28 February 2017 – The cost of running a car for young drivers has hit record levels again, according to comparethemarket.com’s latest Young Drivers report. Now standing at £2,397, the cost of running a car for young drivers rose by 4.2% in the past six months.
The report, which analyses insurance, fuel, taxes, MOT, general maintenance and breakdown cover, found that for drivers between the ages of 17 – 24, expenses have risen by almost £100 over the past six months compared to the previous six months. The biggest cause of the rise in running costs, has been the continued recovery in the price of oil over the past year, which led to a year on year jump in petrol costs of £140 or 19%.
Despite the huge rise in fuel costs, insurance remains the most significant cost for young drivers, rising by 3.9% over the past six months to an average cost of £1,306 per year, equating to an increase of £49.
To add to this, Insurance Premium Tax has been raised three times in the past 18 months – from 6% to 12% (from June 17), significantly adding to the cost of insurance as insurers are likely pricing in the latest 2% rise in the lead up to implementation in June 2017, adding £72 to the motor insurance bill for young drivers. These rises are disproportionately hitting young people, as the tax is based on the total value of policies, which is typically highest among the younger generation.
The cheapest premiums on the market for younger drivers has also continued to increase in price over the past six months, averaging £1,040 over the period and reaching a new high of £1,076 in December 2016. The cheapest premiums have risen by £33 since the last Young Drivers report in August.
The Vauxhall Corsa retains the top spot of the most popular cars for young drivers, accounting for over 13% of enquiries and costing an average of £3,110 to purchase. The Vauxhall Corsa is also slightly cheaper to insure than the average car, with an average premium of £1,297. The Ford Fiesta came in second, costing an average of £4,095 to buy and £1,259 to insure.