Young drivers hit with £2,500 annual running costs

Young drivers hit with £2,500 annual running costs
Young drivers hit with £2,500 annual running costs

Young drivers are facing soaring running costs for their cars, with the average annual bill hitting nearly £2,500.

In the last six months, the average cost has jumped £60 as fuel prices have climbed and young motorists continue to suffer with sky-high insurance premiums.

Research examining the key costs on top of a car’s purchase price found that the average 17 to 24-year-old now spends £2,442 per year.

Read more: Students face £1,000 fine for simple licence mistake

The largest part of that bill is insurance. In the last two years premiums have risen by 5.4 per cent, leaving the average young driver paying £1,324 per year.

Premiums have fallen slightly in the last six months but 17-24-year-olds still pay significantly more than the £752 national average.

After insurance, the biggest expense is fuel, with the bill reaching £891 a year. That’s an £80 increase since last year and has come about as fuel prices continue to creep up. They have now risen for 11 consecutive weeks, reaching 131p per litre and 135p for petrol and diesel respectively.

Annual cost of running a car for 17 – 24-year olds

Expense Cost % of total cost
Insurance £1,324 54.24%
Fuel £891 36.50%
Est. VED (Road Tax) £115 4.71%
MOT £54 2.25%
Breakdown cover £56 2.31%
Total cost per year:  £2,442

Data: Compare the Market, Feb-Aug 2018

Dan Hutson, head of motor insurance at Compare the Market, said: “Driving costs for young people are becoming worryingly high. Each quarter, our Young Drivers Report shows an increase in the cost of getting on the road for 17 to 24-year-olds. The price of insurance for young drivers remains awfully high and now the price of fuel is also expected to rocket. Fuel costs have always been volatile but the significant rise in price over the past six months will have a large impact on the affordability of driving, especially for young people.

“The unaffordability of keeping a car has significant ramifications on young people’s ability to travel to work and hold down jobs, especially when a large proportion of their salary may be spent on travel alone.

Young, newly qualified drivers are hit by heavy insurance costs

“Not all parts of the country benefit from public transport and for those that rely on a car, these figures will be concerning. As a result, Compare the Market is calling on the Government to abolish Insurance Premium Tax for young people.”

Insurance Premium Tax (IPT) has risen three times in the last three years, doubling to 12 per cent. As they already pay the highest premiums young drivers also pay a disproportionate amount of tax on their insurance.

The news comes on the heels of a report that found British parents were spending a collective £2 billion a year helping their children keep mobile.

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