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Budget – How did it affect motorists?

As budgets go, the autumn Budget revealed by the Chancellor on the 22nd of November 2017 effectively let motorists off the hook and contained no nasty surprises likely to increase the immediate costs of driving – for the eighth budget in succession, for example, there was no increase in fuel duty.

Instead, the opportunity was taken to map out the likely future of vehicle use in the UK – a vision which puts electric and driverless cars most definitely to the fore.

In the longer-term, this may make electrically-powered options more affordable and within the grasp of more people. As sales increase, this is likely to reduce the price of electric cars and the costs of running them still further – potentially lowering the associated expense of car insurance for electric vehicles.

Transforming the shape of things to come

The motoring organisation, the AA, summarised some of the main ways in which the autumn Budget may affect motorists – in both the shorter and longer-term:


  • with the exception of the latest production models, diesel vehicles are seen as heavy polluters and Vehicle Excise Duty on diesel vehicles is to be realigned to encourage a switch to cleaner engines which meet standards set out in the Real Driving Emissions Step 2 (RDE2) directive;
  • this – together with an increase in the company car tax for diesel cars from 3% to 4% – is likely to increase the already evident loss of popularity in diesel cars

Electric and ultra-low emission vehicles

  • the Chancellor announced that these are the shape of the future and pledged a further £100 million funding for the so-called Plug-in Car Grant, which helps in the purchase of new electric cars – at least until the year 2020;
  • a joint public-private sector investment initiative is also expected to see a total of £600 of additional funding to expand and develop a charging point infrastructure – including the requirement for all new housing to be compatible with charging points for electric cars;
  • the AA lends its support to the switch towards electric vehicles, but according to surveys conducted amongst its members, the organisation says that 8 out of 10 motorists are put off buying such a car because of the current shortage of charging points;
  • at least a quarter of all vehicles used in government department car fleets are to be electric cars by the year 2022;
  • all these measures tie in with the government’s announcement earlier this summer that it aimed to ban the sale of new petrol and diesel cars by the year 2040;

Car insurance

  • the Budget’s boost to electric car ownership may help reverse the current wariness identified by the AA in buying an electric car;
  • as sales increase and the network of charging points widens, so the cost of electric motoring is likely to fall;
  • as costs fall, this may also help to reduce the relatively higher premiums for insuring electric vehicles – reports in both the Mirror and the Telegraph newspapers, for example, have highlighted the fact that motor insurance for an electric car is currently some 45% higher than that for a petrol or diesel vehicle;

Driverless cars

  • the autumn Budget also contained a target of fully self-driving, automated cars appearing on British roads by the year 2021.

Budgets are capable of mapping out a vision for the future in addition to achieving more immediate goals for raising government revenue. The latest budget seems to fall into the former category when it comes to its impact on the British motorist.

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