New Zealand's driver licensing system is going through its biggest overhaul in years, and one part of it is already live. In February 2026 the Government confirmed it will scrap the full licence practical test entirely, with the new system taking effect on 25 January 2027. But here is the part many restricted drivers have missed: since 7 May 2026, demerit points you pick up on your restricted licence can add time to your restricted period once the new rules kick in. According to NZ Transport Agency Waka Kotahi, each demerit event during this window could extend your restricted period by six months.
What's changing
The reform reshapes the entire graduated licensing journey for car drivers.
- The full licence practical test is gone. From 25 January 2027, the restricted licence test becomes the only practical driving test you will ever sit. Once you have held your restricted licence long enough, you graduate to a full licence without another practical test.
- Longer learner period for under-25s. The learner phase doubles from 6 to 12 months, though you will be able to reduce it back to 6 months by completing an approved practical driving course or logging supervised driving hours.
- Shorter restricted period for under-25s. The restricted phase drops from 18 months to 12 months, and 6 months for those 25 and over. The old option of shortening it with a defensive driving course disappears.
- Demerits now have teeth. Demerit points earned on a restricted licence between 7 May 2026 and 24 January 2027 can extend your restricted period when the new system starts.
- Zero alcohol for all learner and restricted drivers, regardless of age.
- It gets cheaper. The total cost of getting a class 1 car licence falls from $362.50 to $282.50, an $80 saving.
What it means for learner drivers
The restricted test just became the most important driving assessment of your life. With the full test gone, it is the one and only time an examiner will ever sit beside you and judge whether you are safe on the road. Waka Kotahi has signalled the restricted test will carry more weight, with hazard perception assessment, currently part of the full licence stage, moving into the restricted test.
The demerit rule changes the calculation too. Under the old system, a minor lapse on your restricted licence stung but did not slow you down. Now a phone-use ticket or a speeding fine between May 2026 and January 2027 could mean six extra months before you reach your full licence. Driving clean is no longer just about safety; it is about your timeline.
How to prepare
- Treat the restricted test as the final exam. Do not aim to scrape a pass. The habits the examiner checks are the ones you will carry, untested, for the rest of your driving life.
- Build hazard perception deliberately. Commentary driving, where you narrate hazards aloud as you drive with your supervisor, is the fastest way to train the scanning habits examiners want.
- Log your hours honestly. If you are under 25 and starting out, supervised hours or an approved course will be your route to a shorter learner period from January 2027.
- Protect your record. If you already hold a restricted licence, every demerit between now and 24 January 2027 carries extra cost. Slow down, put the phone away.
One practical test means one chance to show your best driving, and familiarity breeds calm. SteerClear lets you practise the real test routes around your local testing centre, so nothing on test day feels like new territory.