The personalised number plate industry has increased by 58% since 2018
The cost of running a car for a young driver has increased by an average of £163 in the past six months, primarily driven by higher fuel and insurance costs, according to comparethemarket.com’s latest Young Drivers research. On average, a 17 to 24 year old driver will now pay £2,229 per year to run a car for 12 months – this is the highest figure since 2020.
The cost of driving had fallen during the pandemic, but recent rises in insurance premiums and fuel have eliminated these savings, according to the research, which analyses the cost of insurance, fuel, road tax, and breakdown cover. There are now concerns that driving is becoming increasingly unaffordable for many young people.
The substantial increase in running costs in the past six months has been mainly due to rising petrol prices and increasing insurance premiums. The typical annual fuel cost for a young driver has increased by £73 in six months, rising from £745 to £818. During this time, the average cost of a litre of premium unleaded petrol has risen from £1.32 in July 2021 to £1.44 in January 2022.
The research also shows car insurance is responsible for more than half of overall running costs (52%) for young drivers. Young people typically pay the most for car insurance as the average annual car insurance premium for a young driver now stands at £1,154. This represents a significant £92 (9%) jump from the first half of 2021.
The increasing costs of driving will add to the wider financial strain felt by many young people as the cost-of-living crisis continues. The latest Household Financial Confidence Tracker from comparethemarket.com shows a hike in the energy price cap of £693, due in April 2022, is set to push more than one in four (28%) young people into debt.
However, young drivers can significantly reduce their car running costs by shopping around for a cheaper deal on their car insurance. The cheapest annual premium typically available costs £925. This means young drivers can save an average of £229 if they switch to the cheapest premium when their policy ends.
New motorists can calculate how much driving is likely to cost using comparethemarket.com’s Young Drivers Tool. The online tool also offers suggestions on the most effective ways for drivers to cut the cost of car insurance.