New data shows that young drivers are spending up to 10% of their full-time income on car insurance. For those as young as 18, annual premiums are nearly £2,000, with costs rising significantly each year.
The average insurance cost for drivers aged 18 to 21 is now £2,350, a 17% increase from last year, according to Confused.com. This means that about 9.9% of their £23,668 average salary goes towards insurance. Drivers in their 20s are also feeling the squeeze, with premiums averaging £1,484—an 11% increase over the past year, eating up 5% of their average £32,172 salary.
Paying for insurance monthly can add up to 50% more due to high interest rates. According to consumer group Which?, some providers charge as much as 45% APR. For example, iG04 quoted a monthly plan at £1,158.11 compared to £999.65 if paid upfront. Other major insurers also have high APRs, ranging between 26.9% and 33.8%.
High insurance costs and living expenses are affecting driving habits. A recent survey revealed that 22% of drivers are driving less due to high costs, and 42% think insurers need to lower prices. One-third believe the government should enforce stricter regulations on insurance pricing.
Confused.com’s data highlights that drivers under 38 are facing annual insurance costs of over £1,000. The biggest increase is seen in 17-year-olds, with premiums rising by 33%—though 18-year-olds still pay the most, averaging £2,960 after a 23% increase in a year.
Overall, it now costs an average of £7,609 for a 17 to 20-year-old to get on the road for the first year, up 135% from 1989. Many young people can’t afford this without parental help, and most under-25s who’ve delayed learning to drive say it’s due to the high cost.
