The annual motoring bill is now £2,440 between ages 17 and 24, having risen by £140 in the last two years and this does not even cover the cost of buying or repairing a car.
Driving is expensive for everybody at £1,847 a year but with a little effort most of us can trim down the cost.
After the car itself insurance is the biggest cost for new motorists, with the average premium costing £1,324 a year, according to the latest young drivers report from CompareThe Market.com. However, by shopping around for cheaper cover they could save up to £258, with the cheapest premium in this price range £1,066.
They can also cut the cost by switching to a cheaper car. The most popular motor in this age group, the Vauxhall Corsa, costs £1,325 to insure while the cheapest, the Dacia Sandero, costs on average £882 and the Fiat 500 costs £898.
Young motorists also fork out on average £891 a year for fuel, £115 for road tax, £54 for an MOT and £56 for breakdown cover.
Dan Hutson at CompareThe Market, said the Treasury is largely to blame for recent increases after doubling insurance premium tax (IPT) to 12 per cent in just three years, adding £161 to average young driver premiums. He called on the Government to abolish IPT for under-25s.
“The cost of keeping a car is hitting young people’s ability to commute and hold down jobs.”
This is expensive for parents too, as nearly three-quarters now help their children by contributing on average £763 a year towards insurance, petrol, repairs and taxes, Hutson added.
HONESTY IS BEST POLICY
The average renewal premium for all motorists is £794 but drivers could cut that to £429, saving £365, by arranging a new policy three weeks before renewal date which is the optimal time to switch.
Chris Sykes at MoneyBarn.com, a car and van finance lender, said the savings depend on your personal profile: “Insurers base their prices on risk factors such as the driver’s age, gender and profession, so search the market to find out which is cheapest for you.”
Remember to calculate your annual mileage accurately as this will partly determine your premiums: “Skew it too low and you could invalidate your policy.”
Young motorists could save up to £800 a year by adding an adult to their policy. However, they should avoid “fronting”, pretending that an older relative is the main driver, as this counts as fraud. If you can afford it, pay your full premium up front, Sykes added. “If you pay in monthly instalments this is treated as a loan and you could pay an APR of up to 20 per cent.”
Also, make sure you don’t pay twice for something you already have: “Banks include motor breakdown cover with some accounts, so check what you have.”
HONESTY IS THE BEST POLICY
Taking out a higher voluntary excess could also cut your premiums, just make sure you can afford to pay it if you need to claim, warned Sykes.
Insurers offer no-claims discounts of up to 65 per cent for drivers who have not claimed in five years so take good care of yours. Young drivers should also consider telematics “black box” insurance which rewards safer motorists, offered by Admiral LittleBox, Carrot, Coverbox, Direct Line DrivePlus, Hastings Direct Smart Miles and Marmalade.
Insurers Adrian Flux, Axa, RAC and Swiftcover offer insurance premium discounts of up to 15 per cent to customers who install a dash cam but check if you need to buy a specific camera make or model.
There may be some respite on fuel costs with wholesale petrol costs falling 3p a litre this month which could trigger a supermarket price war, the AA said.