Plunge in car running costs for young drivers
According to Compare the Market, the typical annual cost of using a car for a young driver is £1,737 – the lowest figure since the price comparison website started researching the cost of insurance, fuel, road tax, and breakdown cover in 2015.
Compare the Market’s Young Drivers research found that the cost of driving had been rising in recent years, almost to the point where it would be unaffordable for many young people. But since the start of the pandemic, the declining cost of insurance and fuel has eradicated the increases seen in previous years.
The dramatic decline in insurance and fuel costs in the first six months of 2021 have been caused by young drivers slashing the average annual mileage that they are insured to drive. Young drivers are only insured to drive for an average of 3,541 miles this year, down from 7,347 miles the previous year.
As a result, a young driver’s typical fuel costs have fallen to £416, dropping £453 year-on-year – despite a recent increase in the cost of petrol.
According to Compare the Market, car insurance is still responsible for more than half (61%) of overall car running costs. However, this cost has tumbled in the past year as the pandemic has reduced the number of cars on the road.
The average annual car insurance premium for young drivers now stands at £1,062. This represents a significant £120 (10%) drop from the first half of 2020.
When the typical cost of buying one of the most popular cars for young drivers is included, the total cost of getting a young driver on the road is £4,633 – a £2,145 decline year-on-year.
Ursula Gibbs, director at Compare the Market, said: “Following lockdowns and working from home, many young motorists have drastically reduced how many miles they will drive this year. These young people will be comforted that the cost of driving has fallen as a result. The steep drop in costs will hopefully ease some of the financial strain many young people are under – and prevent driving from becoming prohibitively expensive.
“However, paying for insurance remains by far the biggest running cost for young drivers. One of the best ways to cut this cost is to avoid the trap of auto-renewing. Motorists may lose out by choosing to auto-renew their policy if the price given by their insurer is roughly the same or slightly cheaper than last year. Our figures show there are greater savings to be had by shopping around. Young motorists could typically save £178 by searching for a better deal when their policy ends.”
Lastly, car owners need to include car repair costs in their budget. Engine repair, auto glass repair and tire maintenance are just some of the services car owners may need once in a while.