The cancellation of the ACC Vehicle Risk Rating (VRR) next year means that car registration costs are going to change.
In mid-2019, owners of older, less safe cars will pay less for their registrations, while people who own newer, safer cars will have to pay more.
ACC Minister Iain Lees-Galloway announced on Monday that the VRR programme would end.
"The VRR programme, which applies different levy rates to different makes and models of cars based on their safety ratings, is challenging for ACC to administer and lacks evidence that it is contributing to a safer vehicle fleet in New Zealand," he said.
"There is no evidence that variable levies based on VRR contribute to injury prevention or encourage the purchase of cars with higher safety ratings. It also loads more of the burden on to low-income people and families, as they are generally less able to buy cars with the best safety ratings."
AA spokesperson Mark Stockdale told the Herald that scrapping the VRR programme is a "backward step for road safety".
"The VRR is a tool that helps educate people about vehicle safety. Not all vehicles are created the same when it come to safety and that is why the levies differ, depending on the safety rating on the vehicle.
Stockdale believed VRR acted as a prompt for people who received their licence renewal notice to think about how safe their vehicle is and could influence them when it comes to replacing their car.
"It's a useful tool that could help influence people's purchase preferences when it comes to cars and contribute to improving the safety of the fleet.
"We are losing that potential benefit at a time when our road toll is increasing."
Stockdale said it also mean ACC levies are going to rise for 65 per cent of the nation.
"Kiwis will be asking 'why am I going to be penalised for having a safer car?'"
How much will your car rego cost next year?
Currently, the ACC levy amount per year is dependant on the type of vehicle and which band it falls in. For example, those who own older, less safe vehicles pay an ACC levy of $80.64 where those with newer, safer vehicle pay $18.
When the VRR programme ends, petrol vehicles owners will all pay the same levy - $46.04 per year.
• Band 1 - Currently pay $80.64 ACC levy per year, will save $34.60 next year.
• Band 2 - Currently pay a $53.53 ACC levy per year, will save $7.49 next year.
• Band 3 - Currently pay a $37.22 ACC levy per year, will pay $8.82 more next year.
• Band 4 - Currently pay a $18 ACC levy per year, will pay $28.02 more next year.