Car Cover Takes 18% of Young’s Wages

According to figures from Confused.com and Towers Watson, young motorists are using more than 18% of their salaries to pay for car insurance. Young drivers are said to be paying an average £2,499 for annual comprehensive car cover, while older motorists between the ages of 66 and 70 are paying an average of £440 – as they are statistically cheaper to insure.

The average annual comprehensive policy premium was compared with income figures from the Office of National Statistics (ONS), which show that workers between the ages of 18 and 21 earn an average £13,972. Using these figures, it’s been determined that young drivers can spend an average 18% of their salaries on car insurance. However, this percentage grows to 26% for men in this age group, as they pay an average £3,635 for car cover. Women in the same age group pay an average £1,869 for cover, which is just 13% of the salary. The study also found that drivers between the ages of 36 and 40 pay an average insurance premium of £597, but this rises significantly just two tiers down – motorists between the ages of 46 and 50 – to £733.

On the other end, the research has discovered that the eldest drivers are charged the lowest premiums. Motorists aged 71 and up are only spending £436 a year for car cover, which breaks down to less than £1.20 per day. This is because of a combination of driving experience, owning lower-powered vehicles and the likelihood of shorter journeys – which all make older and retired motorists a lower risk statistically. This is even despite the possibility that their reaction time is much slower due to their age.

Confused.com head of car insurance Gareth Kloet says that every group is billed based on their statistical risk – which includes the value of the vehicle they drive, their experience levels, past driving history and where they live. Younger motorists are hit much harder than more experienced drivers, but Confused.com is working to find ways to help young motorists bring their costs down – like volunteering to have a telematics device installed in their car to monitor their driving, which can prove to insurance providers that they are safe on the road and deserve a discount, he added.

According to more than 300 million miles of data from insurethebox.com, a telematics specialist, using the blackbox technology can reduce the accident risk for a young motorist by up to 40%. Confused.com is also suggesting that young motorists choose a low-powered, smaller vehicle for their first car. Drivers can also shop around to get the best premium, using comparison websites; as well as consider excess protection. Here is a list of the average car insurance premiums by age group, as compiled in the Confused.com/Towers Watson Car Insurance Price Index for the first quarter of the year:

• Aged 17-20 – £2,499
• Aged 21-25 – £1,411
• Aged 26-30 – £915
• Aged 31-35 – £679
• Aged 36-40 – 597
• Aged 41-45 – £674
• Aged 46-50 – £733
• Aged 51-55 – £680
• Aged 56-60 – £533
• Aged 61-65 – £446
• Aged 66-70 – £440
• Aged 71+ – £436

Despite the cost of car insurance being so high for young drivers, this isn’t the only vehicle operating cost sucking up their earnings. The price of petrol is also running them off the road, as it’s still 61% (or 50p per litre) higher than in 2006, according to Confused.com and the AA. However, petrol prices are also hitting the rest of the motoring population, with Post Office Insurance reporting that nearly 75% are worried about the effects of rising fuel costs. Glass.co.uk also says that 37% of drivers spend more on their car fuel bill than their utility bills, while 70% say they pay more for car fuel than for a holiday.