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How you pay for land transport

All vehicles travelling on public roads contribute to the building, maintenance and operation of our land transport system by:

  • paying PED or RUC
  • being registered
  • paying the licence fee, often called ‘rego’, at least annually.

Some vehicles contribute to specific roads by paying tolls. All fare-paying passengers on public transport contribute to the operation of public transport services.

The cost of building and maintaining local roads is shared between central government, through Waka Kotahi NZ Transport Agency, and local councils. Councils contribute to the cost of their land transport activities from rates and borrowing, in what is known as the ‘local share’. The cost of public transport, and walking and cycling facilities is also shared but state highways and road policing are entirely funded by Waka Kotahi NZ Transport Agency.

From time to time the Government decides to fund projects which are unable or unsuitable to be funded by charges to vehicle owners. For these, the Crown is able to direct additional funds through its usual budget processes.

Who pays PED

PED is paid on all petrol in New Zealand. Fuel companies pay it to the New Zealand Customs Service when petrol, sometimes called ‘motor spirits’, is imported or leaves the place where it is produced, for example an oil refinery.  They then recover the cost of PED when consumers buy petrol, CNG or LPG.

Who pays RUC

You pay RUC if you travel on public roads and have a vehicle:

  • powered by diesel, hydrogen or biodiesel, or
  • that weighs over 3.5 tonnes.

All vehicles that run on a fuel that is not petrol, CNG or LPG must have a valid RUC distance licence, unless exempt. How much you pay is based on the type of vehicle, its weight, axle and tyre configuration, and the distance you travel. You pay for RUC in multiples of 1000km from Waka Kotahi NZ Transport Agency or approved RUC agents.

RUC licences(external link)

There are some exemptions — for example, vehicles that only use diesel off-road and electric vehicles (EVs).

RUC exemptions(external link)

RUC for EVs

Electric vehicles are subject to RUC, but both light and heavy electric vehicles are currently exempt. Light electric vehicles are exempt until 31 March 2024, and heavy electric vehicles are exempt until 31 December 2025.

Electric vehicles programme

How we decide rates of PED and RUC

The rates of PED and RUC are set by the Government so they raise enough revenue to pay for planned land transport expenditure. The plans are set out in the Government Policy Statement on Land Transport.

Government Policy Statement on land transport

How much you pay depends on the type of vehicle you drive — for example, your vehicle’s fuel efficiency, how heavy it is, its axle configuration — and how far you travel.

Rates of PED and RUC

When you buy a light vehicle — that is, one that weighs less than 3.5 tonnes — you may want to factor in the comparative costs of PED and RUC. PED is exclusive of GST, although you still pay GST on petrol, and RUC are inclusive of GST.

Buying a light vehicle

Licensing and registration

Every motor vehicle on a public road must also be registered and licensed. Vehicles operated on a road are registered once when they arrive in New Zealand, but you pay for a licence, or rego, at least annually. Waka Kotahi administers licensing and registration.

Vehicle licensing (rego)(external link)

Vehicle registration(external link)

Cost of a vehicle licence

The majority of the money paid for a motor vehicle licence goes to Accident Compensation Corporation (ACC) to help pay for personal injuries resulting from motor vehicle accidents. The rest of the money, excluding GST, goes to the NLTF, which helps funds the building, maintenance and operation of our land transport system.

Paying ACC levies if you own or drive a vehicle(external link)

The cost of the motor vehicle licence includes:

  • a charge of NZD$43.50 which goes to the NLTF
  • an ACC levy for the motor vehicle account, depending on the vehicle type and fuel type
  • GST, transaction fees, and other fees, such as the cost of the label itself.

How the NLTF is used

The NLTF is ring-fenced transport fund made up of PED, road user charges, a portion of annual vehicle licensing fees, and income from the sale and lease of state highway property. The NLTF is administered by Waka Kotahi and all the revenue that goes into the fund is spent on our land transport system through the National Land Transport Programme.