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Good news for young drivers as insurance premiums fall

Good news for young drivers as insurance premiums fall
Emma Lunn
Written By:
Posted:
17/12/2024
Updated:
17/12/2024

The cost of car insurance for young drivers has fallen by an average of £160 per year, according to Compare the Market.

The price comparison website found that insurance premiums for drivers aged under 25 have dropped from an average of £1,929 in October 2023 to £1,769 in October 2024.

Compare the Market found that October represented the third consecutive month of falling premiums for young drivers, with the first annual decline in the cost of insurance seen in August this year.

The decline in motor premiums may in part be due to a stabilisation in the cost of claims for insurers. The cost of repairs, for example, is now increasing at a slower rate than in recent months.

A survey from Compare the Market found that 75% of young motorists have struggled with driving costs. The research found that 31% had found it difficult to pay their premium in the past six months and 60% planned to take on additional debt to afford to keep driving.

A fifth (19%) of young drivers said their social lives have suffered due to the cost of driving and 15% said it had impacted their jobs.

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The cost of running a car

The total annual cost of running a car for young drivers is now an average of £2,829, according to analysis by Compare the Market.

This represents a £280 decrease in comparison to last year, when the average running cost was £3,109.

As well as falling insurance costs, the decline in overall car running costs has been driven by a year-on-year drop in the cost of fuel, partly due to lower global oil prices and a stronger pound.

Julie Daniels, motor insurance expert at Compare the Market, said: “Young drivers will welcome falling insurance premiums, as motorists in this age group typically face higher premiums. However, motor premiums remain historically high, and many young drivers will still struggle to pay more than £1,500 for car insurance, so it is important they compare prices online before renewing with their existing insurer.

“Through proactively shopping around, young motorists could save by switching or find a deal that is more suitable for their circumstances, such as a telematics or pay-by-mile policy.”