One of our areas of expertise is in classic vehicles. The definition of “classic” varies according to who you talk to but generally insurers know what is “classic” and what is not.

In 2018, the government is changing the MOT test criteria, exempting Vehicles of Historical Interest (VHI) above 40 years old. Hundreds of thousands of vintage and classic cars will no longer need to be tested on a compulsory basis. Though this is good news for classic car owners, we analyse the threat the changes poise to classic car owners, relevant motor trade businesses, other road users and insurers.

From the 20th of May 2018, cars above 40 years old (1978 and prior registration) no longer need an MOT. While there are currently 197,000 cars that don’t need an MOT certificate, this new rule will add another 293,000 on British roads. The change will continue on a rolling basis (in 2019, cars registered in or before 1979 become exempt), and will tie in with the current rule for Vehicle Excise Duty (cars 40 and older are road tax exempt).

While critics and road safety campaigners argue that this means a large number of potentially unsafe vehicles will be allowed on the roads, the government’s view is that classic cars are “of historical interest”, that they are well maintained, and only used occasionally, mostly for short journey – thus justifying the exemption. Numbers suggest that they may have a valid point: in 2015, while classic cars represented less than 1% of the total number of vehicles on the road, the percentage of people killed or seriously injured in crashes involving such vehicles was only 0.1%*.

“Substantial Changes”

The EU Directive 2014/45 states that vehicles which have been substantially modified “in the technical characteristics of their main components” should not be exempt from roadworthiness testing. The government is working with the DVLA and DVSA on the criteria and definition of “substantial change”, and will issue further details before the new rules come into place. But they have already stated that only modifications made since 1988 will be considered when it comes to determine whether a vehicle has been substantially altered.

Consequences of the change

The change may have been welcomed by enthusiasts and collectors, however we can’t help but wonder what the impact will be. It is very easy to register a vehicle as a VHI (via a self-declaration process) and there is no doubt that some owners will register their old bangers as a VHI just to avoid having to maintain and MOT them. Untested vehicles could be “un-roadworthy”, that was the reason for introducing compulsory MOT testing in the first place. The owners will still be able to get their cars MOT’d on a voluntary basis, but if they choose not to, they may be driving vehicles that present a risk to their own and others’ safety.

Older vehicles are very different from new models. The equipment and tests designed for them aren’t the same as those used to check the latest modern vehicles; this will only become more apparent with the increasing popularity of hybrid and electric cars. That’s why specialist MOT and repair centres exist for older vehicles. This change in legislation seems to threaten their livelihood: are they going to be able to stay in business when drivers of classic and vintage cars no longer need to go through an annual compulsory MOT?

Finally, from an insurance perspective, this may bring a number of issues. Today, if a car isn’t maintained properly or hasn’t passed its MOT on time, a claim will be declined. But how will insurers be able to assess roadworthiness without any control in place? It will become increasingly difficult for insurers to devise appropriate cover for older vehicles, and premium prices may increase.

Leaving the responsibility of ensuring that a car is roadworthy to the owner – who doesn’t necessarily knows how to maintain or assess it – seems a bit of a gamble. Let’s hope that most classic and vintage car owners are responsible and keep maintaining their cars!