Exploring why car insurance for young drivers costs more

Discover why it can be challenging for young drivers to navigate car insurance and why it may come at a much higher cost.

In 2023, the 17-25 age group accounted for 22% of total driver fatalities in Australia (drive.com.au 2024). This is a worrying statistic that highlights the increased risk associated with young, inexperienced drivers which plays a part in contributing to higher costs of car insurance for this demographic.

As a young driver, or the parent or guardian of a young driver, it’s important to understand the factors that can influence car insurance rates. By having the relevant information, you can take the necessary steps to manage costs and ensure that adequate coverage is obtained while building a responsible driving record.

Higher car insurance for young drivers isn’t just about age discrimination. Several factors can influence these higher rates including statistically higher accident rates, lack of driving experience, and high-risk driving behaviours can all play a role in increased insurance. Making a conscious effort to address these behaviours can help reduce insurance premiums over time.

Key factors influencing higher car insurance for young drivers

By keeping a close eye on the factors that can influence higher car insurance rates for young drivers, you can make active changes that can help reduce premiums in the long run.

fatigue and take breaks

Lack of driving experience

Inexperienced drivers are at higher risk of making mistakes while driving which increases the likelihood of accidents and insurance claims. Insurance companies consider young drivers to pose a higher risk on the road due to their limited exposure to driving and responding to different scenarios and conditions.

Higher accident rates

Higher accident rates

According to the Insurance Institute for Highway Safety (IIHS), young drivers between the ages of 16 and 17 are almost three times more likely to be involved in fatal car crashes than drivers who are 20 years and older. This creates a bigger risk and can often result in higher insurance costs for young drivers.

Distracted driving

Riskier driving behaviour

Studies have shown that young drivers are more likely to engage in risky behaviour like driving while distracted, speeding, driving under the influence, and more. Any one of these behaviours can instantly increase the risk of a crash, which can influence how insurance companies set their premiums and other costs.

Choice of vehicle

Choice of vehicle

Young drivers prefer flashier, sportier, or high-performance cars which can lead to high repair costs if met with a collision on the road. Insurance companies consider everything from vehicle type to associated repair expenses and more when calculating the premiums, making vehicle choice an important factor.

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Research from NSW indicates that 15- to 25-year-olds have a 75 per cent greater chance of being injured at work



Research from NSW indicates that 15- to 25-year-olds have a 75 per cent greater chance of being injured at work


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Youthsafe: Helping young people in Australia

Youthsafe is dedicated to empowering youth across Australia. Our wide range of programs and resources helps improve young driver’s safety and more including safety at work, while socialising, and during sporting events.

Our educational workshops, driver safety programs, and more are designed to create safe environments for young people. We aim to promote better responsibility and accountability for their safety and the safety of those around them by building a better support system that offers them the guidance they need.


Can taking a defensive driving course help lower my insurance rates?

Yes. Completing a defensive driving course can help drive down insurance premiums as it teaches safe driving practices, risk management, and hazard awareness which can help reduce collisions. You can check with insurance companies to see what type of cost benefits you are eligible for based on the successful completion of these courses.

Can adding a parent or experienced driver to my policy help reduce my insurance costs?

Yes. Adding a parent or experienced driver with a clean driving record to your policy can lower insurance rates. Insurance companies view this as a mitigating factor as they assume young drivers will be guided by their adult influencers.

How can parents help get lower rates of car insurance for young drivers?

Parents play an active role in helping young drivers secure lower insurance rates. One effective strategy is to add the young driver to the family's existing car insurance policy.

Parents can also encourage their young drivers to maintain good grades, as it’s something that many insurers consider. Monitoring the young driver's driving habits and providing guidance on safe practices can also help build a responsible driving record.