Young drivers are now paying more than £2,500 a year to run a car as insurance costs soar. A slight fall in petrol bills has been offset by insurance premiums increasing by up to £302 from last year, according to new figures.
Compare the Market says annual car running costs for young drivers, aged 17-24, have increased by £297 year-on-year to £2,559. It said this is a 13% increase from the £2,263 annual cost in 2022.
Young people typically pay the most for car insurance, with the average annual premium for a motorist aged between 17 and 24 now up to £1,464. This is a 26% jump year-on-year.
The insurance comparison site says car insurance now represents 57% of the total car running costs for young drivers. Its research also found the typical annual cost of petrol for young drivers has fallen by £21 in the past 12 months.
It fell from £881 to £860 for a motorist driving 6,700 miles per year. However, the cost of vehicle excise duty has increased from £165 to £180 for a car’s second tax payment onwards.
Compare the Market says young drivers could save up to £400 by shopping around for a cheaper deal, as well as considering different types of policy such as a telematics policy. This allows an insurance company to monitor driving through a black box and adjust costs based on driving habits.
How the average cost of running a car for a young driver has increased*
*According to Compare the Market data
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Julie Daniels, motor insurance expert at Compare the Market, said: "Young drivers will be concerned that the cost of their car insurance is accelerating. The cost-of-living crisis and higher insurance premiums mean that many young drivers could face a struggle to stay on the road.
"For young drivers looking to save money, it is a good idea to shop around for car insurance and compare policies to see if there is a better deal available. Switching to a telematics policy may also be a suitable option for some young motorists.”
More information about young driver insurance can be found HERE.
