New Zealand’s Accident Compensation Corporation (ACC) will reduce its average annual motor vehicle levy from $330 to $195 from July 1.

ACC Minister Nikki Kaye says it reflects the improved financial position of the ACC’s motor vehicle account.

The reduction will save levy-payers about $NZ438 million ($423.36 million).

Also from July, the ACC will also introduce risk rating when assessing annual licence levies.

The charge for cars will reflect how well each model protects its occupants and other road users in crashes.

“This is fairer and recognises that owners of safer cars, which are less likely to cause injuries, should pay lower levies,” Ms Kaye said.

Cars manufactured before December 2011 will be rated based on data collected about their safety performance in crashes. Cars made after December 2011 will be rated on an assessment of design and performance in crash tests.