RUC Changes 2027: What Every New Zealand Driver Needs to Know

Date 14/08/2025 time 9:33am

If you drive in New Zealand, there is a big change coming your way. From 2027, the way we pay for our roads will look very different. Petrol tax is on the way out and Road User Charges (RUC) are stepping in to take its place.

If you own a diesel vehicle, an EV, or a plug-in hybrid, you are already familiar with RUC. But for millions of petrol car drivers, this will be completely new. The government says this is about fairness and keeping our transport network funded. For drivers, it means a new system to understand and new technology in the car.

So what exactly is changing, why is it happening, and how can you get ready without spending more than you need to or handing over more data than you are comfortable with?

Why New Zealand is Changing the RUC System

For decades, petrol tax has been built into the price you pay at the pump. It has been a simple system - you buy fuel, you contribute to the National Land Transport Fund. That fund pays for everything from road resurfacing to bridge repairs.

The problem is that technology has changed faster than the tax system. As more people switch to vehicles that use little or no petrol, the amount collected through fuel tax has dropped. While this is good news for emissions and fuel bills, it has created a gap in road funding.

The government’s solution is to bring all vehicles into the RUC system. This way, the amount you pay is based directly on how much you use the roads. Supporters say this is fairer because everyone contributes equally based on distance driven, not fuel type. Critics point out that it will add a new layer of complexity for drivers who have never had to manage RUC before.

Pros: Fairer funding model, stable revenue for road maintenance, encourages efficient road use.

Cons: More admin for drivers, upfront payments instead of paying gradually at the pump, potential for higher costs for high-mileage drivers.

How the New System Will Work

At its core, RUC is simple. You pay for the distance you drive. For example, you might buy a licence for 1,000 kilometres, and when you use that up, you purchase another.

The new system aims to make this process easier by introducing more digital tools. Paper licences will be phased out, and drivers will be able to check their remaining distance, top up their licence, and make payments through apps or online platforms.

For many drivers, the biggest change will be the requirement to have an NZTA-approved device in the vehicle. This device will automatically record the distance you travel so you do not have to manually check your odometer or risk miscalculating.

RUC Devices: What You Need to Know

RUC devices fall into two main categories. The first type is odometer-based. These devices plug into your vehicle’s OBD port and simply read the total distance travelled. They do not track your location, making them the most privacy-friendly option.

The second type uses GPS tracking. These devices log your exact routes, speeds, and stops. They can be valuable for fleet operators who need detailed data for logistics and route optimisation, but for private drivers they often collect far more information than is necessary for compliance.

Choosing between the two is about balancing privacy, features, and cost. Odometer devices are usually cheaper and simpler. GPS devices may offer extra features, but those features can come at the expense of privacy and often at a higher price point.

Getting Ready for 2027

There is no need to panic-buy a RUC device right now. The rollout will be staged, and the NZTA will release more details as the date approaches. However, taking the time to understand the system now will put you in a better position when it arrives.

If you value privacy, start looking at odometer-based devices so you can avoid unnecessary tracking. If you run a business or need detailed travel logs, you may prefer GPS tracking - but weigh up whether those features are worth the extra cost and the amount of personal data you will be sharing.

Why Loopie is Taking a Different Approach

This is where Loopie, based in Dunedin, comes in. We are building a privacy-first, NZTA-approved RUC device designed for everyday Kiwi drivers. Our device plugs into your car’s OBD port and records only what is necessary for compliance. No GPS tracking. No detailed travel logs. No selling your data to third parties.

We started Loopie because we saw how easily Big Tech could turn RUC into another surveillance system and how overpriced some of these devices could be. The technology to do this is simple, so it should also be affordable. Our goal is to keep it that way.

The Bottom Line

The RUC changes in 2027 are about making road funding fairer, but they will also introduce new decisions for drivers. Understanding your options now will help you choose a device and payment approach that works for you.

When the time comes, Loopie will be ready with a straightforward, affordable, and privacy-focused way to stay compliant. Because paying your fair share should not mean giving up your right to drive without being tracked.