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Norway trebles fine for using mobile phone at the wheel

Motorists who use mobile phones while driving will from January 2021 face fines of 5,000 kroner and three points on their license.

Published: 11 December 2020 15:31 CET

Norway trebles fine for using mobile phone at the wheel

Photo: Damir Kopezhanov on Unsplash

The government decided on Friday to significantly increase the punishment for using a mobile (without using hands free technology) while driving, VG reports.

“It must sting if you are caught using your mobile while driving your car,” transport minister Knut Arild Hareide told VG.

Under current rules, the offence can result in a fine of 1,700 and two driving licence points (prikker).

An accumulation of eight points within three years results in a six-month driving ban.

READ ALSO: What you need to know about driving in Norway

“There must be a deterrent effect, so people take this seriously,” Hareide said.

“We introduced the two points and 1,700-kroner fine and thought it would be significant, but we can see that the measure is less that we thought. That’s why we must show there are consequences for breaking the rules,” the minister continued.

The head of the National Mobile Police Service (Utrykningspolitiet, UP) backed the harsher punishment.

“We don’t think that 1,700 and two points has enough deterrent effect and positive that it has now been decided to increase this to 5,000 and more points from two to three,” the head of UP, Steven Hasseldal, told VG.

“When you are driving a car, you should be concentrating on that. We forget quite easily that one of the most dangerous things we do, both for ourselves and others, is to get in the car,” Hareide said.

The rules against mobile use also apply when waiting in traffic or at a red light, according to a supreme court ruling from this year.

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Why now could be a good time to buy a new car in Norway

In June, there was a notable decline in the sale of new cars in Norway, and the industry believes the total decline will amount to roughly 20 percent in 2023.

The dip in sales is greatest for the most expensive electric SUVs, the premium market segment, where new vehicles often post upwards of 700,000 kroner.

Sales of BMW, Audi, and Mercedes vehicles are down 40-50 per cent compared to their peak years, but the worst dip was registered by Porsche, which saw a decrease of 83 percent.

What is causing the sales slump?

According to industry veterans and car dealerships, there are several reasons for the adverse developments in the market.

Most blame increased interest rates (and, therefore, more expensive loans) and recent tax and fee hikes.

“The fee increases have hit us harder than many others,” Morten Scheel of the dealership group Autozentrum Holding told the newspaper Finansavisen, commenting on Porche’s figures.

Porsche has had to lay off employees in Norway due to the low turnover.

Communications director Marius Tegneby at BMW Norway told Norwegian Broadcasting (NRK) that the introduction of VAT on electric cars also had a strong effect on car sales.

“After two years of particularly high new car sales, 2023 will be marked by the introduction of VAT on expensive electric cars, a changed competition landscape, a general pressure on prices, and from July 1st, new lending regulations,” Tegneby said.

The effect of high interest rates

When interest rates in Norway rise, it becomes more expensive for consumers to borrow money to finance their new car purchases. Higher interest rates thus lead to higher monthly payments or increased overall loan costs.

Øyvind Solberg Thorsen, the director of the Road Traffic Information Council (Opplysningsrådet for veitrafikken), believes a lot of people are probably in over their heads due to loan repayments becoming more expensive.

He told NRK that, in his opinion, the many interest rate increases are a good explanation of why people are now choosing cheaper car models or refraining from buying a new car.

“The expensive electric SUVs are now being replaced by somewhat cheaper models that go for 500,000 to 600,000 kroner, which are good enough for most people.

“Also, many people are in over their heads and have chosen to sell their expensive cars,” Solberg Thorsen said, noting that, therefore, some people have decided to reduce the financial burden by putting their expensive electric SUVs on the used car market.

READ MORE: Six key things to know about buying a used car in Norway

Is this a good time to buy a new car?

The slowdown in car sales has caused well-known car brands to reduce the price of new cars. First up was Tesla, which sharply cut the Model Y and 3 prices in January.

In mid-June, Møller Bil, one of Norway’s leading car dealerships, reduced the price of the ready-to-deliver Skoda Enyaq by 150,000 kroner, and soon after, Volkswagen ID. 4 and 5 were also marked down and were up to 140,000 kroner cheaper.

“These discounts are being offered for normal family cars that go for 500,000 or 600,000, so it can really start to have an impact,” Solberg Thorsen added.

So, if you’re thinking of buying a new car in Norway, several factors are working in your favour at the moment. Firstly, as the demand for new cars decreases due to higher interest rates, dealerships may become more willing to negotiate and offer discounts.

With fewer customers in the market, you, as a buyer, could have more leverage to negotiate a better price or secure additional perks.

Secondly, in response to reduced demand, automakers will likely lower the prices of their new car models to stimulate sales. This can make new cars more affordable for buyers, especially if the decrease in vehicle prices outweighs the increase in borrowing costs caused by rising interest rates.

However, it’s important to keep in mind that – as Norway’s central bank (Norges Bank) is planning more interest rate hikes – if you decide to take out a loan to buy a new car, you should expect your loan repayments to go up as a result.

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