To drive a car in the United Kingdom, drivers are required to hold a driving license issued by either the Driver and Vehicle Licensing Agency (DVLA, for residents of Wales, England and Scotland) or Driver & Vehicle Agency (DVA, for residents of Northern Ireland). The credit card-sized license issued is a European driving license, which allows the bearer to drive in all 32 member states of the European Economic Area (EEA). Conversely, any citizen from the 32 EEA countries is also allowed to drive a vehicle in the United Kingdom using a similar driving license, which is identified using a colour photograph and a unique 16-character number.
Foreign visitors from outside of the EEA may use their existing licenses issued from their country of origin for a period of 12 months from the date when they first enter UK. After one year (with the exception of American citizens), they are required to apply to exchange their licenses. The license exchange form is available from most Post Office branches and all MOT Test Centres. Applicants will be required to attach proof of identity, proof of residency and a recent passport-sized photograph with their application to the DVLA or DVA. No fees are incurred for exchanges.
Owing to the fact that American driving licenses are issued and administered by individual states (and states are constitutionally prevented from entering into treaties with foreign governments), Americans are required to directly apply for a British driving license and take a driving test if they intend to drive beyond the first year of residency in Great Britain. The application fee is currently at £62.50.
All vehicles used on UK roads must have motor insurance coverage. Driving in a car without motor insurance, even a rented car, can lead fines and penalty points (which could lead to suspension, depending on your record). Remember to bring along, if any, proof of international travel insurance when driving.
Drivers are required to produce proof of ownership or rental agreement when asked by law enforcement officials. If you have a UK private plate then it must follow legal requirements to comply with the DVLA
It's recommended to keep a copy of a European Accident Statement (EAS) form in your car. Ask you insurer, car rental agency or even hotel concierge for a copy. The EAS is a widely used medium in Europe after accidents to facilitate the exchange of information and establish facts of an incident.
While not compulsory, it is highly advisable to subscribe to a breakdown cover to ensure you are not left stranded on a lonely stretch of road in the middle of the night.