Cars first registered since the year 2000 will need to get a warrant of fitness only once per year.
The Government has decided that owners of new cars will not have to get them inspected until three years after they are imported.
Cars manufactured before 2000 will still need twice-yearly checks.
Associate Transport Minister Simon Bridges said on Sunday the new rules recognise cars are getting safer.
The changes are expected to be in force by July 2014.
They will also affect car registration, with incentives for early payment and penalties for late payment, and a system of reminders by text message.
Mr Bridges said the change will save motorists, businesses and the Government $159 million per year.
The Automobile Association welcomed the announcement, saying the changes are supported by 70% of its members.