Austin, Texas – Texas auto laws are changing rapidly. Changes to auto insurance, allowable vehicles, and license plate requirements are all set to take effect this year, said Austin auto accident injury lawyer Brooks Schuelke.

“These changes benefit Texas families, but they can also cause some confusion,” said Attorney Schuelke. “An experienced lawyer can help Texans who have questions.”

Texas’s Auto Insurance “Widow Penalty” Ends

For years, auto insurance companies have added insult to injury for those who lose a spouse. Auto insurers traditionally reclassified a person whose spouse had died as “single” – and used this reclassification to raise their home and auto insurance rates. Rates increased 20 percent on average, impacting families at a time when home income often decreased.

The so-called “widow’s penalty” is no more. Senate Bill 1238 ends the practice of reclassifying widowed Texans as “single” in order to raise their insurance rates. Governor Greg Abbott signed the bill into law; it takes effect September 1, 2025. 

Kei Cars Are A Go In Texas

In May 2025, Texas allowed its residents to start importing “kei cars.” The small vehicles, built to meet Japan’s exacting emissions and size standards, are now permitted on Texas roads.

Some rules apply. Currently, no automaker imports kei cars into the US for retail sale. If a kei car is at least 25 years old, however, it may be imported into the United States under federal rules. Texas’s new rule allows these vehicles to travel on state roads. 

“While you don’t really see these cars on Texas roads yet, I suspect they’ll be a big hit.” said Schuelke. “My kids both went to school in Hawaii so we spent a lot of time there. Kei trucks have been legal in Hawaii for a long time, and they are extremely popular. Their flexibility will be popular here.” Schuelke continued.

No More Paper Tags

Starting July 1, 2025, those who buy a new vehicle in Texas won’t receive a temporary paper license tag. Instead, they’ll get a new metal plate directly from the dealership. 

Drivers will still need to wait for their registration tag to arrive, but they’ll be able to drive the new car as soon as the metal plate is attached. Dealerships will also recycle non-vanity metal plates from trade-ins, passing them to future cars.

The new law seeks to cut down on paper-tag fraud, which has increased in recent years, according to Texas officials. 

Legal changes can raise uncertainty. When in doubt, said Attorney Schuelke, speak to a lawyer with experience handling auto-related claims.