YOUNG DRIVERS INDEXFEBRUARY 2019
A bi-annual index for young people’s driving costs by
Key Statistics
• Annual cost of running a car for 17-24-year-old drivers drops £150, decreasing over 6% in the past six months
• Annual fuel costs dive by nearly 12% to £785 in the same period
• Car insurance makes up over half of young drivers’ first year running costs
• Average insurance for 17–24-year-olds has fallen by £67 (5%) over the past year, dropping to £1,281
Young drivers: the annual cost of running a car
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The cost of running a car for young
drivers has fallen by over 6% in the
past six months, primarily driven by a
decrease in the cost of fuel and motor
insurance. On average, a 17–24-year-old
driver will now pay £2,292 to run their
car in the first year, of which more than
half (£1,281) is the cost of insurance.
The fall over the last six months
counteracts a period of steady growth
in the costs for young drivers, with the
annual amount 17–24-year-olds pay to
get on the road at its lowest level in two
years. Two years ago, the cost of running
a car for this age group stood at £2,397.
The drop in the cost of fuel has been a
major driver in the reduction of overall
motoring costs for young drivers. In the
past six months, the annual cost of fuel
for an average young driver plummeted
by over £106 (11.9%) from £891 to £785.
The analysis of fuel costs, which is based
Cost of running a car (17–24-year-olds); last six months
Element Cost % of total cost
Insurance £1,281.00 55.89%
Fuel £785.25 34.26%
Est. VED (Road Tax) £126.00 5.50%
MOT £54.85 2.39%
Breakdown cover £44.97 1.96%
Total cost per year £2,292.07
on average annual mileage, average fuel
efficiency of cars in the UK and the cost
of premium unleaded petrol, shows that
prices have fluctuated significantly in
recent years, reaching a low of £739 in
the latter half of 2016 and a high of £891
in the first half of 2018.
Another important factor in declining
motoring costs over the past six months
has been the fall in insurance
premiums. Annual insurance costs
for young drivers have fallen by
3.3% from £1,324 to £1,281 on
average over the past six months,
while on a year-on-year basis,
premiums have fallen by nearly £70
or 5%, from £1,348. Insurance costs
account for over 55% of a young
driver’s running costs.
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After years of relentless rises in the cost of motoring, young drivers are finally seeing
some relief. While insurance still makes up over half of the cost of getting on the road,
the overall expense has reduced significantly over the past six months. However, with
the majority of the reductions resulting from fuel costs which are subject to significant
volatility, costs may not remain on their downward trajectory for long.
While we have seen some clear reductions, the cost of getting on the road for a
young driver is still disproportionately high and likely to be prohibitive to many.
The unaffordability of running a car can have a significant impact on young people’s
ability to get to and from work, and ultimately hold down a job. Our recent research
found that 27% of young people fear that they would risk losing their job if they could
no longer afford to drive.
The Government needs to tackle these issues head on, which is why
comparethemarket.com has called on the Government to scrap or cap Insurance
Premium Tax for young people to help ease the financial burden of car ownership.
Dan Hutson, Head of Motor Insurance at comparethemarket.com
Insurance Fuel Est. VED (Road Tax) Breakdown cover MoT
£44.97
£126
£54.85
£1,281.00
£785.25
Cost of running a car (17–24 year-olds) over the last six months
Insurance costs for young drivers have
begun to decrease after a long period
of rising premiums. Over the past six
months, the average premium for a
17–24-year-old dropped by 3.3% to
£1,281. Over the past year, premiums for
the age group have fallen by 5% which
equates to £67.
The fall in insurance costs over the last
year is likely down to lower competition
in the car cover market, as insurers are
now offering more competitive renewal
rates to try and retain customers.
However, even though premiums have
fallen slightly, there is still a significant
difference between the price motorists
pay by sticking with their insurer
versus shopping around, providing
an opportunity for savvy motorists to
save money. On average, the cheapest
premium on offer for 17–24-year-olds
stands at £1,018 – over £260 lower than
the average premium paid.
The fall in insurance costs follows a
period of significant hikes, primarily
driven by Government changes such as
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The cost of insurance to young drivers
Key Statistics
• Average insurance for 17–24-year-olds stands at £1,281 – accounting for over half (55%)
of a young driver’s first year running costs
• Premiums for this age group slightly fell by 3.3% over the past six months, reducing bills by £43
• Young drivers could reduce insurance costs by nearly £263 on average by shopping around
Insurance Premium Tax increases and
changes to the ‘Ogden’ personal injury
discount rate. Changes to the ‘Ogden’
personal injury discount rate – used
to calculate compensation for large
payouts to those with life-changing
injuries – announced in February 2017
led insurers to increase premiums to
cover the larger claims that the rate
would set.
