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Young drivers spend over £2000 a year running a car

Running a car is never cheap but our latest Young Drivers report shows that 17-24 year olds are spending a whopping £2,299 per year to run a car. This represents a £98 rise in the last six months, primarily due to increased petrol costs in line with global oil prices. Of that, car insurance accounts for over half (54%) of young drivers’ annual costs. In fact, the average 17-24 year old spends more on insurance each year than petrol.


Insurance insight

This latest report shows that the average premium for 17-24 year olds currently stands at £1,257, a £10 increase compared to six months ago. This seems to be due to increases in Insurance Premium tax announced at the Autumn Statement in 2015 and the Budget in March 2016.

However, that’s £577.22 more than the average premium across all age groups (according to our recent Premium Drivers report). That’s because insurers see young drivers as particularly high risk, and therefore more likely to claim against their insurance. This is supported by research from Brake, the road safety charity, which shows that 23% of 18-24 year olds crash within two years of passing their driving test (we go into more detail on this here).

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car running costs chart

The costs keep coming...

But whilst insurance contributes to the overall outlay, young drivers have other high costs to consider to keep their car on the road.
As global oil prices rebound after the fall earlier this year, fuel has become a greater expense for anybody looking to run a car. July estimates from the AA, the average price of unleaded petrol was 112.2 pence per litre. This means that the average 17-24 year old is now paying a staggering £828 per year on fuel, up £88 in the last six months. This makes petrol, unsurprisingly, the second biggest annual outlay for young people running a car.

But that’s not it, there are of course further expenses we’ll all be familiar with. Other compulsory car related costs include road tax (on average £110) and MOT (on average £54). And for peace of mind, breakdown cover will set young drivers back £48 on average. So with the annual car running costs coming in at a massive £2,299 a year, it begs the question of how 17-24 year olds are ever meant to be able to afford to run a car.

What model's a must?

A question that’s left unanswered when we start to consider how much young drivers are spending on buying their car in the first place. Over the last six months, young drivers spent on average £1,757 on their first car. The most popular one quoted for by 17-24 year olds on our site remains the Vauxhall Corsa. Whilst the average value of the Corsa is just £1,336, the average premium presented to 17-24 year olds to insure it is £1,270!  

The second most popular model with that age group is the Ford Fiesta. With this model, the average premium comes in slightly lower at £1,220 despite the average car value coming in a little higher at £1,858. Coming in at number 10 on our list is the Fiat 500. Insuring one of these will set the average young driver back £895, despite the fact that the average value for the car is the highest on the most popular list at £2,919. 

Most popular cars table

Don't despair 

So, young people seem to be tied to a fate of paying a lot to get up and running on the road. But it’s not all doom and gloom, there are definitely things our young drivers can do to reduce their costs. As we reported earlier this year, telematics policies are on the rise and can help to reduce premiums for young drivers. 

cheapest cars to insure table

Choosing cheaper cars...

Young drivers also stand to save some money on their insurance by being a little wiser with their motor purchases. The report highlights that the only car on the most popular list that also makes it on to the top ten cheapest cars to insure list is the Fiat 500, which comes in at number 3. Yet the rest seem to remain less popular despite the fact that the average price for the cheapest cars to insure comes in at £913 – £320 less than the average price for the most popular car (£1,233). 

As you can see, the VW Up! heads up the cheapest cars to insure list once again, coming in at just £849 to insure, with the Hyundai i10 following in second, up two places from the last report, at just £891. Other cheap models to insure include the Suzuki Alto, Vauxhall ADAM and the Mazda 2.
Bringing up the rear of the list is the Nissan Juke, which young drivers can insure for just £944, despite the fact that the average value comes in at a rather high £5,691. You can read more on how to find the best car for your budget here.

Still savings to be had 

So if you’re a young driver, or you have one in your household, don’t let the costs deter you. Whilst it’s inevitably going to be more expensive for 17-24 year olds to get a car on the road, there are still savings to be had if you’re prepared to shop around and get the right deal. For example, those switch savvy youngsters among you could save £251 on average per year just by comparing premiums.**

Choosing the right car and finding the right insurance are two easy ways to reduce your costs. You can compare car insurance now and make sure that you’re getting the best deal for you.

**The average saving is based on the difference between the cheapest click-through price presented and the mean average of the top five cheapest prices presented to a customer, where a consumer has clicked through to buy.


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