Lower fuel and insurance costs have caused young drivers’ car running costs to plummet, according to new research. A study by price comparison site CompareTheMarket.com found the average young driver’s annual car running costs have tumbled by more than £500 compared with last year.
CompareTheMarket.com’s data suggests the average 17-24-year-old driver will now pay £1,737 to run a car in the first year – the lowest annual running cost since the company began collecting such data six years ago. However, it seems the drop in prices is down to the coronavirus lockdowns that have reduced drivers’ annual mileage and therefore cut their insurance premiums.
According to CompareTheMarket.com, the first six months of 2021 saw drivers insured to drive for an average of just 3,541 miles, down from 7,347 during the same period in 2020. That reduction has also caused fuel costs to drop to an average of £416, down £453 on last year despite an increase in the cost of petrol.
However, CompareTheMarket.com says car insurance still makes up more than half (61 percent) of young drivers’ overall car running costs. Despite the reduced mileage and a drop in accidents during lockdown, the average annual premium still stands at £1,062. That’s a 10 percent drop compared with the first half of 2020, but it’s still a huge amount of money – almost double the average premium for drivers of all ages.
Overall, the research showed the typical cost of the first year of a driver’s motoring career had fallen by £536 in the first half of 2021 compared with the same period in 2020. However, when the typical cost of buying a car is included, the total cost is £4,633 – a £2,145 decline compared with the same time last year.
“Following lockdowns and working from home, many young motorists have drastically reduced how many miles they will drive this year,” said Ursula Gibbs, director of CompareTheMarket.com. “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. Motorists may lose out by choosing to auto-renew their policy if the price given by their insurer is roughly the same or slightly cheaper than last year.
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"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 payout. If drivers overestimate their mileage, they may be paying more than they need to for their premium."
Source: comparethemarket.com