Young drivers' car insurance premiums fall to a record low - five ways to keep on saving

Typical insurance costs for young drivers have fallen by 10% to £1,062, according to new research from Compare the Market.

The overall cost of running a car (including fuel, road tax, MOT, breakdown cover, and insurance ) for 17 to 24 year-olds has fallen £536 year-on-year in the first six months of 2021, coming in at £1,737 - the lowest figure since the comparison site started its 'Young Drivers' research in 2015.

Insurance makes up over half (61%) of that total, at £1,062, but the cost has dropped by 10% or £120 year on year.

However, the fall in price is likely to be a blip linked to the pandemic and young drivers still face the highest premiums of any age group.

Here, Which? takes a closer look at how car insurance costs vary by age, why the drop in cost for young motorists might be short-lived, and offers tips to keep premiums down if you are a young driver.

How age impacts car insurance premiums

Younger drivers typically face higher insurance premiums, as they're generally considered to be at greater risk.

The table below has the average premiums for the first six months of 2021, broken down by different age groups, according to Compare the Market.

_{Source: Compare the Market., 25 August 2021.}

As you can see, premiums fall as drivers age, reaching a low for motorists aged between 65 and 79.

Why cheaper car insurance premiums could be temporary

Many factors will influence average insurance costs, but certainly one of the biggest at the moment could be the reduction in how far people have been driving since the start of the pandemic.

Under the first Covid-19 lockdown, some - though not all - insurers offered customers rebates to reflect the fact that they were not on the road as much as they had estimated when their premiums were calculated.

We advised drivers to consider contacting their insurers to reduce their annual mileage estimates and receive a potential premium reduction or rebate.

This year, young drivers are insured to drive 3,541 miles on average, down over 50% from 7,347 miles the year before, according to Compare the Market.

Slashing this average distance in half will have contributed to the reduced insurance premiums and fuel costs young drivers have seen this year.

You might not be able to get used to these lower prices, however. With lockdown restrictions ended and more cars back on the road, this average mileage could increase to its pre-pandemic level, potentially dragging premium costs up with it.

• Find out more:how to find cheap car insurance

How can young drivers save on car insurance?

Since you're facing potentially the highest car insurance premiums of any age group, it's important to do all you can to find the best, most affordable policy for you. Here are our top tips for saving on car insurance if you're a young driver.

1. Pick an affordable car

Cars with smaller engines usually cost less to insure. So driving one of these instead of a larger vehicle might help you save.

Along with your age and mileage, the model of your car will make a difference to your insurance premium.

Compare the Market compiled a list of the most popular cars with 17 to 24 year-olds, along with what their average insurance premiums are. If you're considering buying one of the cars below, here's what you could be paying.

_{Source: Compare the Market, 25 August 2021}

2. Don't auto-renew

If you're a younger driver you might be please to see that your renewal quote is lower this year. However, it always pays to shop around.

According to Compare the Market, young drivers could save £178 by switching premiums instead of opting for auto-renewal.

Historically, the insurance 'loyalty penalty' has left long-term customers forking out more for insurance compared to new customers with the same insurer.

In May, the Financial Conduct Authority (FCA) announced it would ban the loyalty penalty by 1 January 2022, saving customers an estimated £4.2bn over 10 years.

In the meantime, shopping around when your insurance is due to expire is still the best way to secure the best price.

3. Read Which? reviews

Every year, we ask thousands of real car insurance customers who have claimed how they would rate their insurer.

We combine this with rigorous analysis of more than 73 elements of car insurance policies to create our car insurance reviews, separating the worst from the best.

Which? members can find out how insurers fared, as well as our list of Recommended Providers, in our best and worst car insurance guide.

• Find out more:best and worst car insurers revealed

4. Add a named driver but avoid 'fronting'

Sometimes, younger motorists get insured as 'additional' or 'named' drivers on their parents' insurance policies as a way to save money.

If you truly are a second driver, and not the main driver, of your parents' car, there's no problem with this. However, if you're actually using the car the most yourself, this is known as 'fronting' and it is technically insurance fraud.

Nearly one in four parents could be risking criminal charges by 'fronting' their child's car insurance policy, according to GoCompare.

The comparison website surveyed over 1,000 parents with children aged between 17 and 25 who were learning to drive or currently driving. Some 23% said they had insured their child's car in their - or their partner's - name, even though the car is their child's, not theirs.

If you do have your own car, it's important to have your own insurance policy. Otherwise, you and your family could end up facing serious consequences.

5. Try black box insurance

Some insurers offer discounts to drivers who install a telematics device - also known as a 'black box' - in their car.

These devices monitor how you drive to decide how safe your driving is. If you build up a good track record, you may get a discount or even a rebate on your premium. But driving badly could incur a penalty.

• Find out more:how black box car insurance works