Will Cayman have the world's most expensive driver's licence?

A Cayman Islands driver’s licence is now likely to be the most expensive in the world, Compass analysis suggests.

Government’s decision to increase fees by 700% for non-Caymanians, means obtaining and renewing a licence will be more than 10 times higher than in any comparable economy.

Under the new regime, the cost of a three-year licence will increase from $75 to $600 (US$720). A 10-year licence will go up from $250 to $2,000.

Caymanians will be exempt from the fees, with the National Coalition for Caymanians government moving to ensure a limited impact for voters. A comparison of driver’s licence costs in mainstream economies and in Cayman’s closest neighbours suggests the fees were already relatively high in Cayman.

A five-year licence renewal in Ontario, Canada, costs US$90. In the UK, a 10-year licence costs US$18. The US varies by state; for example, in New York City, a licence costs $80 for 10 years.

For other island economies, the trend is the same.

In Bermuda, perhaps the most comparable to Cayman in terms of size, economy and road use, a licence costs US$121 for 10 years. Guernsey’s licences cost US$8.50 for a year, British Virgin Islands is US$15 for a year, and Jamaica is US$34 for five years.

None of those countries has separate fees for non-citizens.

In that context, Cayman Islands licences were already the most expensive per year in the group surveyed.

The new fees – for foreigners only – is more than 10 times pricier than the next most expensive licence.

Legislators debating the plans during budget discussions earlier this month were broadly accepting of the fee increases. Finance Minister Rolston Anglin insisted that “the vast majority of the new revenue measures are not intended to put further burden on the ordinary Caymanian”.

Both he and Infrastructure Minister Jay Ebanks reassured MPs that the Department of Vehicle and Driver’s Licensing would be able to determine through a database whether applicants were Caymanian.

Preferential treatment for Caymanians

In a later Finance Committee hearing, Attorney General Samuel Bulgin said there was a “presumption of legality” from his office on the two-tier fee structure, until and unless a court says otherwise. He gave his opinion that, “Government has the wide berth to carry out preferential treatment for Caymanians without running afoul of the general discriminatory provisions in the Constitution.”

The impact on overseas workers, many of whom already live close to the poverty line, could be severe, however. Even at the new minimum wage rate of $8.75 an hour, a three-year driver’s licence amounts to almost two weeks wages for Cayman’s lowest paid workers.

Similar magnitude driver’s-licence-fee increases are planned for heavy equipment and trucks, with smaller increases for vehicle licensing.

It remains possible that some of those costs could be passed on to consumers in certain impacted sectors, such as food-delivery services. There is also a potential impact for Caymanians who employ domestic helpers.

Across comparable countries, driver’s-licence renewal fees are typically very low because the process is treated as a basic administrative cost rather than a revenue-raising tool. While governments rarely state this explicitly, fee schedules in places like the UK, US, Canada and Ireland strongly suggest a consistent norm of minimal, cost-recovery pricing, making Cayman’s proposed charge an extreme outlier.

Many jurisdictions raise motoring revenue through vehicle-registration fees, fuel taxes, insurance levies and road-use charges for all drivers.

Norway is frequently cited as one of the most expensive places in the world to get a driver’s licence. But the US$3,675 cost is for a first licence and covers extensive mandatory driver’s education training – aimed at improving safety on the roads. The licence renewal, after 15 years, costs US$8.