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Car insurance for young drivers, specifically those under 25 years old, is so expensive because insurers see these drivers as risky and will therefore inflate the premium to cover this risk. If you're a young driver with a perfect driving record, you'll likely still find that insurance is expensive. If you're a young driver with a a bad driving history then you might find it difficult to get cover at all.
It's not all bad news though. There are ways that younger drivers can save on their car insurance premium. See below.
Many car insurers offer sign up discounts that can translate to $100 or more in savings. Instead of auto-renewing your exisiting policy, it can be so worth shopping around and seeing what other providers can offer you. Keep in mind, a percentage discount will often be more valuable than just a cash amount discount. Take time to run the numbers.
Some insurers will be happy to negotiate on price over the phone, all you've got to do is call and tell them you're thinking of switching providers. Do some research prior so you can prove that similar products are available at a cheaper rate, if asked. This is a tried & tested tip by Finder's insurance team.
Choosing a higher excess will lower the cost of your premium. Just be aware that this is the amount you'll have to pay if you ever need to make a claim, so be sure you can afford it.
Younger people are often managing budgets for the first time, and car insurance might not make the cut – but I'd argue that car insurance is essential. It's much cheaper to pay for insurance than it is to fork out thousands for a new car after an accident. Shop around to compare and search for discounts to get the best possible value.
Sarah Megginson
Managing editor at Finder
If you aren't a heavy car user, one alternative to regular car insurance is pay-as-you-drive cover. Look for providers such as KOBA and ROLLiN'. Finder research found ROLLiN', which offers a monthly subscription style of cover, had some of the cheapest quotes out of 32 providers. Whichever policy you go for, keep in mind a cheaper policy today may be more expensive at your next renewal date. So, always take some time to compare deals and keep an eye out for discounts like sign-up offers.
James Martin
Editor of insurance at Finder
Lots of car insurers will lower your premiums if you take a safe driving course. They're available in every state and can take less than a day to complete. You'll have to pay for most courses but it can lead to savings in the long run. For instance, the NSW safe drivers course is $140.
Gary Ross Hunter
Insurance and innovations editor
Insurance for under-25s is specialist and expensive. That means it's both vital you get the best policy in the first place and you don't keep it long. As a young car owner, there could be cheaper deals available to you with each and every year of age and driving experience.
Nicole Pedersen-McKinnon
Freelance finance journalist
The best car insurance for a young driver is one that suits your circumstances and offers you the most value. That means the policy that's right for one person will be different from the one that's right for someone else.
Here's how to find the best policy based on your situation:
| Car | Which insurance? |
|---|---|
| You bought a new car or you drive an expensive one | Comprehensive insurance is likely the best level of insurance for you since it will cost you dearly if your car is totalled. It covers your car in a wide variety of situations including accidents you cause, natural disasters and uninsured drivers. Plus, if you bought your car with finance, your lender will probably require that you have comprehensive cover. |
| You have an expensive car and you drive long distances | The best policy for you would probably be a comprehensive policy, with all the options. Besides giving you the full protection of a comprehensive policy, it can also include some extra selling points such as a hire car after a bingle (if you cause the accident), sending a tow truck to you if you break down and replacing your windscreen without requiring you to pay an excess. Always check the PDS (the terms and conditions) for an insurance policy so you know exactly what's included in each one. |
| Your car isn't super expensive but you live in a high-risk area | Third party fire and theft is the best policy for someone who lives in a high-crime area or somewhere that's prone to bushfires – but doesn't need the full cover of a comprehensive policy. It'll cost you less than comprehensive insurance, but it still protects your car against fire and theft. Again, check the PDS of the insurance policy you're considering to make sure exactly what's covered and what's excluded. |
| You drive a banger | Third party property damage is probably the best cover for you if your car isn't worth much and you can afford to replace it. Third party property damage doesn't protect your car, but it does protect you if you damage other people's stuff – like their cars or property. |
| You live with your parents | If you don't mind driving your parents' car (and you drive it less than they do), the best option for you is to stay on your parents' policy so you can save some money. Make sure you don't end up committing insurance fraud though by having your parents do something called "fronting". |
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My son is 17. Can I insure a Subaru Forester 2007 XT turbo with him as the second driver? If so, who will insure him? Thanks
Hi,
Thanks for reaching out to us. Please note that we are not affiliated with any company we feature on our site and so we can only offer you general advice.
You’re actually already on the correct page on where you can get helpful information and where you can compare your options for your son. You may click on the name of your preferred insurance on the list to see more details then you may click on the green ‘Get Quote’ button to get in contact with them and inquire. You should be able to inquire with them on what will be the requirements.
Best regards,
Rench