Car insurance for under 25s

Sick of being ripped off? Find cover for under 25s that won't break the bank.

It’s tough being young. If people aren’t busy demonising you for not having purchased half a dozen houses yet or spreading avocado on your toast, they’re taking all the good jobs and charging you more for things because of your age.

So insurance does cost more for those under 25. But there are some providers that might give you cheaper cover than others for being under 25. Here's what we found:

The 3 cheapest insurers for under 25s on our panel are:
1. Virgin Money
2. Bingle
3. Hume Bank
Based on our analysis of 38 car insurance companies for a male, born on 1/1/1994.

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Featuring Bingle Car Insurance

Low-cost car insurance aimed at safe drivers.

  • 41% of people pay $1.60 or less a day
  • Up to 24% off for safe drivers
  • Optional new-for-old car replacement
  • Hire car option if you can’t drive your vehicle
Promoted
Name Product New Car Replacement Pay monthly at no extra cost Choice of repairer Roadside Assistance Hire car after theft Personal effects
Optional - If your car is written off in the first 3 years
No
No
No
Optional - Up to $50 a day until your claim is settled
$0
Save 24% on your policy if you've been claim free for 3 years.
Yes - If your car is written off in the first 2 years
Yes
No
No
Yes - Up to $70 per day (Max 14 days)
$500
Transforms your driving so it's 100% carbon neutral.
Yes - If your car is written off or stolen in the first 2 years
No
Yes
Yes
Yes - Reasonable costs (Max 14 days)
$750
Emergency roadside assistance included in Comprehensive policies.
Yes - If your car is written off in the first 2 years
No
No
Optional
Yes - Up to $70 per day (Max 14 days)
$500
Save up to 10% when you buy online.
Yes - If your car is written off in the first 2 years or is under 40,000 km
No
Yes
Optional
Yes - Up to $1,000 (Max 14 days)
$250
Buy online and save 15%.
Yes - If your car is written off in the first 2 years or is under 40,000 km
No
Yes
Optional
Yes - Up to $1,000 (Max 14 days)
$500
Save 15% when purchasing online. Eligible customers can earn up to 20,000 Velocity Frequent Flyer Points when purchasing a new policy by 31 Oct 2018. Excludes NT. Min 6mths policy & T&CS apply.
Yes - If your car is written off in the first year or is under 20,000 km
No
No
Optional
Optional - Up to $60 per day (Max 14 days)
$500
Save up to 20% on car insurance when you purchase cover online.

Compare up to 4 providers

Young person driving car

How much does insurance for under 25s cost?

Provider
Monthly Cost
Bingle
$77
Get quote
Hume Bank
$80
Get quote
Budget Direct
$81
Get quote
Allianz
$103
Coles
$168

Is it fair that I pay more just because I'm under 25?

1 in 4 people who die on Aussie roads are under the age of 25. A 17-year-old driver on their P's is four times more likely to be involved in a fatal crash than a driver over 26 years.

But it's not all doom and gloom. While it makes sense then that insurers would charge under 25 year olds more, that doesn’t mean that you can’t save money. We analysed 38 companies and found that the difference between one policy and another can be as much as $2,000! That's why it's even more important as a young person to shop around and compare before you buy.

These were the cheapest insurers we found:

8 steps you can take to actually save on your car insurance

While it’s more expensive to insure an under 25 driver, there are ways you can reduce the cost of your premiums. These include:

