A shortage of affordable cars and sky-rocketing insurance rates are squeezing young people out of the car market.
Research from Auto Trader showed that the number of vehicles for sale below £5,000 has fallen by 75 per cent to 24,359 since 2016.
Auto Trader said the lack of affordable stock is caused by the impact of the pandemic on the supply of new cars, as fewer were made during the factory closures of lockdown, leading to a bunfight over even older motors.
Erin Baker, Auto Trader’s editorial director said: “Car ownership and usage is vital to young people, but cost remains a clear barrier.
“They also show higher levels of interest in electric cars – but are less likely to be able to afford them, thanks to stock shortages caused by Covid. Those dynamics are only likely to be addressed over time.”
Concerns over the affordability of vehicles come as Driver and Vehicle Licensing Agency (DVLA) data shows further barriers to young drivers, including a 1.1 million “gap” between the number of driving tests available and expected demand next year.
In addition to the delays in getting young drivers on the road and the affordability of cars, MoneySuperMarket research showed that the cost of insurance policies for 17-year-olds has increased by 67 per cent and for 18-year-olds by 44 per cent in just one year.
The average cost of the first twelve months of motoring for a 17-20-year-old is £7,6094, according to MoneySuperMarket.
Data from Compare the Market suggests that a 17-year-old who has just passed their driving test faces paying £3,075 on average for their insurance.
Poor public transport in their area and a desire for more independence means 70 per cent of 17-24s say car ownership has become more important to them, according to an Auto Trader survey. The survey also showed that young people are more likely to be interested in an electric car.
Sara Newell, director of insurance at MoneySuperMarket, said: “Insurance costs have increased for young drivers, so it’s more important than ever to compare policies and shop around for the best deal.
“Black box policies with telemetry can help reduce the bill, and increasing the policy excess can help to bring the overall cost down. Just check that you would be able to pay for the excess if you do need to make a claim.”
