Paper tax discs are to disappear, with records now held about individual vehicles on computer.
The Autumn Statement said that the move would remove “an administrative inconvenience for millions of motorists”.
Drivers will also be able to pay their road tax in monthly instalments, while a 2p per litre hike in fuel duty scheduled for April has been axed.
AA head of public affairs Paul Watters said the cancellation of the increase would amount to the equivalent of a £1.40 saving per tank for an average family saloon.
Graham Muir, managing director of Forfar fast food distribution firm John Dow, welcomed the saving on fuel.
The four trucks run by his company go through £7,000-worth of diesel each month as they weave their way across the north east of Scotland.
He gave the measure a cautious welcome, realising that a sharp change in the price of oil could wipe out any benefit for the duty reduction.
“I’m quite pleased that the fuel has not gone up,” he said.
“I’d prefer to see it go down, obviously, but holding it will be better than nothing.
“But 2p per litre can be quite a lot when you’re running four trucks.”
He will also consider the new regime for road tax charging, which could help his firm’s cash flow by allowing the sum to be paid in instalments.
Mr Watters said the AA would seek to ensure drivers still receive some form of receipt other than a tax disc.