Car insurance costs for young drivers have rocketed over the past year as a result of controversial government tax and policy changes.
Drivers between 17 and 24-years-old now typically pay £2,379 to run a car in the first year of driving – up 3.4 percent from a year ago, according to comparison website comparethemarket.com.
Car insurance accounts for more than half of the cost, with youngsters forking out on average £1,354 for cover, an increase of 8 percent.
The sharp rise in insurance has pushed up the total bill for young drivers, despite a fall in the cost of fuel.
The report is the latest to blame tax hikes and controversial government reforms to serious personal injury compensation pay-outs for the rising burden on drivers.
A change to the Ogden discount rate – used to calculate personal injury compensation pay-outs – as well as a hike in Insurance Premium Tax (IPT) from 10 percent to 12 percent, has had a ‘significant impact on insurance premiums’, it said.
John Miles, head of the motor at comparethemarket.com, said: ‘The price of insurance remains the single biggest cost for young drivers by far and the cost of cover continues to rise rapidly.’
But despite the year-on-year rise, young drivers’ costs have dipped in the past six months for the first time in two years.
Vehicle running costs for 17 to 24-year-olds between February and July fell by 0.75 percent. The fall in the cost of fuel has been the primary factor, dropping by almost £70 to an average annual spend of £811.
The analysis of fuel costs, which is based on average annual mileage and the cost of premium unleaded petrol, found that in the past year the average cost of fuel fell by £47.
Mr Miles added: ‘These past six months have seen the first positive change for young drivers in a long time. However, because the fall is due to lower fuel prices, there is no guarantee that this trend will last over the longer term.’
But despite the year-on-year rise, young drivers’ costs have dipped in the past six months for the first time in two years.
The RAC has predicted that the price of unleaded petrol will soon hit the highest level in more than two years due to Hurricane Harvey.
The motoring group predicted on Friday that forecourt prices could rise by up to 4p per liter in the coming days because of the shutdown of large refineries on the Gulf Coast of the US.
This would take the average price above £1.21 per liter, making unleaded more expensive than diesel for the first time in over a year.