Young drivers pay 115% more on car insurance

01 July 2008

7% of the market pay for 22% of total premiums

Young drivers in the UK are paying more than double the national average for their car insurance premiums, according to new figures released yesterday.

The figures from uSwitch.com show that young drivers, aged between 17 and 25, pay an average annual premium of £989, 115 per cent more than the national average of £439.

The site also claims that although this age group of drivers only accounts for 7% of the car insurance market, they pay for 22% of all premiums across the industry.

Additionally, uSwitch’s figures indicate that young drivers fork out 69% of the value of their car on their car insurance premiums.

The comparison website said that the car insurance industry could be facing consequences from the new Equalities Bill being introduced by the Government to fight age-based prejudice because of the major importance of age for insurers pricing policies based on risk.

Ashton Berkhauer, insurance expert at uSwitch.com, said: “In theory, the Equalities Bill could mean the end of the road for higher premiums for young drivers.

“However, insurers have to price by risk and there is clear evidence that younger drivers are more of a hazard on the roads.

“If the Bill calls for pricing to be equal across age groups this could lead to a rise in premiums for lower risk, safer drivers, who would effectively be subsidising their higher risk counterparts.

“Whether the Equalities Bill impacts young driver premiums or not, the most important thing is to research the cost of insurance before you buy a car. Young drivers must do their homework first and shop around to make sure they find the best cover and policy features to suit their needs and budget,” he advised.

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