Steering Through the Budget: How the UK Autumn Budget 2025 Impacts Drivers
With the Autumn Budget 2025 fast approaching, drivers across the UK are bracing for change. The upcoming announcements from Chancellor Rachel Reeves are expected to turn more than a few wheels in the motoring world. From fuel costs to electric-vehicle (EV) charges, here’s what to keep your eyes on - and how to steer ahead of the curve.
Fuel Duty: Relief… Or the Calm Before the Surge?
One of the most direct cost pressures for motorists is fuel duty. For years, the duty on petrol and diesel has been frozen at 52.95p per litre, providing some stability for drivers. However, with fiscal pressures mounting, analysts suggest the freeze may not hold for long. The UK’s fiscal shortfall may force the government’s hand - and a modest hike in fuel duty (even just a few pennies per litre) could make a noticeable dent in running costs.
For now, the freeze provides a breather - but don’t rely on it indefinitely. If you drive petrol or diesel, factor in the possibility of a fuel duty rise when planning your 2026 budget.
Vehicle Excise Duty (VED) & EV-Taxation Shift
A major change is coming to vehicle tax. From April 2025, electric vehicles lost their full VED exemption. They now face a small first-year charge (around £10), followed by an annual rate of about £195. EVs over £40,000 will also be hit by the “expensive car supplement,” marking the end of the zero-tax era for EVs. For anyone considering a new EV or planning with their current one, tax savings are narrowing. EVs won’t automatically be the cheaper option anymore - so it’s worth weighing purchase price, running costs and tax together when making your decision.
Road Pricing and the Future of EV Motor Taxation
A more radical idea on the table is the introduction of a pay-per-mile tax for EVs. With fuel duty revenues falling as drivers switch away from petrol and diesel, the Treasury is looking for new ways to bring revenue in. Some reports suggest a possible rate of around 3p per mile for EV drivers. Importantly, while the system is under serious discussion now, it’s not expected to be implemented immediately, with most sources suggesting the scheme could only come into effect from 2028, after a public consultation process. Meaning, for high-mileage EV users (commuters, company drivers, rural owners), this could be a significant change - one that deserves careful attention.
Road Infrastructure, Potholes and Hidden Running Costs
The Budget also appears set to address road quality, with proposals for increased funding to tackle potholes and improve maintenance. However, drivers will still face rising costs, as inflated parts prices, higher repair bills and increasing insurance premiums continue to add pressure. Keeping on top of servicing and maintenance is more important than ever - even if taxes don’t rise immediately, running expenses already are.
Who gains and who pays?
As the Budget rolls out, it will become clearer who benefits and who may feel the changes. Drivers opting for lower-cost EVs under £40,000 are likely to gain, continuing to enjoy incentives without facing the higher taxes applied to premium models. Low-mileage drivers may also come out ahead, along with anyone acting early to secure a vehicle or tax arrangement before the new rules take effect.
However, owners of higher-priced EVs or vehicles over £40,000 are set to face additional costs. High-mileage drivers who rely on EV tax advantages may also be impacted, as well as rural commuters and tradespeople still dependent on petrol or diesel vehicles, who could be affected by rising fuel duty or other indirect expenses.
If you’re in vehicle-planning mode, now is the time to model your future costs - not just purchase price, but tax, running and mileage.
Impacts on Your Car Coverage & Protection
At MotorEasy we can help you stay ahead - not just with what you pay at the pump or when you buy a car, but with how you protect it. With higher repair bills, shifting tax rules and rising costs, a full-service approach matters:
- Budget planning: With tax and duty changes on the horizon, factor car running costs into the bigger picture now.
- Vehicle type matters: If you’ve got an EV, check how VED and tax changes apply. If you’re still driving petrol/diesel, keep the possibility of rising fuel duty in mind.
- Coverage counts: Repair bills are climbing. A breakdown or major repair could hit harder than ever. Our warranties, GAP cover and tyre protection are tools to protect you from the unexpected.
- Act early: If you’re buying soon, the rules may shift. Getting in under older regimes could offer advantages.
The Autumn Budget 2025 points to a clear shift for drivers, with updates that could impact the cost of both traditional fuel and EV ownership in the coming years. Understanding these changes now makes it easier to plan - whether you’re looking at running costs, considering your next car, or managing your monthly budget. Keeping informed means, you can make confident decisions, whatever you drive.
At MotorEasy, we’ll be here to guide you through those changes, help you understand their impact, and provide the protection you need so your motoring experience stays predictable - even when the taxman enters the frame.
