The increasing popularity of automatic cars is met with a significant drawback for younger drivers, as insurance premiums for those holding automatic-only licenses experience a sharp rise.
According to Compare the Market, the average insurance quote for a driver under 25 with an automatic-only license reached £2,803 in 2024, marking a 49% increase from £1,887 in 2023.
Reasons Behind Premium Hike
Insurers attribute the higher insurance costs for automatic car drivers to the increased expenses associated with fixing automatic gearboxes.
Additionally, insurers claim that these drivers tend to file more claims, further justifying the need for elevated premiums.
Concerns for Young Drivers
The escalating premiums pose concerns for the growing number of young drivers opting for automatic-only licenses.
Data from the DVLA indicates a substantial increase in individuals passing their driving test in automatic vehicles, possibly influenced by the rising popularity of electric cars and the diminishing production of new manual car models by some manufacturers.
Impact on Running Costs
Compare the Market reveals that car insurance now constitutes a significant portion of the total running costs for young drivers, making up 66% of the overall expenses.
The total annual running cost for a young driver in 2024 is estimated to be £3,043, a 25% increase from £2,436 in 2023. This figure encompasses insurance, fuel, vehicle excise duty, and an MOT.
Worries About Future Costs
The substantial increase in running costs raises concerns among young drivers, with nearly four in five expressing worry about the escalating expense of car insurance policies.
The financial burden is particularly pronounced for those who have recently acquired an automatic-only license.
Tips for Young Drivers to Save on Insurance
The article provides practical tips for young drivers to alleviate the financial strain of insurance premiums, including shopping around for the best deal, considering telematics policies, paying annually instead of monthly, adjusting voluntary excess, securing the car with approved safety devices, reducing annual mileage, and carefully selecting the car model.
Impact of Car Model and Modifications
The choice of the car model significantly influences insurance premiums for young drivers.
Factors such as engine size, security features, and repair costs contribute to the overall insurance costs.
Customized modifications, such as spoilers or wheel rims, can also increase premiums.
Age of the Car and Insurance Costs
The age of the car is a crucial factor affecting insurance costs.
While older cars may be cheaper to replace, they often lack modern safety features, making them a higher risk.
Striking a balance between cost and safety is essential for young drivers navigating the complexities of insurance premiums.