  1. Be smart when choosing your car. The type of car you drive plays a major role in how much you’ll pay for insurance at any age. Smaller, cheaper and low performance vehicles are great for cutting the cost of insurance. Other factors may include whether the type of car is commonly stolen, if it’s made in Australia (do we even make cars anymore?), if it has good safety or fuel efficiency rating, and if it’s regularly involved in accidents.
  2. No claim, much gain. Be smart when deciding to make a claim. It might save you money in the short term, but it will wipe out any No Claims Bonus you may have and put a black mark on your claims record.
  3. Bundle where you can. If you’re insuring multiple vehicles or have an existing home insurance policy, check if the insurer offers multi-policy discounts.
  4. Going extra on your excess. Consider a higher excess is a tried and true way to lower your premiums.. However, you’re playing a dangerous game should you ever need to make a claim, so make sure the excess is more than you can afford.
  5. Secure and save. Parking in a garage and not on the street will help you save on your premiums. Other security systems such alarms, tracking devices and immobilisers can also help you save on car insurance.
  6. Take a safe driving or defensive driving course. Some insurers are willing to extend discounts to those who have completed them.
  7. Pay for what you use. If you don’t plan to drive a lot, look for a Pay As You Drive insurance policy.
  8. Shop online. Always try to buy your insurance online, as some insurers will give you a discount

Want to save more in the long run? Look for policies with low excesses

An excess is the amount you pay whenever you want to make a claim. Premiums are one thing, but if you have to fork out an extra $1,000 after you've had an accident, that can easily eat away at your bank account. Before you sign on the dotted line, have a careful look at what excesses you'd be paying if you want to claim.

We've put together a summary on how 4 major underwriters treat excesses for a driver under the age of 25, inexperienced drivers (like a fresh new P-Plater), or for an unlisted driver (like your best mate that accidentally scratched your car while on a Maccas run). If you're an inexperienced driver, you might need to pay multiple excesses - one for being inexperienced, and another for being under the age of 25. That's why it's so, so important to make sure you're getting a policy with fair excess rates.

Have a look at how some insurers treat excesses below:

Underwriter Driver under age 21 Driver aged 21-24 Inexperienced driver Unlisted driver

Auto & General

$600

$500

$500

$600

Insurance Australia Group

$800

$450

$400

No excess

Suncorp logo new

Suncorp

$400

$400

$400

$1,400

Hollard

$1,200

$800

$800

$1,600- $2,000

So what kind of cover can I get?

No matter how old you are, there are four different types of car insurance available.

Compulsory Third Party is mandatory for all Australian drivers. It covers injuries and death to other drivers.

If you need cover for yourself, you're might consider the following options.

Type Injuries or death to other people Damage to other people's property (like their car) Damage to your car as the result of theft or fire Damage to your car as the result of an accident
CTP
  • Yes
  • No
  • No
  • No
Third Party property
  • No
  • Yes
  • No
  • No
Third party property, fire and theft
  • No
  • Yes
  • Yes
  • No
Comprehensive
  • No
  • Yes
  • Yes
  • Yes

Pay attention to what’s covered by your policy

Looking through a product disclosure statement (PDS) is no one’s idea of fun but if you don’t, you might land yourself in hot water later on. Some of the higher level items you should be on the lookout for include:

  • Coverage. This refers to what is covered by your policy. For example, third party damage provides you with financial compensation if you have to pay for the repairs of someone else’s property, while a comprehensive policy will do this in addition to providing you with cover for your car.
  • Limits. A limit is the maximum coverage amount of your policy. For example, you might get car insurance that covers you for up to $5,000 worth of accidental damage. This means the insurance company will pay for up to $5,000 in repairs.
  • Exclusions. Pay close attention to exclusions as these are the situations where your insurance company won’t pay out. These will either apply to certain sections of the policy or to the policy as a whole. Some exclusions are obvious such as the insurer won’t pay out if at the time of an accident you’re under the influence of drugs or alcohol. Other are more sneaky such as no cover for drivers that are not listed on the Certificate of Insurance.
  • Excess. An excess is a fee you have to pay when making a claim. There are three types of excesses. A basic excess is the amount you say that you will pay to the insurer in the event of you lodging a claim. If you choose a higher excess, you’ll pay less for your monthly premiums and vice versa. An age excess is a fee you pay for young drivers under 25. A special excess is an amount specific to you based on your claims history, driving record and the type of car you drive.
  • Premiums. This is the main cost of your car insurance policy. The premium is the regular, ongoing amount you pay to have an active policy. It can usually be paid either monthly or yearly.
  • Fees. These are additional costs you must pay on top of your premium. Your policy may require you to pay administration fees, cancellation fees, support fees and, of course, excesses.
  • Discounts. There are many discounts available for most car insurance policies. Some of the most common include: pay-as-you-drive policies, multi-policy discounts, buying online and no claims bonuses.

