CAR RUNNING COSTS RISE FOR YOUNG PEOPLE
CAR RUNNING COSTS RISE FOR YOUNG PEOPLE
Annual cost of running a car for 17-24-year-old drivers increases by £139 over last six months to £2,370, following fuel and insurance premium rises
Average insurance premiums for 17–24-year-olds increase by £44 (3.6%) over the past six months to £1,264
Fuel costs jump by £95 in the last six months to an average of £884 per year
comparethemarket.com is calling for an amnesty from insurance premium tax for young people, to help keep young drivers on the road.
27 February 2020 – The cost of running a car for young drivers has increased by over 6% in the past six months, primarily driven by increases in fuel and insurance costs, according to comparethemarket.com’s latest Young Drivers research. On average, a 17-24-year-old driver will now pay £2,370 to run his or her car in the first year, of which more than half (£1,264) is the cost of insurance.
The research analyses the cost of insurance, fuel, road tax and breakdown cover. The increase over the last six months follows a year where costs had been reducing for young drivers. The annual amount paid by 17 to 24-year olds fell to a three-year low of £2,231 six months ago. But, over the past six months, increases in the cost of insurance and fuel have eradicated the reductions made over the previous period.
Insurance premiums are one of the primary drivers behind the overall increase in costs for young drivers. Over the past six months, the average premium for a 17-24-year-old jumped by 3.6% to £1,264. However, over the past year, premiums for the age group have fallen by 1.3%, equating to £17.
Cost of running a car (17-24 year olds); last six months
|Cost name||Cost||% of total cost|
|Est. VED (Road Tax)||£125.00||5.27%|
|Total cost per year||£2,370.39||100.00%|
The new statistics follow recent comparethemarket.com research which found that insurance premium tax (IPT) disproportionately impacts young people. IPT, which currently stands at 12% of the cost of a premium, adds an average of £134 to the policy of someone aged between 17 and 24. This compares to an average of £77 for the rest of the UK. The cost of IPT gets progressively lower as you get older, as your premium generally reduces.
IPT adds to the already high cost of driving for young people. According to recent research, 83% of 17 to 24-year- olds agree that their pay cheque is not high enough to cover the cost of driving. If motoring costs continue to rise, 63% of young people say that they will no longer be able to afford to run a car. The high cost of motoring has forced many to turn to their parents for help with nearly half (49%) receiving an average of £485 in financial support a year to stay on the road.
comparethemarket.com is calling on the Government and the new Chancellor to scrap insurance premium tax (IPT) on policies for people aged 17 to 24 to combat the already prohibitively high cost of driving.
Dan Hutson, Head of motor insurance, comparethemarket.com said:
“The idea of driving is something that a huge number of young people look forward to. For the first time, you have freedom to travel as you please. But this is increasingly becoming a pipe dream for younger generations. Both insurance and fuel costs have jumped significantly over the last six months, meaning that even if people save the money to buy a car, it will be a serious challenge to afford the ongoing running costs.
“Our research indicates that a majority of young people cannot cover their costs on their pay cheque alone. Without a car, many young people say that their jobs and social life would suffer. Insurance Premium Tax is a ‘youth mobility tax’, forcing those that can least afford it to pay the most which impacts not only physical but social mobility. We are calling on the Government to exempt young people from IPT to help them stay on the road and make the system fair.”
Notes to editors:
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