Car Insurance for Under-25s
If you’re a young driver under 25, compare a range of quotes online to help you find the best deal for your needs.
Fact checked
Are you under 25 and looking for car insurance? As a young driver, finding affordable car insurance can be a challenge, as many insurers consider those under 25 to be high-risk drivers. However, even if you don’t have much driving experience, it's still possible to find a policy that suits your needs and budget, especially when you compare online.
What types of car insurance policy can I buy as a driver under 25 and what do they cover?
As a driver under 25 in Australia, you have a few options when it comes to car insurance policies. It's important to understand what these policies cover before you buy them. Their key coverage areas are as follows:
| Comprehensive | TPFT | TPPD | CTP | |
|---|---|---|---|---|
|
Damage to someone else’s property |
✓ |
✓ |
✓ |
✖ |
|
Damage to your car due to fire |
✓
|
✓
|
✖ |
✖ |
|
Damage to your car due to theft |
✓
|
✓
|
✖ |
✖ |
|
Damage to your car due to weather |
✓*
|
✖ |
✖ |
✖ |
|
Damage to your car due to accident or collision |
✓ |
✖ |
✖ |
✖ |
|
Injury or death of someone else in an at-fault accident |
✖ |
✖ |
✖ |
✓
|
*Not all weather-related incidents are covered under a comprehensive car insurance policy. Check your PDS to find out what's covered and what isn't.
CTP insurance is different from the other types of cover in that it's mandatory for all drivers to purchase it. Depending on where in Australia you live, your CTP premiums may be included in the cost of vehicle registration.
How much will my car insurance policy cost if I’m under 25?
The cost of car insurance for drivers under 25 is typically higher than for older, more experienced drivers due to their higher risk of accidents. As a general rule, the younger and less experienced you are, the more you’ll pay for insurance. However, the actual cost of your car insurance policy will depend on several factors, including:
- Your age and experience: as mentioned, the older and more experienced you are, the less of a risk you’re likely to be seen as. This means that a new teenage driver, such as an 18-year-old, may pay more than what a 21-year-old would (though the difference may be marginal).
- Type of vehicle: the make and model of your car will affect the cost of your insurance policy, as some cars are considered higher risk due to factors such as their value, safety rating and cost of repairs.
- Type of insurance: comprehensive insurance tends to be more expensive than third party or third party fire and theft insurance, as it offers more coverage in the event of an accident or damage to your vehicle.
- Where you're living: if you live in an area with higher rates of accidents, theft or extreme weather, your insurance premiums may be higher to reflect this increased risk. For example, drivers in Queensland may pay more than in South Australia.
- Your parking arrangements: if you park your car in a garage or driveway, you may be eligible for a lower insurance premium compared to parking on the street.
- Your claims history: a history of making frequent insurance claims will likely result in your premiums being higher, as you’ll probably be considered a higher-risk driver.
- How much you use your car: if you use your car frequently for work or long-distance travel, you may pay more for insurance than someone who catches public transport to work and only drives on the weekends.
- Your excess: choosing a higher excess can lower your insurance premiums, but also means you’ll have to pay more out of pocket if you need to make a claim. Younger drivers may be required to pay a higher excess as part of their insurance policy in some cases.
- Any applicable discounts: some providers offer discounts for a range of reasons, such as signing up, not claiming for an extended period or bundling multiple insurance policies together.
Types of car insurance you can choose from
The most basic type of optional cover available, TPPD insurance can offer protection for damage caused by your vehicle to other people's property. However, no damage to your vehicle will be covered.
A step up from TPPD, TPFT insurance can also cover damage to your vehicle sustained due to a fire or theft (or attempted theft) in addition to third-party property damage if you're in an at-fault accident.
The most extensive (and expensive) form of cover, comprehensive car insurance can also offer cover for damage to your vehicle in an accident, collision and certain weather events on top of the areas TPFT covers.
Top tips for saving on your car insurance as an under-25
Increase your excess
Increasing your excess can help you save on car insurance as a young driver. However, it’s important to ensure that you can afford to pay the higher excess amount in the event of an accident, so try to avoid setting this at an unmanageable level.
Choose market value insurance
Choosing market value insurance instead of agreed value insurance can also help you save. This type of insurance covers your car for its current market value, meaning you’ll be paid what your insurer says it’s worth at the time of being written off or stolen.
Pay your premiums annually
Paying your premiums annually instead of monthly can often lead to lower overall costs. Many insurers offer discounts for annual payments, so it’s worth considering if you can afford to pay upfront. Don’t pay this if you aren’t comfortable with doing so, though.
Compare policies
Finally, comparing policies online can help you pick out the most suitable offer for your needs. With a range of insurers and policies to choose from, you can compare quotes based on cost, coverage, extras and more.
Common questions about car insurance for under-25s
Helpful guides on car insurance
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Disclaimer:
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Savvy’s comparison service includes selected products from a panel of trusted insurers and does not compare all products in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy. We always recommend readers to consult the Product Disclosure Statement (PDS) of different policies before purchasing your car insurance.