What happens if you don't have a full licence yet?

There are generally no special conditions or restrictions on insurance for learner drivers or P-platers. Learner drivers are typically driving someone else’s vehicle and do not yet have their own insurance, but will increase the premiums when included on someone else’s policy.

Why not stay on your parents’ plan?

If you live at home and only drive your mum or dad’s car, one way to save a bit of money is to get added to your parents’ car insurance policy as a listed driver. This works out cheaper overall than if you were to purchase a separate policy. But there are a few potential downfalls you should be wary of when choosing this option:

  • Policyholder must own car. You can only add yourself to a parents' car insurance policy if that parent actually owns the car. In other words, if you own the car, you’re not allowed to buy cover in your mum or dad’s name just to enjoy cheaper premiums. That is called car insurance fronting and is technically fraud.
  • An additional excess may apply. Many insurers impose a young driver excess for claims that arise when the vehicle is being driven by someone under 25 years of age. This excess amount can be substantial, even as high as $2,500, so paying it could well and truly outweigh the cost of simply buying your own policy.

Do I really need comprehensive cover?

Comprehensive car insurance for under 25s can be pretty damn expensive, so you could be forgiven for wondering whether you actually need such a high level of cover. The good news is that, depending on your circumstances, you a lower-level policy may actually provide sufficient cover for your needs.

If you’re driving a second-hand car that’s relatively cheap, you may be better off settling for one of the following:

  • Third party property damage cover. This is the most basic level of optional car insurance available in Australia. It provides financial protection when you cause damage to other people’s vehicles or property.
  • Third party fire and theft cover. A mid-range policy option, this type of insurance includes third party property damage cover and also protects your vehicle against fire and theft.

Both of these options allow you to maintain a certain level of protection for your vehicle, but for a more affordable cost than comprehensive cover.

On the other hand, there are some situations where comprehensive cover is a wise investment. If your vehicle is relatively new or expensive, comprehensive insurance makes good sense because of the potential for you to suffer increased financial loss if something goes wrong. Comprehensive insurance is also often a condition of car finance details, so check the fine print to find out whether this level of cover is a must-have.

Car insurance terminology

Having trouble making sense of your car insurance policy? Let’s take a closer look at the meanings of a few key terms:

  • Cooling-off period. This is the period of time you have after purchasing a policy to cancel cover for no cost. Most general insurance products come with a minimum 14-day cooling-off period.
  • CTP. Stands for Compulsory Third Party. This type of insurance is mandatory if you want to register your vehicle in Australia. It covers you against compensation claims from people injured in an accident for which you were at fault.
  • Excess. This is the amount you must contribute towards the cost of a claim.
  • PDS. Stands for Product Disclosure Statement. This document contains essential information about a car insurance policy, including its benefits and risks. You should always read the PDS before buying a policy.
  • PED Guide. Stands for Premiums, Excesses, Discounts and Claims Guide. Some insurers include this information in a separate document to the PDS, providing full details of how much a car insurance policy costs and when and how benefits are paid.
  • Premium. This is the amount you pay to insure your vehicle.
  • Total loss. Your vehicle is declared a total loss when it has either been damaged beyond repair, or when the cost of repairing the damage exceeds the vehicle’s market value. This is also commonly referred to as a write-off.

Car insurance for under 25s: other questions you may have


*Disclaimer: The offers compared on this page are chosen from a range of products finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best', 'Top', 'Cheap' including variations, are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your personal financial circumstances when comparing products.


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2 Responses

  1. Default Gravatar
    AlessandraJuly 8, 2017

    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

    • finder Customer Care
      RenchJuly 9, 2017Staff

      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

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