The cost of running a car for young drivers is at its cheapest level in nearly a decade thanks to a drop in insurance and fuel prices
- On average, young drivers will now pay £2,074 to run their car in the first year
- The average car insurance premiums for young drivers overall is now £1,095
- A decrease in the price of insurance and fuel is the reason for the drop
The cost of running a car for young drivers fell £296 annually, new research has revealed.
On average, a driver under 24 will now pay £2,074 to run their car in the first year – the cheapest annual running cost since 2015, according to data from Compare the Market.
A decrease in fuel prices and insurance costs, mainly as a result of fewer cars being on the road during the pandemic in the last year, have been given as the reason for the plunge.
Meanwhile, the average car insurance premiums for young drivers overall is £1,095, the cheapest figure since 2012.
The cost of running a car for young drivers is at its cheapest level in years due to the pandemic
The research compared the prices of running a car for young drivers from November 2019 to January 2020 to November 2020 and January 2021.
It found the cost of driving had been rising in recent years, approaching a point where it would have been unaffordable for many young people.
However, over recent months, the drop in the cost of insurance and fuel has balanced out the increases seen in previous years.
Car insurance is still responsible for 53 per cent of overall car running costs but this cost has declined dramatically in the last year as the pandemic has reduced the number of cars on the road.
The average car insurance premium for young drivers now stands at £1,095, representing a £169 – equivalent to 13 per cent – drop year-on-year and the lowest average cost since Compare the Market’s research began nine years ago.
The cheapest premium available to young drivers has also fallen by £113 year-on-year to cost an average of £918.
| Cost name | Cost | % of total cost |
|---|---|---|
| Insurance | £1,095 | 53% |
| Fuel | £763 | 37% |
| Est. VED (Road Tax) | £125 | 6% |
| MOT | £55 | 3% |
| Breakdown cover | £36 | 2% |
| Total cost per year | £2,074 | 100% |
| Source: Compare the Market | ||
This means young motorists could typically save an additional £177 by switching to the best deal when their policy comes up for renewal.
In addition, annual fuel costs have plunged in recent months as the price of petrol has fallen and motorists expect to drive fewer miles in 2021.
A typical young driver will now spend £763 on fuel, driving an average of 7,347 miles over the course of a year.
This cost has dropped from £884 at the start of 2020 when the average young motorist drove for 7,480 miles.
Despite these savings, separate research from Compare the Market last year, found that 47 per cent of young drivers with a full or provisional driving licence said the financial impact of coronavirus made it harder for them to afford the running costs of their car.
| Model | Average Premium | Average Value |
|---|---|---|
| Volkswagen Up! | £636 | £4,542 |
| Citroen C1 | £704 | £2,764 |
| Peugeot 108 | £705 | £4,553 |
| Hyundai i10 | £719 | £3,670 |
| Fiat 500 | £723 | £4,082 |
| Ford Ka | £745 | £2,207 |
| Vauxhall Adam | £747 | £5,409 |
| Kia Picanto | £762 | £3,145 |
| Toyota Aygo | £775 | £3,825 |
| Peugeot 107 | £776 | £1,585 |
Although motoring costs are down for now, the wider economic impact of the pandemic on younger generations means many are still feeling the pinch.
Dan Hutson, head of motor insurance at Compare the Market, said: ‘Young people will be relieved that the cost of driving has fallen so dramatically and this will hopefully ease some of the financial strain many are under.
‘With young drivers paying the highest insurance premiums, the recent drop in prices should prevent policies from becoming prohibitively expensive but the biggest savings will only be available to drivers who shop around for the best deal.
‘Young drivers should also remember to speak to their insurer if their current or expected mileage has reduced due to the pandemic, to see if a reduction in premium is possible, and explore whether a telematics based policy could be cheaper for them.’
Motorists are also set to experience higher fuel costs than they were paying before the current lockdown measures were put in place, with pump prices surging on the back of oil increasing at the start of 2021.
Latest figures show that petrol is 7.5p-a-litre more expensive than it was in December and experts have predicted it will continue increasing over the coming months.
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