending on which “band” a car is placed in:  

  • Band one applies to cars that offer the least protection and charges the highest levy
  • Band four applies to cars that offer the most protection and charges the lowest levy.

Current levy rates for

If you want to know what band you are in use our rego calculator on the ACC website:

What does my rego cost?

Band Number of vehicles Levy for petrol cars Levy for non-petrol cars
1 610,000 $80.64 $149.14
2 610,000 $53.53 $122.03
3 930,000 $37.22 $105.72
4 1,860,000 $18.00 $86.50

ACC uses information gathered by Monash University from real-world crashes and the New Car Assessment Programme ratings to decide which band applies to a specific make and model of car.

What VRR is trying to achieve

VRR charges higher levies to owners of cars that provide less protection to people inside and outside of the car in the event of a crash. If you drive a safer car you pay a lower levy. 

Before VRR was introduced in 2015 most passenger cars were charged a flat levy rate. This meant that drivers of safer cars ended up paying for the costs of injuries from accidents involving less safe cars.

VRR tries to reduce this cross-subsidisation so that drivers pay a levy that better reflects how safe their car is.

VRR was not intended to improve road safety or influence people’s decisions when purchasing a car.

It was hoped that it may have contributed to the discussion around road safety but there is no evidence, here or overseas, that VRR or a similar annually charged amount is an effective tool to improve road safety awareness.

Should we keep VRR or remove VRR?

The Minister would like to hear what you think about keeping or removing VRR.

Matching the amount of levy charged to the level of risk is a long-standing component of ACC’s levy systems.  For example, motorcycles are charged more than cars and larger motorcycles are charged more than smaller ones. 

ACC also uses this approach for the Work levy. If you're an accountant you, or your employer, will pay a much lower levy rate than if you were a professional rugby player.

But levies are not always so closely linked to risk. 

If your hobbies include home renovation and skateboarding you're more likely to have an injury than if you were a chess and scrapbooking fan. 

If you're injured during any of these activities then you're covered by ACC but the costs of this are funded either through a flat levy on all employees and self-employed, or through general taxation. 

VRR rewards those with the safest cars

One of the criticisms of VRR has been that it rewards those who can afford the latest, safest model of car, and punishes the elderly, the poor, and the young who can’t. These people tend to drive older cars and these cars tend to be less safe than newer cars. 

Even though there are safe cars available at all cost points, not all people who want to buy a safer car will be in a position to do so. 

While wealthier people tend to drive newer cars there's a significant portion that drives cars that are levied near the top of the scale.

It adds extra complexity into the Motor Vehicle levy system

If VRR was removed there would be some administrative saving that could be spent on other road safety initiatives.

Removing VRR is not anticipated to affect the Government’s road safety objectives.

Regardless of whether VRR is kept or not, the Government is considering how the real-world crash data that underpins VRR could be maintained and used to help motorists make well informed safe-vehicle choices.

The following tables compare the current rates under VRR with the proposed rates for the 2019/20 to 2020/21 period.

Indicative levy rates for petrol driven vehicles (including hybrids and electric vehicles)

If you want to know what band you are in use our rego calculator on the ACC website.

What does my rego cost? 

Band Current petrol rate Petrol rate if VRR stays Petrol rate of VRR is removed Difference between proposals
1 $80.64 $86.69 $40.30 -$46.39
2 $53.53 $55.81 $40.30 -$15.51
3 $37.22 $39.17 $40.30 -$1.13
4 $18.00 $16.96 $40.30 +$23.34

Indicative levy rates for non-petrol driven vehicles

Band Current non-petrol rate Non-petrol rate if VRR stays Non-petrol rate if VRR is removed Difference between proposals
1 $149.14 $163.59 $117.20 -$46.39
2 $122.03 $132.71 $117.20 -$15.51
3 $105.72 $116.08 $117.20 -$1.12
4 $86.50 $93.86 $117.20 +$23.34

More information

If you want more detail on this topic and the thinking behind what is being proposed, see the full consultation document.

The Minister for ACC consultation proposals for the 2019 to 2021 levy period
PDF 1.8 MB
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27 Sep 2018
Open for feedback

We were open for feedback from 27 September 2018 to 25 October 2018.

25 Oct 2018
Closed for feedback

The Ministry for Business, Innovation and Employment (MBIE) has reviewed your feedback. Thanks for telling us what you think!

Nov 2018
Recommendation with Minister

The Ministry for Business, Innovation and Employment (MBIE) has reviewed your feedback and based on what you've said they have made recommendations to the Minister.

Dec 2018
Changes confirmed

Based on your feedback and agreement from the Minister, the changes have now been confirmed. Have a look at the topic to see what has been agreed.

What people have said so far

Here you’ll see what others are thinking about our proposal. They've agreed to make their feedback public. If you haven’t already, add your thoughts to the discussion.