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Insurance for young drivers rises to £3,000, research finds
The cost of car insurance for a 17-year-old driver who has just passed his driving test has reached £3,075 on average, according to new research from Compare the Market.
This is a substantial £1,071 increase in the typical cost of car insurance for a 17-year-old compared to last year (£2,004).
The average cost of car insurance for a driver with a provisional license (all ages) is £726. This typically rises to £2,731 when a driver passes the test and receives a full license. Car insurance is more expensive once drivers pass the test as they are no longer being supervised by an experienced driver. However, the cost of car insurance is £771 cheaper after the driver gains a year of driving experience.
As the cost of car insurance has risen for new drivers, the proportion of young people learning to drive has steadily declined. The latest figures from the Department for Transport show that just 27% of 17-20 year olds have a full driving licence, compared to 37% of 17-20 year olds in 2018.
Drivers who decide to learn to drive later in life could benefit from cheaper car insurance. While the average premium for a newly approved 17-year-old is £3,075, this drops to £2,503 for a newly approved 22-year-old. For a recently deceased 27-year-old, the average cost of car insurance is £1,089 cheaper, costing on average £1,986.
Julie Daniels, car insurance expert at Compare the Market, said: “The significant rise in the cost of car insurance could make driving prohibitively expensive for many teenagers. Freshly passed 17-year-olds now have to pay more than £3,000 on average for their first year’s car insurance. This will put a substantial strain on your or your parents’ finances. However, premiums for new claims-free drivers are expected to fall in subsequent years. People should encourage any young drivers they know to look for savings online. Buying a cheaper policy is one of the best ways to try to save money on car insurance.
“As the cost of car insurance continues to rise, it may force some potential young drivers to delay learning to drive. Our research shows that these drivers could benefit from cheaper premiums if they decided to learn in their twenties. For those looking to get on the road sooner, choosing a telematics policy could be a good option for some young drivers, whose premium could be reduced if they can demonstrate that they are safe drivers.”