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Car insurance for young drivers and under 25s
Written by
Kervin Mathew
Edited by
Ellie Garran
Reviewed by
Adrian BennettWe compare many well-known car insurers
iSelect does not compare all providers in the market or all policies offered by our partners in your area. Not all policies or special offers are available to all customers. Learn more.
Choosing car insurance as a young driver
Younger drivers tend to pay more for car insurance, so when you’re choosing insurance, it’s worth considering ways to lower premiums, such as comparing policies, opting for a higher excess and choosing a low-risk car or a policy that costs less if you drive less. Like other drivers, young drivers can choose between three levels of car insurance cover: comprehensive, third-party property, fire and theft and third-party property.
How is car insurance different for young people?
Car insurance usually costs more for younger drivers via a higher premium and in some cases additional age-based driver excesses could apply. This is because, unfortunately, younger drivers as a group are statistically more likely to have serious car accidents than older, more experienced drivers. That means, based on age alone, young drivers can be a higher risk to insure.
Types of car insurance available for young drivers and under 25s
Car insurance options for younger drivers under 25 include the higher-coverage comprehensive cover and the cheaper but more basic third-party property, fire and theft and third-party property cover. These types of car insurance offer cover for accidental damage to cars and other people’s property.
Third-party property
Third-party property is the most basic level of car insurance you can get. A third-party property policy can help cover other people’s cars and property if you cause an accident that damages them. It could also include a limited amount of cover if your car is damaged by an uninsured driver.
Third-party property, fire and theft
Third-party property, fire and theft policies offer cover for the same things as third-party property insurance, with additional protection for fire damage or if someone steals your car. It also includes limited cover for damage to your car caused by an uninsured third party.
Comprehensive
Comprehensive car insurance provides the highest level of cover and is generally the most expensive. It can help cover the costs of most repairs if your or another person’s car is damaged in an accident. It could also pay you out if your car is written off or stolen, to help cover the replacement costs.
To get a complete picture of what a car insurance policy can cover, read the policy documents and keep an eye out for policy benefits, optional extras, general exclusions and conditions of cover.
Though it may be mistaken for a type of car cover, compulsory third-party (CTP) insurance is a bit different because it’s designed to cover drivers’ legal liability for injuries they cause in an accident – in other words, it covers people, not property. iSelect doesn’t compare CTP insurance, but we can help you narrow down your search for other cover options, including comprehensive car insurance.
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Insurance should be high on your shopping list when you’re shopping for your first car. Sportier cars may be tempting but they can be very expensive for novice drivers to insure. By researching how much you’ll be up for, you’ll minimise the surprises when you buy insurance.
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How much is car insurance for younger drivers?
Average annual comprehensive car insurance premiums for drivers under 25 range from $1,532 to $2,178, based on quotes for customers who purchased comprehensive car insurance through iSelect. Male drivers under 25 paid an average annual comprehensive premium of between $1,753 and $2,318, while female drivers in the same age group paid between $1,539 and $2,034.1Refer to tables ‘Average comprehensive premiums for drivers under 25’, ‘Average comprehensive premiums for female drivers under 25’ and ‘Average comprehensive premiums for male drivers under 25’
| State or territory | Average comprehensive premium |
|---|---|
| ACT | $1,638 |
| NSW | $1,943 |
| QLD | $1,753 |
| SA | $1,532 |
| TAS | $1,413 |
| VIC | $2,178 |
| WA | $1,649 |
Note: These figures represent the average annual indicative quotes to insure a car in each specified state and territory for customers aged 25 years and under who purchased comprehensive car insurance through iSelect during the period from 1 June 2025 to 31 May 2026. Quote data includes indicative stamp duty and GST where applicable. Premiums have been rounded to the nearest dollar.
| State or territory | Average comprehensive premium |
|---|---|
| NSW | $1,863 |
| QLD | $1,612 |
| SA | $1,574 |
| VIC | $2,034 |
| WA | $1,539 |
Note: These figures represent the average annual indicative quote insure a car in each specified state and territory for female customers aged 25 years and under who purchased comprehensive car insurance through iSelect during the period from 1 June 2025 to 31 May 2026. Quote data includes indicative stamp duty and GST where applicable. Premiums have been rounded to the nearest dollar.
| State or territory | Average comprehensive premium |
|---|---|
| NSW | $2,026 |
| QLD | $1,890 |
| SA | $1,482 |
| VIC | $2,318 |
| WA | $1,753 |
Note: These figures represent the average annual indicative quote to insure a car in each specified state and territory for customers aged 25 years and under who purchased comprehensive car insurance through iSelect during the period from 1 June 2025 to 31 May 2026. Quote data includes indicative stamp duty and GST where applicable. Premiums have been rounded to the nearest dollar.
