Car insurance for young drivers

Average customer rating: 4.3/5
Written by Kenneth Young
Reviewed by Adrian Taylor
Updated March 15, 2024

Expert tips for saving money on car insurance for young drivers

Our resident car insurance expert, Adrian Taylor, has helpful tips for young drivers looking to save on car insurance.

Adrian Taylor
Executive General Manager – General Insurance

Consider opting for a higher excess in exchange for lower premiums.

Your insurer might offer you this option or the same in reverse (i.e. higher premiums for a lower excess). Just keep in mind that should you need to claim for an at-fault or unrecoverable incident, you’ll have to pay this amount.

Look for low-kilometre discounts.

If you don’t drive all that often, some insurers might offer you discounted premiums or specific insurance products (such as Pay As You Drive) in recognition of this.

Take good care of your car.

Keeping your car in good condition and working order will not only keep you safe on the roads but may also lead to fewer issues if you have to claim.

Why take out car insurance for young drivers?

As young drivers are statistically more likely to be involved in an accident than older drivers,1 being covered for the following can be a wise idea:

  • Damage to other cars and other people’s property
  • Damage to your vehicle caused by another person
  • Damage caused by fire, weather or other insured events

Car insurance for 25-year-olds

There are four main types of car insurance available to younger drivers. Each one covers different things and prices can vary.
The table below highlights the differences between the four types of insurance coverage and what they offer.

Type Damage to your vehicle Damage to other cars and property Damage or loss caused by theft or fire Liability of injuries or death to others
Compulsory Third Party Χ Χ Χ
Third Party Property Damage Χ Χ Χ
Third Party Fire and Theft Χ­ Χ
Comprehensive Χ

It’s a legal requirement to have Compulsory Third Party (CTP) insurance (or Green slip insurance for New South Wales’ residents) on any car that’s driven on Australian roads. Some – but not all – states include this in your registration fee so you may need to purchase CTP insurance. Before taking out car insurance, it’s important that you read the Product Disclosure Statement (PDS) to understand your policy’s inclusions, exclusions and conditions and the Target Market Determination (TMD) to find the right type of policy for you.

The cost of car insurance for young drivers

Are young drivers more likely to be involved in accidents?

How is the cost of car insurance for young drivers calculated?

Ways to reduce the cost of car insurance for young drivers

Can you get cheap car insurance for young drivers?

Other factors to consider when choosing car insurance

Important to know

Can I drive my parents’ car without insurance?

At what age does my car insurance premium go down?

Can I add my friend to my car insurance?

Can I add a learner driver to my car insurance?

Meet our car insurance expert, Adrian Taylor

Adrian Taylor
Executive General Manager – General Insurance

As Executive General Manager of General Insurance at Compare the Market, Adrian Taylor is passionate about demystifying car insurance for consumers, so they have a better understanding of what they’re covered for. Adrian’s goal is to make more information available from more insurers, to make it easier to compare and save.

1 Young drivers – the facts. Department of Transport and Main Roads. Queensland Government. 2023. Accessed June 2023.