Typical insurance costs for young drivers are down 10% to £1,062 That’s according to new research from Compare the Market.
The total cost of running a car (including fuel, road tax, MOT, roadside assistance and insurance) for 17- to 24-year-olds fell by £536 year-on-year in the first six months of 2021 to come to £1,737 – the lowest figure since the comparison site launched the ‘Young Drivers’ survey in 2015.
Insurance makes up more than half (61%) of that total, at £1,062, but costs have fallen by 10% or £120 year over year.
However, the price drop is likely to be a blip related to the pandemic, and young drivers still face the highest premiums of any age group.
Here, which one? takes a closer look at how car insurance costs vary by age, why the drop in costs for young drivers may be short-lived, and tips for keeping premiums low if you’re a young driver.
How age affects car insurance premiums
Younger drivers typically face higher insurance premiums as they are generally believed to be at greater risk.
The table below lists the average premiums for the first six months of 2021, broken down by different age groups, according to Compare the Market.
|Age group||Average premium (Jan – Jun 2021)|
Source: Compare the Market., August 25, 2021.
As you can see, as drivers age, premiums fall and reach a low point for drivers between the ages of 65 and 79.
Why cheaper auto insurance premiums can be temporary
Many factors will affect average insurance costs, but one of the biggest right now could be the reduction in the number of miles people have driven since the start of the pandemic.
During the initial Covid-19 lockdown, some – but not all – insurers offered customers discounts to indicate they weren’t on the road as much as they estimated when their premiums were calculated.
We advised drivers to contact their insurer to reduce their estimated annual mileage and receive a potential premium discount or discount.
This year, young drivers are insured to drive an average of 3,541 miles, a decrease of more than 50% from 7,347 miles the year before, according to Compare the Market.
Halving this average distance will have contributed to the lower insurance premiums and fuel costs that young drivers have seen this year.
However, you may not be able to get used to these lower prices. Now that lockdown restrictions have ended and more cars are back on the road, this average mileage could rise to pre-pandemic levels, potentially driving premium costs up.
How can young drivers save on car insurance?
Since you’ll be dealing with potentially the highest auto insurance premiums of any age group, it’s important to do everything possible to find the best, most affordable policy for you. Here are our top tips for saving on auto insurance if you’re a young driver.
1. Choose an affordable car
Cars with smaller engines usually cost less to insure. So driving one of these instead of a larger vehicle can help you save.
Along with your age and mileage, the model of your car will make a difference to your insurance premium.
Compare the Market has compiled a list of the most popular 17- to 24-year-old cars, along with their average insurance premiums. If you are considering buying one of the cars below, you can afford the following.
|car model||Average insurance premium||Average car value|
|Ford Fiesta Zetec||£972||£2,227|
|Fiat 500 Lounge||£651||£4,082|
|Ford Fiesta Zetec (80)||£815||£4,623|
|Opel Corsa SXI||£1,066||£2,061|
|Opel Corsa Limited Edition||£1,031||£2,844|
|Fiat 500 Pop||£662||£2,950|
|Peugeot 107 Urban||£769||£1,252|
|Ford Fiesta Zetec Climate||£1,009||£981|
Source: Compare the Market, August 25, 2021
2. Do not auto-renew
If you’re a younger driver, you might like to see that your renewal quote is lower this year. However, it always pays to shop around.
According to Compare the Market, young drivers can save £178 by switching premiums rather than opting for automatic renewal.
Historically, the insurance “loyalty penalty” has caused customers to pay more for insurance in the long run compared to new customers with the same insurer.
In May, the Financial Conduct Authority (FCA) announced it would ban the loyalty fine from January 1, 2022, saving customers an estimated £4.2 billion over 10 years.
In the meantime, looking around when your insurance expires is still the best way to secure the best price.
3. Read Which? reviews
Every year we ask thousands of real auto insurance customers who have claimed how they would rate their insurer.
We combine this with an in-depth analysis of over 73 elements of auto insurance policies to create our auto insurance reviews, separating the worst from the best.
That? members can find out how insurers fared, as well as our list of recommended providers, in our best and worst auto insurance guide.
4. Add a named driver, but avoid “fronting”
Sometimes younger drivers are insured as “extra” or “named” drivers on their parents’ insurance policies to save money.
If you’re really a co-driver, not the main driver, of your parents’ car, this isn’t a problem. However, if you use the car the most yourself, this is known as “fronting” and is technical insurance fraud.
According to GoCompare, nearly one in four parents face criminal charges by “fronting” their child’s car insurance.
The comparison website surveyed more than 1,000 parents with children between the ages of 17 and 25 who were learning to drive or are currently driving. Some 23% said they have insured their child’s car in their name or that of their partner, even though the car belongs to their child and not theirs.
If you do have your own car, it is important to take out your own insurance. Otherwise, you and your family could face serious consequences.
5. Try black box insurance
Some insurers offer discounts to drivers who install a telematics device – also known as a ‘black box’ – in their car.
These devices keep track of how you drive to determine how safe you are driving. If you build a good track record, you may be able to get a discount or even a discount on your premium. But bad driving can result in a fine.