The cost of running a car for young drivers has increased by an average of £385 in the past year, primarily driven by higher fuel and insurance costs, according to Comparethemarket’s car insurance team’s latest young drivers research.
On average, a 17- to 24-year-old motorist will now pay £2,448 to run a car for a year, which is the highest figure since this research began.
There are now concerns that driving is becoming increasingly unaffordable for many young people, based on the research which analyses the cost of insurance, fuel and road tax. A young motorist’s typical annual fuel cost has increased by £244 in 12 months, from £748 to £992.
Car insurance is responsible for half of the overall running costs (50%) for young drivers, who typically pay the most for car insurance compared to other age groups. The average annual premium for a motorist aged between 17 and 24 now stands at £1,236. This represents a significant £141 (13%) jump year-on-year due to the rising cost of repairing or replacing vehicles and the higher value of second-hand cars.
The increase in costs raises concerns that many young people do not earn enough to afford to run a car independently; research from Comparethemarket found that 76% of young drivers said their pay is not high enough to cover the rising cost of driving.
Concerningly, if motoring costs continue to rise, 68% of young people say that they will no longer be able to afford to run a car. More than eight in 10 (84%) are worried about petrol and diesel prices. To manage the rising costs, 44% of young people are driving less often, and 47% are set to take on additional debt to stay on the road.
However, young drivers can substantially reduce car running costs by shopping for cheaper car insurance deals. The cheapest annual premium typically available costs £978. This means young drivers can save an average of £258 if they switch to the cheapest premium when their policy ends. Switching to a telematics policy could also help young drivers save money on their insurance.
A telematics insurance policy fits a black box to your car, which monitors your driving and sends data to your insurer to provide a personalised quote. This data enables more accurate risk pricing and, therefore, could reduce premiums for those who demonstrate that they are safe drivers.
Julie Daniels, the motor insurance expert at Comparethemarket, said: ‘The rising cost of running a car among other soaring household bills mean that many young drivers could struggle to afford to stay on the road and may impact their ability to get into work or see friends and family. It is even more challenging once other costs, such as parking fees, breakdown cover, and car maintenance, are considered.’
‘As the cost of car insurance for young people has jumped by nearly £150 in the past year, it’s more important than ever to shop around and compare policies to see if a better deal is available. Switching to a telematics policy may be a good option for some young motorists.’
‘A quick and easy way to find a great deal ahead of your renewal is to sign up for automated car insurance renewal quotes from Comparethemarket, which will automatically notify you that your policy is about to end and highlight any available deals.’