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Cost of car insurance for young drivers soars by almost £600 in one year

The cost of car insurance for young drivers soared by almost £600 in just one year, new research has found.

Figures compiled by price comparison website Compare the Market show that there has been a £594 rise in the past 12 months.

The average premium for those under 24 is now £1,792, a big year-on-year increase from the £1,198 quoted in August 2022.

Insurance now represents 63 per cent of the total costs young people pay to run a car, with Compare The Market warning that higher car insurance premiums could be on the horizon as inflation hits repair costs.

The average insurance premium now rests at £1,792 (PA)
The average insurance premium now rests at £1,792 (PA)

Car insurance is now the third-biggest household bill, behind council tax and energy, according to Confused.com. The Independent has revealed how average premiums for all drivers have shot up – rising 48 per cent in the year to June 2023, data from analyst Consumer Intelligence showed.

The findings reflect concerns that driving is becoming increasingly unaffordable for young people, with a separate survey from Compare The Market finding that 51 per cent of motorists worry that if the costs continue to rise, they will no longer be able to afford to drive.

Meanwhile, the price of petrol has fallen by £147 in the past 12 months from £982 to £836 for a motorist travelling 6,500 miles per year, with the total annual running costs reaching £2,8864, a 19 per cent year-on-year increase.

Elsewhere, for 25- to 34-year-olds, the average insurance package increased from £560 to £845 between August 2022 and August 2023. For the 35 to 44 cohort the price increased from £453 to £656, with 45 to 54-year-olds skyrocketing by £175 from £345 to £520.

Julie Daniels, motor insurance expert at Compare the Market, said: “Many young drivers will be worried about the soaring cost of car insurance in recent months. When combined with the wider cost of living crisis, more expensive insurance premiums could mean that driving becomes prohibitively expensive for lots of young people.

“For those looking to save money on their car insurance, it is a good idea to shop and compare policies to see if there is a cheaper deal available. Switching to a telematics policy may also be a more affordable option for some young motorists.”