Learner drivers could get money back from their driving test fees if they pass first time.
The Department for Transport (DfT) is considering the proposal in a bid to encourage learners to only take the test when they are ready and confident of passing.
It is hoped this will mean new drivers are less likely to have an accident in their first months of having a full licence.
The Driving and Vehicle Standards Agency (DVSA) conducts some 1.5m practical tests each year but only 21% result in a first time pass. Some 53% are failed and 26% are passed by learners who are on at least their second attempt.
Under the proposal, the practical driving test fee - which costs up to £75 - would be reduced. The learner would also be required to pay a deposit to be returned if they pass.
This is part of a consultation aimed at finding ways to improve road safety and increase efficiency in government agencies. An exact figure for the deposit has not been determined.
Transport secretary Patrick McLoughlin said: " We want to make learning to drive safer and more affordable.
"This change will give those who pass first time some money back and provide an incentive for learners to be more prepared before they take their test. These common sense proposals mean that all learner drivers can feel the benefit.
"This consultation is a really important step and we want to hear all views."
Motoring research charity RAC Foundation welcomed the proposal.
The organisation's director, Steve Gooding, said: "We support measures that will encourage learner drivers to get the experience they need to pass their test first time with flying colours, rather than barely scraping through or failing and having to repeat the process a few months down the road at yet more expense.”
Carly Brookfield, chief executive, Driving Instructors Association, said: " There are some bold suggestions in this consultation and we do have to think more boldly about how to get more young people, and drivers generally, to properly evaluate the responsibility and risk of driving.
"If there are motivational tools we can use to achieve that aim and better prepare novice drivers as a result, then let's have a proper and open minded debate about what those tools could be."
The consultation also proposes offering tests from a range of venues and the introduction of m ore flexible time slots - such as at weekends and evenings - to reduce delays.
The DfT is considering changing the providers of some services to get better value for money.
The consultation will also look at ways to tackle the shortage of Large Goods Vehicle drivers.
This could include streamlining the application process to help those with the correct qualifications obtain their licence and start work sooner.
Transport minister Lord Ahmad of Wimbledon said: " This is a bold and ambitious approach aimed at putting the user at the heart of everything the motoring agencies do.
"They provide a valuable public service, from issuing driving licences to taking dangerous vehicles off our roads and I want to make sure they are able to operate in the most effective way.
"These proposals are about modernising customer services and improving road safety, particularly for younger drivers, and I want to hear all views."
The consultation will close on January 8 and the DfT will then issue a response.