The cost of car insurance for young drivers has surged by an average of £594 (50%) in the past year, according to new Young Drivers research from Compare the Market.
There are concerns that driving is becoming increasingly unaffordable for many young people.
Premiums for motorists aged under 24 now reach up to £1,792 in August 2023 compared to £1,198 in the same period last year.
As a result of the increase in premiums, car insurance now represents 63% of the total car running costs for young drivers. Young drivers are facing higher car insurance premiums which may in part be due to repair cost inflation.
Compare the Market’s research also found that the typical cost of petrol for young drivers has fallen by £147 in the past 12 months, from £982 to £836 for a motorist driving 6,500 miles per year. The total annual car running cost is now £2,863 on average for a young driver. This is a 19% increase from last year when the average running cost was £2,400.
Julie Daniels, 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.”
The company also revealed that almost one quarter (22%) of parents with children who own their own car could be risking a hefty fine, points on their licence and a criminal record for ‘fronting’ their child’s policy.
‘Fronting’ is when a driver who is older or more experienced- likely a parent- claims that they are the main user of the car when in reality it is mostly driven by a young person, or other high-risk motorists, in order to reduce the cost of car insurance.
The research from Go.Compare surveyed over 550 parents of children aged 17-25 who own their own car and found that almost one-quarter of those parents had that child listed as an additional driver on their own or partners auto insurance, instead of the child having their own policy. If the child is listed as an additional driver when they are the sole user of the car, this is technically insurance fraud and therefore illegal.
These figures were highest in London and Yorkshire and the Humber, with 29% saying their child’s car insurance was in their name, highlighting these as areas with potentially the highest number of fronted policies. With almost two thirds (65%) of parents saying that the cost of car insurance was one of their biggest concerns, it’s a tempting path for many parents. A majority of 52% of those parents whose child’s policy is not insured in their name would consider insuring their child’s car on a policy in their name, an increase of 3% from 2022 survey results.