Car Insurance For New Drivers Under 25 – Drivers under the age of 25 may find that car insurance can be more expensive for you than for those older than you. So why does this happen?
Unfortunately, traffic accident statistics are against you. In short, the younger you are, the less experienced you are. In fact, the most common profile of drivers who cause accidents or serious accidents are young people between the ages of 16 and 24.
Car Insurance For New Drivers Under 25
As a result, young Australians may be charged higher car insurance premiums in some cases. However, there are ways you can reduce these costs.
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New drivers in Australia are considered ‘high risk drivers’ by insurance companies, according to the NRMA. In fact, young drivers (aged 17-25) account for a quarter of all road traffic accidents in Australia, even though only 10-15% of the population are licensed drivers.
The premium or cost you will pay for your car insurance policy is directly affected by the risk profile of your driver. In general, insurers charge higher premiums for high-risk policyholders and vice versa for low-risk policyholders.
Insurers will collect information about you to create a profile of the type of driver you are, such as:
This is done to quickly categorize the type of driver you are and the likelihood that you will need to make a claim.
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Unfortunately for young drivers, if you are under the age of 25, you are in this accident risk category. Therefore, you may be more likely to pay a higher premium.
According to CHOICE, young drivers between the ages of 21 and 24 pay an average of about $1,750 for comprehensive insurance. That’s nearly twice as much as older drivers between the ages of 45 and 65, who pay an average of $890.
However, the premium you can pay may not only depend on your age, gender or place of residence. It is also influenced by the type of car insurance policy purchased, the number of insurance claims submitted, the make, model and age of the car, as well as driving experience.
For example, a 23-year-old man driving a new car in Sydney is likely to pay more than a 30-year-old woman living in Perth driving a used model.
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In general, insurance providers need to know that you are a reliable, safe driver who is unlikely to get into an accident. As you get older and have more driving experience with fewer accident claims, your premiums may decrease.
When choosing car insurance, it may be worth looking for a quote. Compare policies offered by different insurers to see how their deductibles differ so you can try to find a policy that fits your budget.
If you live with your parents or siblings over the age of 25, your car insurance costs may be lower if they are listed as the primary driver and you as a co-driver on your car insurance policy.
It becomes cheaper, although adding a driver under the age of 25 to the policy may incur additional costs, such as an excess, which is part of the total out-of-pocket claim.
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You can also reduce your car insurance premium by choosing to pay an additional excess, sometimes called a voluntary excess. However, you should check with your insurance if you could be liable for other types of excesses, which will increase the amount you pay out of pocket.
For drivers under the age of 25, driving smaller, more commonly sold car models can also help lower car insurance premiums and build a claim-free driving history. You can also convince insurance providers to pay less for your car insurance by taking a defensive driving course.
Before you start looking for car insurance that fits your financial situation, carefully consider your driving situation. For example:
The answers to these questions can help you decide which car insurance policy is right for you and avoid buying the expensive policy you might need.
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You may also need to look at coverage and deductible limits to make sure you don’t miss out on unexpected expenses. You can also consider not only checking car insurance quotes online, but also buying your policy online as you can get a discount for doing so.
While you may not find an insurance policy suitable for drivers under the age of 25, you can try to get a policy that is at least suitable for the type of driver you are and the amount of driving you plan to do.
This article was reviewed by Peter Terlato prior to publication as part of a fact-checking process.
Alex Ritchie has been a personal finance writer and editor and has been writing about Australian finance for over six years. Her expertise and interests include lending, credit, tenure and addressing the gender pay gap, and she aims to help young Australians overcome their financial uncertainty. In addition, Alex has been featured in a variety of publications including Money Magazine Australia, Business Insider, Lifehacker Australia and in health via NPS MedicineWise.
Cheap Car Insurance For Drivers Under 25
Car insurance 24/10/24. 4 min read Different types of car insurance in Australia There are several types of car insurance policies available in Australia, offering different levels of cover to suit drivers in different situations. Mark Bristow Personal Finance EditoJournalist is supported by our readers. We may earn a commission when you make a purchase through a link on our site. Why do you trust us?
Whether you’re buying your first car or borrowing another, you’ll need car insurance if you’ve passed your practical driving test.
Unfortunately, new driver insurance can be very expensive due to your lack of driving experience. But keeping it in your name will allow you to build up a no-claims bonus (NCB), which could mean access to cheaper car insurance in the future.
New driver insurance is car insurance for people who have just passed their driving test. New drivers can apply for standard car insurance or special products designed for new or new drivers such as telematics policies or recording policies.
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Regardless of the type of car insurance you choose, it’s important to understand the different levels of coverage and what each one includes:
Finding cheap insurance for new drivers can be difficult. Because young or new drivers, statistically more often get into accidents due to lack of driving experience.
However, this drops by 57 per cent to £3,329.94 when the same driver turns 18 and has driven for a year.
The more experience you get, the lower your car insurance premium will be – and it’ll be cheaper if you build up a no-claims bonus at the same time.
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How much a new driver pays for car insurance depends on a variety of factors, with age being almost at the top of the list. For example, the cost of new driver cover has fallen from £7,813.51 for a 17-year-old to £1,615.73 for a 27-year-old.
Some cars are more expensive than others, so it’s worth checking out different vehicles before buying a used or new car. (Adobe)
We’ve rounded up the best tips for trying to keep your insurance costs down and getting the cheapest car insurance available for new drivers.
After you’ve had your car insurance policy for a year, your insurance company will send you a renewal notice, but you don’t have to accept it. In fact, if you can help it, we strongly recommend not automatically renewing your car insurance. Instead, compare prices elsewhere and be sure to mention that you have an NCB if yours is still intact.
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It’s best to buy your car insurance about three to four weeks before your renewal date – research shows drivers who leave it until the day their insurance is due to renew can end up paying more.
Use a quote comparison site to compare new driver car insurance quotes from different insurance companies. Premiums can vary for new drivers as some insurers refuse to accept these customers and others deliberately exclude themselves from the market.
When buying your first car, check the insurance group you want to buy. All cars are divided into insurance groups from one to 50 – the more powerful and expensive your car is, the higher the insurance group and the more you will pay. Cars like the Fiat Panda, Ford Ka Plus or Nissan Micra are in Group 1 and are therefore the cheapest to insure. If an old or used car is purchased, the insurance premium may be lower due to the lower value of the car. However, it will not be universal.
Your policy excess is the amount you have to pay for each claim. It is imperative to increase all policies; adding a voluntary excess can also reduce your premium, but make sure it’s an amount you can comfortably afford in the event of a claim.
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If you can afford it, it’s best to pay your car insurance premium in one lump sum each year. Most insurance companies offer the option to pay monthly, but this is more expensive.
As a new driver,