What affects the cost of car insurance for young drivers and under 25s?
Drivers under 25 tend to pay higher car insurance premiums because their age and relative inexperience puts them in a higher risk category with insurers. Other factors, such as the type of car, how it’s used and where it’s usually parked, as well as the driver’s experience, driving record and claims history, can also play a significant part.
Generally, insurance companies consider multiple factors to calculate car insurance premiums. These can include:
- your driving experience
- the type of car (e.g. a modified hot rod or a very powerful car will generally attract a higher premium)
- how you use your car (e.g. if it’s for business use, your premium is usually higher)
- where you live (some areas have a higher crime rate or rate of extreme weather events)
- your driving record (e.g. if you have any driving offences)
- your history of claims
- how securely your car is parked overnight.
Do young drivers pay more for car insurance?
Generally, young drivers (particularly drivers under 25) are likely to pay more for car insurance than older, more experienced drivers. This is because young drivers are statistically more likely to be involved in an accident, posing more of a potential risk to the insurer. For example, in Victoria, drivers in their first year behind the wheel are nearly four times more likely to find themselves in a fatal accident or one that causes serious injury. These are sobering facts, but these statistics help explain why younger drivers generally pay more for their car insurance.
According to Victoria’s Transport Accident Commission, younger drivers are at greater risk due to:
- night driving
- lack of driving skill in unsafe weather
- use of alcohol and drugs
- speeding
- driving older and/or less safe cars
- distractions, such as mobile phone usage
- long drives.
If you’re a young driver, driving safely not only protects you and others from harm, but could also reduce your car insurance premiums down the track. That’s because by not making a car insurance claim, you get bragging rights to a clean claims history, which in turn can be a green flag to insurers!
How to reduce the cost of car insurance for young drivers and under 25s
Drivers under 25 can help reduce car insurance costs by choosing a higher excess, driving a lower-risk car, driving safely and keeping a clean claims history. If you don’t drive a lot, a pay as you drive or low-kilometre policy may offer a lower premium, and paying premiums annually instead of in instalments can also help. Some insurers may even lower premiums if an experienced driver is listed on a young driver’s policy. Shopping around and comparing a range of quotes online can also help young drivers find cheaper car insurance – and iSelect can help with that!
Increase your excess
If you opt for a higher excess, some insurers will lower your premium. But this also means you’ll have to pay more if you claim for an at-fault accident. Just make sure you choose an amount you are comfortable paying if you need to claim.
Pay your premium annually
Paying your premium annually in one lump sum can cost less overall, as some insurers may charge additional processing fees for monthly premium instalments.
Shop around online and compare
You can often find a better deal by doing some research before you buy your car insurance. In the same vein, comparing a range of policies through a site like iSelect is a great way to try to find lower premiums.
Drive a low-risk car
Consider the market value, repairability and safety rating of a car before you buy one, because a car with a lower market value and repair costs and a better safety record on Australian roads may be cheaper to insure.
Look for a pay as you drive policy
Some insurers offer pay as you drive or low-kilometre cover where you pay a lower premium if you drive within a certain number of kilometres a year.
Add an experienced driver to your policy
Listing a parent or trusted older driver on your policy could tell insurers that you’re driving under the guidance of an experienced driver, potentially leading to lower insurance premiums.
Remember, it’s important that you’re completely honest with your insurer about your details, your car, who will drive it, and what you use it for. Failing to tell your insurer important information or giving them misleading information could lead to denied claims or a cancelled policy or could even void your car insurance.
Will my car insurance premiums go down after I turn 25?
Generally, yes, your car insurance costs tend to decrease gradually after the age of 25. That’s because road statistics show that older drivers are less likely to have an accident and therefore less likely to make an insurance claim.
