The Autumn Budget 2025 is set to bring major changes for UK motorists, with new rules that could put annual mileage under far greater scrutiny. Drivers are now being urged to ensure their mileage estimates are accurate — or risk invalidating their car insurance policies.
One of the most notable proposals expected in the Autumn Budget is a potential 3p-per-mile charge for electric vehicle (EV) drivers. This fee would be added on top of existing road taxes, with the total amount calculated each year based on distance travelled.
Graham Conway, Managing Director at Select Car Leasing, believes the Chancellor’s pay-per-mile proposal could trigger increased oversight from both the government and insurance companies. He warns that motorists should avoid any attempt to “cheat the system” when declaring their annual mileage.
Conway explains:
“The Chancellor’s pay-per-mile plan will put estimated annual mileage firmly under the spotlight. With this heightened oversight, all motorists — regardless of the type of car they drive — should review the accuracy of their insurance mileage estimates. When taking out insurance, the mileage you report directly influences your premium.”
Some drivers assume insurers cannot verify the miles they actually travel, but this is a misconception. Insurance companies can access up-to-date odometer readings through MOT records, servicing data, and other shared vehicle information.
Underreporting mileage intentionally may seem harmless, but it could lead to serious consequences. Policyholders could face a void insurance policy for ‘misrepresentation’, especially when making a claim. In severe cases, motorists may even face accusations of insurance fraud under the Consumer Insurance Act 2012 — something that can dramatically increase premiums in the future.
If the difference between reported and actual mileage is minor, insurers usually make adjustments when the policy renews. However, larger discrepancies may result in outright refused claims or cancelled policies.
To stay safe, Conway recommends reviewing past MOT certificates to understand your real annual mileage. He suggests rounding up, not down, to avoid issues and ensure a more accurate estimate. Mileage plays a major role in determining risk, making it one of the most important factors insurers consider.
Some younger drivers already use telematics ‘black box’ policies, which track mileage automatically. Others choose pay-per-mile insurance options that rely on OBD plug-in devices or connected car data.
Research shows that 16% of motorists have admitted to providing false information to their insurance providers — and 65% of those admitted to underreporting their mileage to get cheaper premiums.
Conway warns that with mileage becoming even more monetised under the Autumn Budget proposals, motorists should expect insurers to tighten their checks. This could include more frequent odometer inspections, mid-term premium adjustments, charges for exceeding mileage limits, and wider adoption of telematics systems.
His message is clear:
“With the proposed EV tax and increasing mileage-based assessments, insurers will become far more vigilant. Be honest when calculating your annual mileage — or be prepared to face serious consequences.”
