Car Insurance for Under-25s

If you’re a young driver under 25, compare a range of quotes online to help you find the best deal for your needs.

Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on February 15th, 2024       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

Car Insurance Banner

Are you under 25 and looking for car insurance? As a young driver, finding affordable car insurance can be a challenge, as many insurers consider those under 25 to be high-risk drivers. However, even if you don’t have much driving experience, it's still possible to find a policy that suits your needs and budget, especially when you compare online.

What types of car insurance policy can I buy as a driver under 25 and what do they cover?

As a driver under 25 in Australia, you have a few options when it comes to car insurance policies. It's important to understand what these policies cover before you buy them. Their key coverage areas are as follows:

Comprehensive TPFT TPPD CTP
Damage to someone else’s property
Damage to your car due to fire
Damage to your car due to theft
Damage to your car due to weather
✓*
Damage to your car due to accident or collision
Injury or death of someone else in an at-fault accident

*Not all weather-related incidents are covered under a comprehensive car insurance policy. Check your PDS to find out what's covered and what isn't.

CTP insurance is different from the other types of cover in that it's mandatory for all drivers to purchase it. Depending on where in Australia you live, your CTP premiums may be included in the cost of vehicle registration.

How much will my car insurance policy cost if I’m under 25?

The cost of car insurance for drivers under 25 is typically higher than for older, more experienced drivers due to their higher risk of accidents. As a general rule, the younger and less experienced you are, the more you’ll pay for insurance. However, the actual cost of your car insurance policy will depend on several factors, including:

  • Your age and experience: as mentioned, the older and more experienced you are, the less of a risk you’re likely to be seen as. This means that a new teenage driver, such as an 18-year-old, may pay more than what a 21-year-old would (though the difference may be marginal).
  • Type of vehicle: the make and model of your car will affect the cost of your insurance policy, as some cars are considered higher risk due to factors such as their value, safety rating and cost of repairs.
  • Type of insurance: comprehensive insurance tends to be more expensive than third party or third party fire and theft insurance, as it offers more coverage in the event of an accident or damage to your vehicle.
  • Where you're living: if you live in an area with higher rates of accidents, theft or extreme weather, your insurance premiums may be higher to reflect this increased risk. For example, drivers in Queensland may pay more than in South Australia.
  • Your parking arrangements: if you park your car in a garage or driveway, you may be eligible for a lower insurance premium compared to parking on the street.
  • Your claims history: a history of making frequent insurance claims will likely result in your premiums being higher, as you’ll probably be considered a higher-risk driver.
  • How much you use your car: if you use your car frequently for work or long-distance travel, you may pay more for insurance than someone who catches public transport to work and only drives on the weekends.
  • Your excess: choosing a higher excess can lower your insurance premiums, but also means you’ll have to pay more out of pocket if you need to make a claim. Younger drivers may be required to pay a higher excess as part of their insurance policy in some cases.
  • Any applicable discounts: some providers offer discounts for a range of reasons, such as signing up, not claiming for an extended period or bundling multiple insurance policies together.

Types of car insurance you can choose from

Top tips for saving on your car insurance as an under-25

Increase your excess

Increasing your excess can help you save on car insurance as a young driver. However, it’s important to ensure that you can afford to pay the higher excess amount in the event of an accident, so try to avoid setting this at an unmanageable level.

Choose market value insurance

Choosing market value insurance instead of agreed value insurance can also help you save. This type of insurance covers your car for its current market value, meaning you’ll be paid what your insurer says it’s worth at the time of being written off or stolen.

Pay your premiums annually

Paying your premiums annually instead of monthly can often lead to lower overall costs. Many insurers offer discounts for annual payments, so it’s worth considering if you can afford to pay upfront. Don’t pay this if you aren’t comfortable with doing so, though.

Compare policies

Finally, comparing policies online can help you pick out the most suitable offer for your needs. With a range of insurers and policies to choose from, you can compare quotes based on cost, coverage, extras and more. 

Common questions about car insurance for under-25s

Can I be added to my parents’ car insurance policy if I’m under 25?

Yes – you can be added to your parents’ car insurance policy if you’re under 25. This is known as being listed as an additional driver on the policy and is generally designed for those who live at home and/or don’t have their own vehicle. It’s important to note that being listed as an additional driver may affect the premium of the policy.

Do I have to have car insurance?

Yes – in Australia, the minimum requirement is compulsory third party (CTP) insurance, which covers personal injury to others in an accident. However, as long as you have CTP, it’s possible to drive without any other type of insurance.

Am I covered if my car is unregistered at the time of the accident?

No – if your car is unregistered at the time of the claim, you won’t be covered by your car insurance policy. In Australia, it’s illegal to drive an unregistered car on the road, and insurance companies won’t provide coverage for unregistered cars.

Can I still be covered if a friend who isn’t listed on my policy causes damage to my car?

You may still be covered if a friend who isn’t listed on your policy damages your car or another person’s property, but you’ll need to make sure your policy allows for it. This is known as the ‘unlisted driver' option and may affect the premium of the policy. However, if your unlisted driver is 25 or under, you may be liable to pay an additional excess with some insurers.

Is car insurance cheaper if I’m a woman under 25?

Premiums are generally cheaper for women than they are for men. This is because, on average, women are involved in fewer accidents and make fewer claims as a result. This means that the premiums for a 25-year-old female driver will often be cheaper than a male driver with the same profile.

Will I be able to buy a policy if I’m a P-plater or L-plater?

You can still buy a policy if you’re a P-plater or L-plater, but you may need to pay a higher premium due to your lack of driving experience. It’s important to disclose your driving experience and licence status when applying for car insurance.

Helpful guides on car insurance

Car Insurance Banner - Smiling young woman giving her friend a lift after buying car insurance.

How Much is Car Insurance?

Find out about what influences car insurance premiums and how you could keep costs down. Car insurance is an important...

Car Insurance Banner - Young couple looking at car insurance documents, including their certificate of currency.

Certificate of Currency

Learn about what a certificate of currency is when it comes to your car insurance policy in Savvy’s guide. Are...

Compare car insurance policies with Compare the Market

Savvy is partnered with Compare the Market to help you compare a range of car insurance policies from a panel of trusted providers.

Explore car insurance options by make

Select your car make and find out how much it may cost to insure, read helpful guides and compare quotes.

Disclaimer:

Savvy (ABN 78 660 493 194, ACR 541 339) provides readers with a variety of car insurance policies to compare. Savvy earns a commission from our partnered insurers each time a customer buys a car insurance policy via our website. All purchases are conducted via our partners’ websites. The integrity of our comparison service is unaffected by our partnerships with those businesses and our effort remains to bring further brands that do not already use our comparison service onboard.

Savvy’s comparison service includes selected products from a panel of trusted insurers and does not compare all products in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy. We always recommend readers to consult the Product Disclosure Statement (PDS) of different policies before purchasing your car insurance.