If you’re under 25 and shopping for car insurance in Australia, the numbers can feel like a punch to the wallet. A 21-year-old driving a modest 2019 Toyota Corolla in suburban Sydney can expect to pay between $2,100 and $3,000 a year for comprehensive cover, depending on the insurer. That’s roughly three times what a driver in their 60s pays for the same car. The gap isn’t random — it’s built on crash statistics that insurers use to set your price.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
Insurance companies don’t set these rates out of spite. The Insurance Council of Australia reports that drivers aged 17 to 24 make up just 13% of licensed motorists but account for 26% of at-fault crashes. Combine that with higher rates of speeding and drink-driving in this age group, plus more driving at night and on weekends, and the risk profile is hard to ignore. Gender hasn’t been used as a rating factor since 2014, so a 19-year-old man and woman pay the same base premium for the same car and suburb. What you can change — and what you can’t — is what this article is about. Here’s what you actually need to know.
What I tend to notice is that most young drivers focus on the monthly premium and ignore the excess structure until they need to claim. That’s when the real cost hits. Worth weighing the two together from day one. For a deeper look at how insurers assess risk, you might find our piece on gender bias in car insurance claims data useful context.
What the Numbers Actually Look Like for a Young Driver
Let’s put real dollars on the table. Based on quotes collected by Finder Australia from over 27,000 policies in January 2026, the average comprehensive premium for a driver under 21 sits at $3,609–$3,794 per year. For drivers aged 21 to 24, that drops to $2,512–$2,556. At age 25, the average falls to around $2,026. Location matters too: Victoria averages $3,614, New South Wales $3,362, Queensland $2,554, and Tasmania $2,088.
These aren’t just numbers on a page. A 20-year-old in Sydney paying $3,600 a year is outlaying $300 a month before they’ve put a litre of fuel in the tank. For a household already dealing with mortgage stress and rising living costs, that’s a material chunk of cash.
Here’s how the major insurers compare for a 21-year-old driving a 2019 Toyota Corolla in suburban Sydney with no at-fault claims:
→ Scroll right to see all columns
| Insurer | Annual Premium (est.) | Young Driver Excess |
|---|---|---|
| Bingle | $1,900–$2,400 | $700 |
| Woolworths | $2,000–$2,500 | Multi-policy discount |
| Budget Direct | $2,100–$2,500 | $500 |
| Coles | $2,100–$2,600 | Flybuys points |
| Youi | $2,200–$2,700 | $600 |
| AAMI | $2,400–$2,800 | $800 |
| NRMA / RACV | $2,500–$3,000 | $600–$900 |
The spread between the cheapest and most expensive option for the same driver and car is over $1,000 a year. That’s real money you can keep by comparing quotes rather than accepting the first renewal notice. CHOICE research suggests switching providers can save up to $692 annually — and for young drivers the gap is often wider.
That 13-to-26 imbalance is the core reason young driver premiums are high. Insurers don’t have a choice — they price for the risk the data shows. But knowing this also tells you what to fix: drive safely, avoid claims, and let time and experience work in your favour.
Costly Mistakes That Keep Premiums High
Fronting — listing a parent as the main driver when you’re not
This is the most expensive mistake you can make, and it’s also insurance fraud. Some young drivers list a parent as the primary policyholder to get lower premiums, even though the young person drives the car most of the time. If the insurer finds out — and they often do, through claims investigations or social media — they can void the policy entirely and refuse to pay out. You’re then left with no cover and a cancelled policy on your record, which makes future insurance even more expensive. The Mozo guide on young driver insurance is clear: misrepresenting the primary driver can void claims. If you own the car, you need your own policy — most Australian insurers require the registered owner and policyholder to match.
Filing small claims that wipe out your no-claim bonus
A single claim can cost you far more than the repair. Say you have a $600 bumper scrape and your combined excess (standard plus young driver) is $1,200. Filing the claim costs you $1,200 out of pocket, and you lose your no-claim bonus — which could be worth 10–15% of your premium next year. On a $2,500 policy, that’s $250–$375 in higher premiums for the next year, and the discount resets. The research suggests avoiding small claims when the damage cost plus young driver excess exceeds the saving from preserving your no-claim bonus. A good rule: if the repair costs less than your total excess, pay for it yourself.
