Student car insurance

Car insurance for students is likely to cost you a little more if you’re under 25 and inexperienced. Compare policies and features to save.

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Car insurance can be costly on a student's budget. But that doesn't need to be the case. While there's no specific type of student car insurance available, there are ways to keep things affordable, from the car you drive to specialist telematics policies.

Does being a student affect my car insurance?

You don't necessarily pay more because you're a student – it's more because of how old you are. Students are likely to pay more than others for their car insurance often because they are younger. If you are under 25, you are considered a young driver by insurers.

However, age isn't the only factor in calculating your premiums. Factors such as driving experience, where you keep your car and the type of car you own will also impact the price of your student car insurance.

If none of this applies to you, you might be able to get cheap student car insurance. Otherwise, it's likely to cost you a little more.

Do insurance companies ask if you're a student?

Yes. Insurance companies require that you list your occupation, so you'll have to let the insurer know that you are a student.

It might be tempting to change your occupation or address on your application in the hope of receiving lower premiums, but honesty is the best policy. Not only is it considered fraud to lie, but your claim will probably be denied if you don't tell the truth.

If you live and keep your car in an area with low crime, are over 25 and have some driving experience, you might not need to worry about paying more for your student car insurance. For example, a quote for a 30-year-old male with Budget Direct's Comprehensive Car Insurance policy was $78.50 a month. By comparison, a 21-year-old male, driving the same car, received a quote of $110.13* a month.

*Based on a quote for a 30-year-old male with 5 years No Claims Discount and a 21-year-old male, driving a 2015 Mazda 2, with a comprehensive Budget Direct policy.

Are there any specific policies dedicated to students?

Insurers calculate premiums based on assumptions. Unfortunately, that means young drivers are likely to face higher premiums because they're statistically more likely to be in an accident.

To avoid a higher premium, telematics policies are a good place to start. While there are no specific policies dedicated to student car insurance, insurers like Ubicar tailor their policies to your driving as opposed to assumptions based on your age.

With telematics insurance products, your provider will install a device in your car and usually an app on your phone. The device monitors your driving habits, from how fast you drive to how well you take turns. The safer you drive, the more you are rewarded, often with lower monthly premiums.

Does being on my Ls or Ps affect the cost of insurance?

Yes. L-plate and P-plate drivers fall into a high-risk group, which means you'll typically pay more for your car insurance. However, some car insurers don't require learner drivers to be listed on an existing car insurance policy (for example, a parent's) at all, so you might not have to pay higher premiums whilst you learn. You should always check with your insurer beforehand to see if this is the case.

If you are a P-plater, you can sometimes remain under your parent's car insurance policy as long as you are under the age of 25.

Keep in mind though that if you have comprehensive car insurance, you may have to pay an additional excess for claims if you have an accident while driving. These can include:

  • Learner driver excess. An excess may be charged for claims where your car is being driven by a learner.
  • Young driver excess. An excess that is charged for claims involving a driver who is under 25.
  • Inexperienced driver excess. An excess may be charged for a driver if they haven't held their licence for a specific period of time.
  • Undeclared driver excess. Some insurers charge an additional excess if you decide not to list a learner driver under your policy.

If you are over 25, you're likely to pay a little less. However, if you have to list them on your policy, anyone with Ls or Ps is classed as an inexperienced driver, meaning they will pay more than average for their car insurance. For instance, if you add someone under the age of 18 to a 30-year-old's Budget Direct's Comprehensive Car Insurance policy, the price goes from $82.26 to $154.91* a month.

*Based on a quote for a 30-year-old male with 5 years NCD and a 17-year-old male, driving a 2015 Mazda 2, with a comprehensive Budget Direct policy.

Which car insurance is best for students?

Finding the best price for car insurance for students depends on a number of factors, including:

  • The car you are driving. It will cost you more to insure a high-performance car, as they're much faster, so are considered riskier to drive. They're also more likely to get stolen, which puts the premiums up. It's the same story with modified cars that have expensive features and enhanced performance.
  • The cost of your car. If you're a student, you're most likely on a budget. That means you want something affordable and cheap to run. Generally speaking, older cars are cheaper to buy, insure and repair if something goes wrong. However, they can sometimes prove troublesome so it's all about finding the right one.
  • The level of cover you want. Comprehensive car insurance is the safest option, covering both your car and anything you might accidentally crash into. It's also the only type of car insurance policy that properly covers you if your car is damaged in an accident. For those on a budget, third party property damage (TPPD) car insurance covers damage you cause to someone else's vehicle or property.
  • Shopping around. Good student car insurance rates are much harder to come by so it's definitely worth shopping around. Don't settle for the first or easiest option. As already suggested, black box car insurance (telematics) is a good alternative for young, safe drivers.

