A guide to provisional licences and car insurance for P-platers

A provisional licence (also known as ‘P plates’ or ‘Ps’) is the first driving permit you get that allows you to drive without the supervision of an experienced licensed driver. There are generally two stages of a provisional licence before Australian drivers can hold their open licence: P1 and P2.

P1 (the red P plates) is the first stage and has the most restrictions. After you’ve driven on your red plates for a certain period of time (e.g. a year) and passed a Hazard Perception Test (HPT), you can move on to a P2 licence (the green P plates). Depending on where you live, you may be able to bypass the P1 licence and apply for a P2 licence if you’re over a certain age (e.g. 25).

While P-platers can carry passengers, there may be restrictions on whom they can have in their car. For example, some states may only allow P-platers to have one passenger under 21 between certain hours unless the additional passengers are immediate family.

Generally, you’ll need to put two P plates on the outside of your car. One P plate should go on the front and the other on the back, and they should both be visible from at least 20 metres away.¹ It’s important to place your P plates correctly on your car since you could incur demerit points for not doing so.²

It will depend on the car hiring company. Some may allow P-plate drivers to hire cars, while others may require you to have an open licence. Contact the car hiring company to confirm any licensing requirements they might have.

Also, keep in mind that hiring a car overseas (perhaps if you’re travelling on your gap year) may come with even stricter conditions. While P-platers are able to obtain an international driver’s licence, many car rental companies in other countries may only allow drivers aged 21 and over to hire a car.

P1 drivers in Queensland have passenger restrictions; passengers can’t use the loudspeaker on their phones while the P-plater is driving. Queenslanders with a P1 licence also can’t have more than one passenger under 21 when they’re driving between 11pm and 5am, unless the passengers are family members.³

NSW P1 drivers generally can’t drive with more than one passenger under 21 between the hours of 11pm and 5am.⁴

P1 drivers in NSW also can’t drive faster than 90km/h,⁴ while P2 drivers have a speed limit of 100km/h.⁵

P1 drivers in Victoria have a ‘peer passenger’ restriction, meaning they can’t drive with more than one person in their car aged between 16 and 22. The partner of the driver (i.e. the spouse or domestic partner) and family members are typically exempt from this rule.

Exemptions may also apply if you:

• Have a fully licenced driver in the passenger seat
• Drive an emergency or police vehicle for work
• Have been granted one by VicRoads.⁶

Victorians with a P1 licence also can’t tow other vehicles or trailers unless there’s a licensed driver in the passenger seat or it’s specifically for work purposes.

P1 drivers under 25 can’t drive between the hours of midnight and 5am, and they can’t have more than one passenger aged 16 to 20 unless:

• The passengers are immediate family members
• A Qualified Supervising Driver is sitting next to the driver
• The driver has an exemption.⁷

South Australian P-platers on the P1 licence also can’t drive faster than 100km/h.

WA motorists on P1 plates can’t drive between midnight and 5am for the first six months of their provisional licence unless they have an exemption for driving to work or study.⁸

Tasmanians on a P1 licence have restrictions around ‘peer passengers’, which are people between the ages of 16 and 21.⁹ P1 drivers can only have one peer passenger at any time, but exemptions to this rule may apply if it’s:

• Someone you’re married to
• A partner who lives with you
• Immediate family.

P1 drivers in the ACT have ‘late-night peer passenger’ restrictions. This means P-platers are only allowed to have one passenger aged 16 to 22 years between the hours of 11pm and 5am. Additional passengers are generally allowed if they’re family members.¹⁰

Exemptions may apply if the driving between these hours is for employment or education.

Drivers in the Northern Territory will have to hold a provisional licence for two years if they’re under 25 or one year if they’re over 25. Territorians on their P plates also can only drive up to 100km/h.

There’s no single best type of car insurance product for P-platers, as the ‘best’ insurance for you will depend on factors unique to your situation, such as the level of cover you want.

At the very least, you should have Compulsory Third Party (CTP) insurance, or the equivalent cover in your state (e.g. Green Slip in NSW). CTP insurance is mandatory for all registered vehicles in Australia and is there to cover your legal liability for injuries and deaths in a car accident where you’re at fault.

However, CTP won’t cover vehicle or property damages you either cause or sustain. For these instances, you’ll need one of the following levels of cover:

• Comprehensive car insurance. Generally the highest level of cover, a comprehensive car insurance policy can cover damages caused to your car in accident regardless of who was at fault. It also covers damages to other cars and property in motor vehicle accidents where you’re deemed at fault.
• Third Party Fire and Theft (TPFT). Typically covers damages you cause to other vehicles in car accidents, as well as your own car in cases of fire and theft.
• Third Party Property Damage (TPPD). This type of third party insurance is the most basic form of cover. It usually provides financial cover when you damage someone else’s car in a motor vehicle accident.

Always read the Product Disclosure Statement (PDS) for more information on inclusions, exclusions, terms and conditions. The Target Market Determination (TMD) can also help you determine if the car insurance cover is suitable for you.

Like cover for other drivers, the cost of car insurance for P-platers will generally depend on the following factors:

• The type of car insurance and any optional extras you add
• Your age and driving record
• Car make and model
• Parking location
• How often and the distance you drive
• Any modifications made to your car.

Young drivers typically pay more for car insurance due to their age and inexperience, but there are still things you could do to get cheaper cover, including:

• Parking your car in a secure location. Parking in a garage instead of on the street generally lowers your risk of making a claim.
• Driving less often. Generally speaking, the less you’re on the road, the cheaper your car insurance premiums may be.
• Avoiding and suspensions. Keeping a clean driving record can go a long way to making your car insurance premiums
• Paying your premiums annually. Paying your premiums in instalments may attract additional fees that you could avoid by paying once a year.
• Paying more excess. Choosing to pay a higher excess in the event of an insurance claim could lower your premiums. However, it’s still important to select an affordable excess amount, as you may need to pay this amount if you need to make a claim.

You may be covered by your parents’ car insurance only when driving their motor vehicle; depending on your parents’ cover, this could be regardless of whether you’re listed as an additional driver on their policy or not.

However, while it might be cheaper for you to drive their car rather than having your own car insurance, remember that it might cost your parents more to have you on their policy. This is because they could be charged extra to have people under 25 drive their car, as young drivers are generally considered a higher insurance risk.

Another thing to consider is the additional excesses. If you need to make a claim on your parents’ car insurance policy for damage you caused to their car while driving it, you could incur the following excesses:

• Age excess. A lot of insurers will charge an additional excess if you’re under 25 and need to make a claim.
• Inexperienced driver. This applies when a driver hasn’t held their open licence for a certain amount of time.
• Unlisted driver excess. If you aren’t listed on your parents’ policy, an additional excess might need to be paid if you need to make a claim.

Read the PDS for more information on terms and conditions of your parents’ policy.

If you are the main driver of your car, it’s worth insuring it under your name. Listing a more experienced motorist as the main driver to get a cheaper policy is known as ‘fronting’. This could get you in trouble with your insurer and void your policy if you need to claim.