Common mistake in petrol crisis could see you fined 2,500

There are strict rules under the Public Passenger Vehicle Act 1981

As petrol prices across the country escalate, drivers are being warned that giving a friend or family member a lift in a bid to save money could land them in trouble with the law. According to a recent survey, car insurance experts at Tiger.co.uk found 25% of drivers ask for petrol contributions from their passengers, with 32% saying they find themselves more likely to accept donations now, than a year ago.

Accepting contributions towards the cost of fuel can be a great help as costs soar from 131.7p per litre for unleaded petrol to 158p, with the cost to drivers thought to total £1.3 billion since the war began. However, drivers need to be careful. In some cases, accepting money for lifts could be seen as a business or taxi service, legally classed as a ‘hire or reward’ transaction and invalidate regular car insurance.

To be on the safe side, drivers need to make sure they don’t make a profit. Money offered needs to be a token gesture, less than or equal to the actual cost of the journey. Over half the drivers surveyed, 55%, were unaware of this risk to their insurance, potentially leaving them unprotected, and in danger of breaking the law.

According to the Public Passenger Vehicle Act 1981, passenger contributions should be arranged before the journey and should only cover the running costs of the vehicle, such as fuel and wear and tear. Exceeding these limits could see drivers hit with a fine of up to £2,500.

Drivers can use legitimate and regulated ride-sharing apps to help calculate a suggested contribution per passenger for the journey – using the HM Revenue and Customs Approved Mileage Payment Allowance. Police have been cracking down on groups who use social media platforms to arrange illegal ‘cash for lifts’ schemes, essentially operating as unlicenced taxis. In Jersey, it is estimated that the illegal taxi trade is valued at a staggering £1m a year, with some drivers said to be making as much as £300 in a single night for providing lifts.

Ian Wilson, car insurance expert and Managing Director at Tiger.co.uk said: “Drivers might not know that taking petrol money from passengers could invalidate their insurance.

“As people look to reduce their fuel spend, car sharing is on the rise, with 14% saying they are now more likely to car share to try and fight escalating petrol costs. Drivers need to be wary if they accept contributions towards their fuel that they don’t make a profit, or they could be in trouble with the law and risk leaving themselves unprotected.

“Worryingly, the survey showed that rising fuel costs are making drivers actively change their lifestyles, with 60% saying they now stay closer to home.

“There are other ways drivers can help reduce fuel consumption, from regularly checking tyre pressures, to reducing the excess weight of the vehicle, avoiding idling and driving economically where possible with smooth braking and switching to a higher gear as soon as possible – to help with long-term savings.”