Compare comprehensive car insurance

Name Product Roadside Assistance Accidental Damage Storm Choice of Repairer Agreed or Market Value
Budget Direct Comprehensive
Agreed or Market
Finder's summary: Awarded the 2021 Finder Award for Car Insurance - Value in QLD, SA, TAS, VIC, WA and Car Insurance - Features in NSW, VIC, WA, this policy offers solid coverage at a low cost. Budget Direct's claims service has received a 4.2/5 based on nearly 5,000 customer reviews.

⭐ Current offer: Get 15% discount on first year's premium when you take out a policy online. T&Cs apply.

Who it might be good for: People who want a comprehensive policy without breaking the bank.
Virgin Comprehensive
Agreed or Market
Finder's summary: Finalists for the 2021 Finder Awards for Best Car Insurance - Value in VIC, QLD, SA, WA and TAS, Virgin Comprehensive provides a good level of cover for a decent price.

⭐ Current offer: Get 15% off on your first year’s premium when you purchase a new eligible comprehensive car insurance online. T&Cs apply.

Who it might be good for: People who'd like to manage their policy online 24/7.
Qantas Comprehensive
Agreed or Market
Finder's summary: You'll be able to choose how comprehensive you want your cover to be with optional extras like choice of repairer and the option of agreed or market value.

⭐ Current offer: Earn Qantas Points for joining and paying your premium. Sign up today and earn up to 20,000 Qantas Points (points awarded will be based on your premium). T&Cs and eligibility apply.

Who it might be good for: People who'd like to earn Qantas Points.
Bingle Comprehensive
Finder's summary:Bingle consistently comes up as one of the cheaper insurers out there. It only covers the basics. You don't get to choose your own repairer, you're not covered for personal items in the car and unless you add it as an option, you won't get a hire car if your car is stolen. But this keeps its premiums low.

Who it might be good for: Someone who wants a low-cost option that covers them for the basics.
QBE Comprehensive
Green Company
QBE Comprehensive
Agreed or Market
Finder's summary: QBE is a sustainable insurance company and also Finder's Green Insurer of the Year 2021 award winner. This policy offers the highest level of protection available from QBE including three-year new car replacement.

⭐ Current offer: Save $75 when you purchase a new comprehensive policy online. T&Cs apply.

Who it might be good for: Those that are looking for a more environmentally friendly insurance choice.
ahm Comprehensive
Finder’s summary: ahm comprehensive car insurance lets you choose higher excess to reduce your premiums. Its Fixed Kilometre Plan can save you up to 30% compared to its standard comprehensive cover.

⭐ Current offer: Get up to 15% off when you purchase a new car insurance policy. T&Cs apply.

Who it might be good for: People who drive less than 15,000 km per year.
Australia Post Comprehensive
Agreed or Market
Finder's summary: Australia Post car insurance offers comprehensive cover for things like theft, fire, new for old replacement and emergency accommodation and transport. Cover also extends to anyone who uses your car, not just you.

⭐ Current offer: Get $75 off your first year’s premium when you buy online. T&Cs apply.

Who it might be good for: If multiple people use the one car and you don’t want to worry about listing all drivers.
Huddle Black Comprehensive
Agreed or Market
Finder's summary: Huddle's black comprehensive is its cover with highest limits and exclusive benefits. It includes roadside assistance. You can also get up to $2,000 for emergency travel and accommodation and up to $30 million legal liability cover.

Who it might be good for: Someone who wants a 24/7 claims processing.
Youi Comprehensive
Agreed or Market
Finder's summary: Youi Comprehensive Car Insurance is one of the few providers to include roadside assistance in its policy. You'll also get access to YouiRewards which gives you discounts on furniture, parking and more. Youi also has a live chat feature on its site to talk through any questions.

Who it might be good for: People over 25 who want comprehensive cover with a focus on customer service.

Compare up to 4 providers

Picture: GettyImages

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