Premiums have rocketed from £1,365 to £2,009 in the 12 months to January 2024, according to new research by Compare the Market. This means the total annual cost of running a car is now more than £3,000.
So what's behind the eye-watering price hikes, and is there anything young drivers can do to reduce the costs? Which? takes a closer look at the issue to find out.
How much are young drivers paying for insurance?
The cost of car insurance for young drivers has shot up by £644 on average in the past year, the Young Drivers report from Compare the Market has found. The comparison site revealed that, as a result of this rise, the total annual cost of running a car is now £3,043 on average for a young driver. Other expenses include fuel (£799), road tax (£180), and MOT (£55). This is a 25% increase from last year, when the average running cost was £2,436.
The costs are even higher for young motorists who only have a licence to drive an automatic. Premiums for these drivers have surged to £2,803 on average – a £916 increase year on year. They now typically pay £760 more for annual insurance, compared to motorists with licences to drive both manual and automatic cars.
Figures from the Driver and Vehicle Licencing Agency (DVLA) show a 300% increase in the number of people with an automatic-only licence over the past decade. In 2022-23, there were 138,354 people with an automatic-only licence in 2022-23, compared to 34,749 people in 2012-13.
The Compare the Market report suggests this may be due to the rise in popularity of electric vehicles, as some car manufacturers are set to stop producing new manual car models.
Find out more:Why are premiums higher for the under-25s?
Sadly, when it comes to the cost of car insurance, age and experience matters. Drivers who haven't been on the road for long are considered more likely to be involved in a car accident, so providers up their premiums to account for that increased risk.
For example, government figures show that, in 2022, around a fifth of all those killed or seriously injured from collisions in cars involved a young driver. Young male car drivers aged 17-24 are four times as likely to be killed or seriously injured compared with all car drivers aged 25 or over.
Premium hikes could force young drivers off the road
A separate Compare the Market survey revealed that more than three in 10 drivers found it difficult to cover the cost of driving, while nearly eight in 10 drivers are worried about the cost of their car insurance policy. More than four in 10 drivers expect to have to take on additional debt, such as a loan or credit card borrowing, to keep driving.
Julie Daniels, motor insurance expert at Compare the Market, worries that the surge in premiums will mean car insurance becomes 'prohibitively expensive'.
Cost-cutting tips for young drivers
Motorists aged under 25 can reduce the cost of car insurance in several ways:
Shop around: Black box insurance:Add a named driver: Keep mileage down: Pay annually rather than monthly: Haggle for a better price:Which? Limited is registered in England and Wales to 2 Marylebone Road, London NW1 4DF, company number 00677665 and is an Introducer Appointed Representative of the following: 1. Inspop.com Ltd for the introduction of non-investment motor, home, travel, pet, van and temporary insurance products (FRN 610689). Inspop.com Ltd is authorised and regulated by the Financial Conduct Authority (FCA) to provide advice and arrange non-investment motor, home, travel and pet insurance products (FRN310635) and is registered in England and Wales to Greyfriars House, Greyfriars Road, Cardiff, South Wales, CF10 3AL, company number 03857130. Confused.com is a trading name of Inspop.com Ltd. 2. LifeSearch Partners Limited (FRN 656479), for the introduction of Pure Protection Contracts, who are authorised and regulated by the FCA to provide advice and arrange Pure Protection Contracts. LifeSearch Partners Ltd is registered in England and Wales to 3000a Parkway, Whiteley, Hampshire, PO15 7FX, company number 03412386. 3.Which? are an Introducer Appointer Representative of Optimise Media Limited (FRN 313408), for the introduction of HSBC Group, who are authorised and regulated by the Financial Conduct Authority to provide credit brokering activity. Optimise Media is registered in England and Wales to Exchange Street Buildings, 35-37 Exchange Street, Norwich, England, NR2 1DP and company number 04455319. We do not make, nor do we seek to make, any recommendations on financial products or services that are regulated by the FCA, as we’re not regulated or authorised by the FCA to advise you in this way. In some cases, however, we have included links to regulated brands or providers with whom we have a commercial relationship and, if you choose to, you can buy a product from our commercial partners. If you go ahead and buy a product using our link, we will receive a commission to help fund our not-for-profit mission and our campaigns work as a champion for the UK consumer.
source https://www.which.co.uk/news/article/car-insurance-premiums-jump-50-for-young-drivers-is-there-any-way-to-cut-costs-agYqQ0C6smPa