Car running costs for young drivers plunge £500 due to lockdown
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The amount young drivers spend on running a car has fallen by more than £500 in the last year, according to new data.
Analysis of costs such as fuel, insurance, tax and breakdown cover shows that the average annual bill for drivers aged 17 to 24 has fallen to £1,737 - a six-year low.
Much of this drop is down to the effect of the Covid pandemic and lockdown on drivers’ behaviour, which has seen young motorists half their estimated annual mileage.
The average young driver is now insured to drive 3,541 miles compared to 7,347 in the first half of 2020.
The average fuel cost has fallen by £453 since the first half of 2020, down to £416 as young drivers cover fewer miles. Keeping their car fuelled accounts for almost a quarter of the total running costs for young motorists.
However, insurance is still by far the biggest expense - accounting for 61 per cent of running costs.
The reduction in mileage, along with a drop in premiums across the entire industry, means there has been an estimated 10 per cent drop in insurance costs for 17 to 24-year-olds. The average premium now stands at £1,062, according to the research by Compare the Market.
Its young driver report examined the cost of insurance, fuel, VED, MOT and breakdown cover to come up with the average running costs, as well as looking at the most popular models for young drivers according to insurance quote data.
Taking into account the average price of the 10 most popular models, including the likes of the Ford Fiesta, Fiat 500, Vauxhall Corsa and Mini, the report found that running costs including buying a car were £4,633 per year – a £2,145 reduction on 2020.
Ursula Gibbs, director at Compare the Market, said: “Following lockdowns and working from home, many young motorists have drastically reduced how many miles they will drive this year. These young people will be comforted that the cost of driving has fallen as a result. The steep drop in costs will hopefully ease some of the financial strain many young people are under – and prevent driving from becoming prohibitively expensive.
"However, paying for insurance remains by far the biggest running cost for young drivers. One of the best ways to cut this cost is to avoid the trap of auto-renewing. Young motorists could typically save £178 by searching for a better deal when their policy ends.”
She also warned that drivers should not be tempted to make unrealistic claims about their mileage in the pursuit of cheaper insurance.
"When buying car insurance, young motorists should try to be as accurate as possible when providing their expected mileage for the year. If a motorist underestimates their mileage and needs to make a claim, it could invalidate their policy and their insurance provider could refuse to pay out."