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Annual car insurance for young drivers surges to £2,000

Annual car insurance for young drivers surges to £2,000
Paloma Kubiak
Written By:
Paloma Kubiak

The average cost of car insurance for young drivers has leapt 50% in the past year to stand just shy of £2,000, with many concerned they'll be forced to take on debt to keep their car on the road.

Young drivers under the age of 25 are paying £658 more this year than last, as car premium have sky-rocketed from £1,271 in 2022 to £1,929 on average now.

According to research from Compare the Market, more than seven in 10 drivers aged 17-24 are worried about how they’ll be able to afford car cover.

Meanwhile, one in four drivers have struggled to pay for their premium in the past six months.

As such, six in 10 indicated they’ll likely take on debt such as through credit cards or loans to keep their car on the road.

For many young drivers, having their own car gives them independence, with Compare the Market research revealing the increasing cost of cover is harming their work and social lives.

Three in ten young drivers (31%) said they don’t earn enough to cover the higher cost of driving, and 13% have said the increased cost of running their car has negatively impacted their work life.

For one in four, if costs continue to rise, they may not be able to afford to keep driving. For more than one in five drivers (22%), higher car running costs have been detrimental to their social life, and nearly a quarter (24%) have visited their family less often.

The price comparison site said the significant rise in the cost of car insurance for young drivers may in part be due to an increase in the cost of claims for insurers.

Higher inflation will have likely impacted many areas of the motor repair industry, including the cost of spare parts, energy, and hiring specialist mechanics.

Drive down the cost of car insurance

Young drivers could save hundreds of pounds on their car insurance by shopping around for a cheaper deal ahead of their renewal.

But Compare the Market found that just 14% of young motorists compared car insurance prices before their policy renewed – the lowest proportion of any age group.

This is despite this age group being most likely to have previously helped someone else, such as an older relative, use a price comparison website (80%).

Based on its internal quote data, drivers under the age 35 could save up to £871 on their car insurance. 

Julie Daniels, motor insurance expert at Compare the Market, said: “The rapid rise in the cost of car insurance means many young drivers are finding it difficult to stay on the road. Concerningly, some are needing to cut back on seeing friends and family or expect to take on further debt to keep driving.

“It’s worthwhile for people to consider if they’re able to encourage or support any young drivers they know to look for savings online. Shopping around for a cheaper policy is one of the best ways to try and save money on car insurance.  Switching to a telematics policy may also be a more affordable option for some young motorists.”