Motor insurance premiums for 17–24-year-old drivers (Six months to January 2018)
Shop around price Average price Saving
£1,018 £1,281 £263
Alongside the discount rate change, the
Government announced a number of
increases to Insurance Premium Tax (IPT)
which doubled from 6% to 12% in a two-
year period from 2015. The higher taxes
on policies pushed up the premiums
for customers by an average of £165 for
young drivers. The tax disproportionately
affected young people as the average
increase for all ages stood at £66,
meaning that those could afford it least
were made to pay the most.
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When the Government implements blanket tax increases where costs
rise by a percentage of your premium, those who already pay high
insurance costs will be disproportionally affected. This can have far-ranging
consequences, impacting people’s ability to travel to work or visit their
families. An extra £165 a year is a huge extra cost for young drivers to bear.
Fortunately, the direction of travel for insurance premiums seems to be
more positive as costs have decreased slightly over the past six months.
However, young people still stand to save over £260 by switching their car
insurance, which could make a huge difference for many.
Dan Hutson, Head of Motor Insurance at comparethemarket.com
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What is the best car for your budget?
comparethemarket.com analyses the most cost-effective cars for young drivers.
• 17–24-year-olds could save an average of £416 on insurance by choosing more cost-effective
cars instead of some of the most popular models
• Vauxhall Corsa is the most popular car for drivers aged 17–24 years old
• The Ford Ka and the Fiat 500 are the only cars to make both the list of most popular cars
and the cheapest cars to insure
While many people won’t
want to think about the
insurance costs when going
through the excitement
of buying a car, it is an
important consideration.
You could save hundreds, if
not thousands of pounds,
over the lifetime of a car
by picking a model that is
cheaper to insure. There are
examples of cars which are
both affordable to buy and
manage. The Fiat 500, for
example, costs an average
of £4,944 for the car and an
average of £892 to insure.
Young people looking to get
on the road would be wise
to research the insurance
costs upfront before taking
the leap of buying a car
Dan Hutson, Head of Motor Insurance at comparethemarket.com
Young drivers could save over £416
by choosing a more cost-effective car.
Research from comparethemarket.com
found that the average premium of the
top ten cheapest cars to insure stood at
£864 for 17–24-year-olds, compared to
an average of £1,281 for the age group.
However, the savings in insurance
are offset by the cost of the car itself.
The average cost of the most popular
cars stands at £4,040 compared to an
average of £6,506 for the cheapest car
to insure.
The Vauxhall Corsa retains the top
spot as the most popular car for young
drivers, accounting for 12.24% of
enquiries and costing an average of
£3,050. The Ford Fiesta and the
Volkswagen Polo took second and
third spots for the most popular cars
accounting for 11.14% and 6.25% of
enquiries respectively.
The Fiat 500X has taken the top
spot as the cheapest car to insure,
costing an average of £814 per
year for a young driver, but with
an average value of £10,110. The
regular Fiat 500 is significantly more
expensive to insure, at an average
of £892, but with a considerably
lower average value of £4,944. The
Fiat 500 is one of the most popular
models amongst young drivers,
accounting for around 3% of all
enquiries from young drivers.
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Cheapest Cars to Insure for 17–24-year olds
Model Average premium Average car value
Fiat 500X £815 £10,110
Seat Arona £820 £18,812
Volkswagen Up! £836 £5,350
Mini First £848 £3,477
Skoda Citigo £876 £5,236
Ford Ka+ £876 £8,658
Toyota Iq £889 £2,593
Fiat 500 £893 £4,944
Suzuki Splash £895 £2,860
Citroen C1 £896 £3,024
Most Popular Cars for 17–24-year olds
Model Average premium Average car value
Vauxhall Corsa £1,274 £3,050
Ford Fiesta £1,221 £4,322
Volkswagen Polo £1,199 £4,839
Renault Clio £1,152 £2,478
Vauxhall Astra £1,520 £3,279
Volkswagen Golf £1,571 £5,835
Fiat 500 £893 £4,944
Ford Focus £1,389 £4,750
Seat Ibiza £1,226 £4,857
Ford Ka £964 £2,049
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Methodology
All data on insurance and breakdown
cover, as well as insight on car
models, has been sourced through
comparethemarket.com. All other data
has been sourced through Gov.uk.
A young driver is defined in this research
as drivers aged between 17 and 24 years
old.
When the average price is referred to,
this is the mean average of the top five
cheapest prices presented to a customer,
where a consumer has clicked through to
buy. Buying from the top five cheapest
prices presented, represents 90% of all
car insurance sales.
When the cheapest price is referred
to, this is the average cheapest price
presented, where a customer has clicked
through to buy.
All premium data refers to motor
insurance products featuring
comprehensive, third party fire and theft
or third party cover.