Bear in mind that age isn’t the only factor that affects price. Insurance providers also look at a range of other factors including the kind of car you drive and your history of claims. If you’re a safe driver and claim-free, this will usually result in a lower premium, too.
Frequently asked questions
Should I buy my own car insurance policy or get added to my parents’ policy?
If you have your own car, buying your own car insurance policy is a must, even if you still live with your parents. If you drive your parents’ car and you live in the same house, you must be added as an additional driver on their car insurance policy. As a general rule, if you drive a car more than anyone else, you’ll need to be listed as a regular driver on the insurance policy for that car.
Which car is cheapest to insure for young drivers and under 25s?
The cheapest car for a young driver or someone under 25 to insure is likely a make and model that costs less to repair or replace, that’s less targeted for car theft and that has a better track record of safety than others. Compact or lower-priced model cars are often the cheapest cars to insure in Australia and are worth considering for an inexperienced driver looking for lower car insurance premiums.
A key decider could be the car’s market value, which is how much it would sell for on the open market. A car with a lower market value might draw lower insurance premiums. This is because it would likely cost less to repair or replace the vehicle if it went crook or was stolen. In the same vein, a lower-value car might not require a comprehensive cover, just as a stock 2005 Corolla might not need 98 octane petrol. In cases like these, you might prefer cut your costs by going for a cheaper form of car insurance that covers only third-party property damage.
You could also consider some of the other factors that impact premiums, such as:
- Size: A bigger vehicle, though more spacious, might have you making more room in the budget for your insurance.
- Type of fuel: LPG and diesel-powered cars tend to be the cheapest to insure. On the other hand, insurers can charge higher premiums for EVs.
- Colour: White and yellow cars are easier seen on the road. Black, grey or even green cars can be a red flag to insurers and costlier to insure.
What additional excesses apply to young drivers?
Young drivers may be subject to an age-based excess (for example, $600) if they make an at-fault claim. This additional excess often applies to drivers under the age of 25, regardless of whether they’re listed on the insurance policy as a household member. In fact, some policies specify an additional unlisted driver excess that might also be applied to a claim.
So, on top of the basic excess, age-based excesses and other additional excesses exist mainly to protect insurers against the higher risk that comes with insuring younger drivers.
Can I get insurance for a modified car?
Yes, you can likely insure a modified car if you inform your insurer of the changes to your vehicle. Before you buy a modified car, you may also want to check whether an insurer will cover it. Minor modifications to the car such as roof racks and tow bars may be considered non-standard accessories. These need to be listed, but will often still be covered by insurers.
If you’re a petrol head and you’ve fitted out your car with legal yet complex modifications such as a modified exhaust or lift kits, they may not be covered. It’s a good idea to check your Product Disclosure Statement or with your insurance provider to see if certain modifications can be covered under your current policy. Illegal or unsafe modifications may affect your cover and could result in a claim being reduced or declined, depending on the insurer and circumstances.
Can I get insurance for a high-powered car?
Generally, if you’re under 25, on your P-plates or both, there may be restrictions on your ability to drive a high-powered car, and an insurer isn’t likely to insure a car you’re not legally allowed to drive. So, be sure to ask your insurer whether they’re able to insure your high-powered car.
To give you an idea, here’s what determines whether a car is considered the ‘high-powered’ in Queensland:
- whether the car was manufactured before a certain date
- whether the engine is turbocharged or supercharged
- whether the engine has been modified to increase the vehicle’s performance
- the number of cylinders in the engine (typically 8 or more means the car is high-powered)
- the power-to-weight ratio of more than 130 kilowatts per tonne.
If I’m a learner driver, do I need car insurance?
Yes, as a learner driver, it’s important to be covered by car insurance, but it doesn’t need to be your own policy unless you have your own car. If you’re learning to drive in a parent’s car, you could be covered by their policy – if so, it will need to include cover for learner drivers, and you may need to be listed as a driver. If you own a car and drive it more than anyone else, you’ll need your own policy.
Car insurance aside, all drivers need to be covered by compulsory third-party insurance (or Green Slip insurance in New South Wales) as a minimum.
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