Young drivers have seen their car insurance costs drop by £160 on average, offering a welcome relief to millions of new motorists.
According to a new report, on average premiums for motorists under 25 fell to £1,769 in October 2024, down from £1,929 in the same month last year.
The decline marks a significant reduction in costs for young drivers, who have been hit with higher insurance premiums than any other age group.
While the lower costs are welcome, insurance still represents 63 per cent of the total cost of running a car for young motorists, who are currently paying an average of £2,829 in annual driving costs compared to £3,109 in 2023.
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Young drivers have typically been hit with the most expensive car insurance prices
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But research did reveal that October marked the third consecutive month of falling premiums for young drivers, with the first annual decline recorded in August.
Julie Daniels, motor insurance expert at Compare the Market, said: “Young drivers will welcome falling insurance premiums as motorists in this age group typically face higher premiums.
“However, motor premiums remain historically high, and many young drivers will still struggle to pay more than £1,500 for car insurance, so it is important they compare prices online before renewing with their existing insurer.”
She added: “Through proactively shopping around, young motorists could save by switching or find a deal that is more suitable for their circumstances such as a telematics or pay by mile policy.”
August and September 2024 were the first months since June 2022 when car insurance prices became more affordable year-on-year.
A recent survey by Compare the Market revealed that 75 per cent of young motorists have struggled with driving costs.
Nearly a third (31 per cent) found it difficult to pay their premium in the past six months, while 60 per cent planned to take on additional debt to afford keeping their car on the road.
But more worryingly, the financial strain has broader implications, with 19 per cent of young drivers reporting their social lives have suffered due to driving costs.
For 15 per cent of young motorists, the high costs have even impacted on their employment situations. The total annual cost of running a car for young drivers has decreased by £280, dropping from £3,109 in 2023 to £2,829 in 2024.
The decline isn’t just due to lower insurance costs, the report also highlighted falling fuel prices, influenced by lower global oil prices and a stronger pound as contributing factors.
But a breakdown of costs revealed that insurance still remains the largest expense at £1,769 (63 per cent), followed by fuel at £815 (29 per cent).
Other annual expenses include Vehicle Excise Duty at £190 (seven per cent) and MOT costs at £55 (two per cent).
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The reduced fuel costs reflect a drop in petrol prices from £1.55 per litre in October 2023 to £1.34 in October 2024. Petrol prices are currently 136.31p per litre while diesel is 141.86p per litre.
