Vehicle owners shouldn’t renew their vehicle licences (“rego”) for 12 months, in order to save money ahead of forthcoming reductions in ACC levies.

The Automobile Association (AA) and Consumer NZ are both advising motorists whose vehicle licences need renewing before July 2015 to renew for a shorter period so that it expires shortly after 1 July.

From that date, annual motor vehicle licence levies will reduce by an average of 45 percent for most vehicles (except motorcycles, mopeds, trailers and caravans).

For cars aged under 40 years, the actual reduction will vary according to the cars’ safety rating, calculated by ACC. The annual savings will range from $42-$132 for petrol-powered vehicles, and $82-$172 for diesels. ACC tax on petrol will also fall 3 cents per litre on 1 July 2015.

Consumer NZ Head of Testing Paul Smith said motorists relicensing their vehicles for 12 months now will end up paying too much.

"For some cars, the potential savings amount to $11 a month, so owners should think about renewing their vehicle licence for a shorter period to save money,” Paul said..

AA Principal Advisor Mark Stockdale said owners can relicence their vehicles for any length of time.

“For example, if the motor vehicle licences expires in December, only renew for 7 months. To maximise your savings in February, only renew it for 5 months.”

“When motorists go to AA Centres to renew their vehicle licence, our staff will advise them how many months they should relicence their vehicle to maximise savings,” Mr Stockdale said.