Car Insurance for P-Platers

If you're on your P-plates, you've probably already noticed that car insurance doesn't come cheap. There's a reason for that: according to the TAC, young drivers have the highest chance of being involved in a fatal crash among all road users once they get their P1 licence.

Just because car insurance for P-platers isn’t as cheap doesn’t mean it isn’t worth looking around for the best price and coverage on the market. That’s why it’s important to understand what goes into a car insurance policy and do your due diligence before you sign on the dotted line.

How much does car insurance cost for a P-plater?

As mentioned, car insurance for P-platers is significantly more expensive than it is for more experienced drivers. Premiums can vary widely depending on a range of personal and vehicle-related factors. The following table shows how much the average quotes are for young male and female drivers through Compare the Market:

As you can see, P-platers pay more on average for car insurance than L-platers or full licence holders of the same age. That’s because they’re the least experienced drivers and have driven the least overall, leaving them more prone to accidents or potential car write-offs in the eyes of insurers.

These quotes only represent the lower end of the scale, though. When it comes to P-platers, some insurers will charge as much as $6,000 or more for an annual comprehensive policy. More than anything that’s an insurer's way of telling you we think you’re high risk go anywhere else., That’s a clear signal from the provider that they don’t want to take the enhanced risk of insuring drivers of that profile.

Car insurance cost factors to consider for P-platers

• Your age: the younger you are, the higher your premium is likely to be, as insurers view younger drivers as inexperienced statistically more likely to make a claim
• Your vehicle: the make, model, age and value of your car all play a role. Older, cheaper and less powerful vehicles generally attract lower premiums
• Your location: drivers in metro areas or postcodes with higher rates of accidents or theft typically pay more than those in regional areas
• Your excess: choosing a higher excess can bring your premium down, though it means paying more out of pocket if you need to make a claim
• Additional excesses: many insurers apply an age-based excess for drivers under 25, which adds to the cost of making a claim on top of your standard excess
• Your driving history: any suspensions, demerit point losses or prior claims on your record can push your premium higher

How to get cheaper car insurance as a P-plater

• Compare policies

  Premiums for the same driver profile can vary substantially between insurers, so comparing your options before committing to a policy is one of the most effective things you can do to reduce your costs. Don't assume the first quote you see is representative of the market.

• Consider a higher excess

  Opting for a higher standard excess will generally bring your base premium down. Before going down this route, though, make sure the excess you choose is an amount you could realistically pay if you needed to make a claim, as you'll be required to cover it upfront before your insurer pays out.

• Check young driver excess reduction options

  Many insurers apply an additional excess for drivers under 25 on top of the standard excess, which can make claiming expensive. Some insurers offer the option to reduce this young driver excess in exchange for a higher base premium. If the excess is particularly high, this trade-off may be worth exploring.

• Avoid modifications

  Any modification to your vehicle that isn't declared to your insurer can void a claim entirely. Beyond that, modifications typically push your premium higher regardless. Keeping your car in its standard factory condition is the safest and most cost-effective approach.

• Pay annually rather than monthly

  Some insurers charge more for the convenience of monthly instalments. Where your cash flow allows, paying your premium as a lump sum annually is usually the cheaper option over the course of the year.

• Start building a claims-free history

  Even a single year without making a claim starts to build your no-claims history, which can translate into a discount at renewal. The sooner you start, the sooner your premiums will begin to reflect your actual driving record rather than your age alone.

Which type of car insurance is best for a P-plater?

There's no one “best” car insurance for a P-plater, as the right cover depends on your vehicle, budget and personal circumstances, as well as the amount of risk you’re willing to take on. Here's how each cover type stacks up for P-platers:

Comprehensive

Comprehensive cover is the highest level of protection available and covers damage to your own vehicle, as well as damage you cause to other people's property. For P-platers, it's worth considering if you're driving a valuable vehicle that would be expensive to repair or replace, or if you'd struggle to cover a large repair bill out of pocket.

If you've taken out a car loan to purchase your vehicle, comprehensive car insurance is a condition of finance.

Third party fire and theft (TPFT)

TPFT insurance covers damage you cause to other people's property, as well as loss or damage to your own vehicle caused by fire or theft. It's a middle-ground option for P-platers who own a vehicle of moderate value and want some protection for their car without paying comprehensive premiums.

If you park on the street overnight or live in an area with higher vehicle theft rates, the added theft cover may be worth the extra cost over a basic (or no) policy.

Third party property damage (TPPD)

TPPD insurance is the most basic level of optional cover and only protects you against damage you cause to someone else's vehicle or property. It won't cover your own car under any circumstances.

This can be a practical choice for P-platers driving an older, low-value vehicle where the cost of comprehensive cover outweighs what the car is actually worth. Keep in mind that if you're at fault in an accident, any damage to your own car comes entirely out of your pocket.

Compulsory third party (CTP)

CTP is mandatory for all registered vehicles in Australia and is typically included in or paid alongside your registration. It covers your liability for injuries or deaths caused to others in an accident but doesn’t cover damage to any vehicle or property.

Can I be on my parents' car insurance policy?

Yes, P-platers can be listed as a named driver on a parent's policy, provided they meet the insurer's eligibility conditions. For instance, most insurers require the P-plater to be a permanent resident of the same household, while you can’t be listed if you own the car you’re driving. It's worth checking the specific conditions with the insurer before assuming you'll qualify.

It’s worth noting that adding a P-plater to a policy will increase the premium, sometimes significantly. The size of the increase depends on the insurer, the P-plater's age and their licence stage, so it's worth getting an updated quote before assuming it's the cheaper option compared to taking out your own policy. An at-fault claim by a P-plater can impact their parent’s no-claim bonus, too.

Named vs unnamed driver in car insurance

There's an important distinction between being listed as a named driver and driving a vehicle as an unnamed driver. As a named driver, you're specifically covered under the policy at the agreed terms. As an unnamed driver, a higher excess will typically apply if you're involved in an at-fault accident, and some policies exclude unnamed drivers who regularly use the vehicle altogether.

If you're going to be driving your parents' car with any regularity, making sure you're listed on the policy is the safer and more financially sound approach for your family.

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