Choosing the wrong level of cover for your car’s value
Comprehensive cover for a car worth $5,000 or less can cost $2,000–$2,800 a year. Third Party Property insurance, which covers damage to other people’s cars but not your own, runs $600–$900 annually. After three years of comprehensive cover on a cheap car, you’ve paid $6,000–$8,400 in premiums for a vehicle worth $5,000. That math doesn’t add up. For a car worth $15,000 or more, the risk flips — one at-fault accident could cost you $15,000 out of pocket, so comprehensive makes sense. Third Party Fire and Theft sits in between at $800–$1,200 for under-25s, covering fire and theft but not collision damage. Match the cover to the car’s value, not your fear of the worst-case scenario.
Not comparing quotes at renewal
Loyalty doesn’t pay in car insurance. The same insurer that charged you $2,400 last year may quote you $2,800 this year, while a competitor offers $2,100 for the same cover. The CHOICE data shows switching saves up to $692 a year on average. For young drivers, the gap is often larger because insurers use introductory pricing to attract new customers. Set a calendar reminder to compare quotes at least two weeks before your renewal date. Use comparison sites, check the insurers in the table above, and don’t assume your current provider will give you the best price.
If you’re unsure about a policy term or a claim denial, getting a second opinion on the legal side can save you from a costly mistake. JustAnswer Business Law connects you with professionals who can explain your rights without you having to visit a lawyer’s office.
What Actually Brings the Premium Down
Choose a low-risk car before you buy
This is the single most powerful thing you can control. A 2018 Toyota Corolla costs significantly less to insure than a 2018 Volkswagen Golf GTI — the annual difference can exceed $1,500. Cars with five-star ANCAP safety ratings cost less to insure because they reduce claim severity. Features like autonomous emergency braking and lane-keep assistance also lower premiums. Before you buy any car, get an insurance quote for that specific model. The premium difference between two similar-priced cars can be hundreds of dollars a year.
Increase your excess and pay annually
Raising your standard excess from $500 to $1,000 can reduce your premium by 10–20%. You’re taking on more risk if you need to claim, but the saving is guaranteed every year. Paying annually instead of monthly cuts another 5–8% — monthly payment plans effectively charge you interest on the premium. Together, these two moves can save $300–$600 a year on a typical young driver policy.
Use telematics to prove you’re a safe driver
ROLLiN’ Insurance offers a telematics-based policy that tracks your driving through an app and assigns a monthly score. Safe driving unlocks discounts of 10–20% on top of any no-claim bonus. The key difference: ROLLiN’ doesn’t charge an age-based excess, saving you up to $800 on a claim compared to a standard policy. Other digital-first insurers offer similar programs. If you’re a careful driver, telematics lets you prove it rather than being lumped in with the statistical averages.
Build your no-claim bonus from day one
One claim-free year earns a 10–15% discount. After five to six years, that grows to 40–65% off your base premium. A $2,500 annual premium could drop to $1,200 after five years of no claims. Some insurers offer no-claim bonus protection for an extra $50–$100 a year, which lets you make a limited number of claims without losing your discount. Avoid small claims, drive defensively, and let time do the work. Being listed as a named driver on a parent’s policy can also help you build a no-claim history, as long as the policy is set up correctly and you’re not the primary driver when you should be the policyholder.
What’s coming next — premium trends to watch
Comprehensive premiums have risen 42% since 2019, hitting an average of $1,052 in 2024. Repair costs are up 42% over the same period, from $3,658 to $5,202, and rental car costs while your vehicle is being repaired have jumped 70%. The insurance industry absorbed $560 million in fraud losses in 2023, and those costs flow through to premiums. Tasmania saw a 65% average premium increase in the past 12 months alone. The Insurance Council of Australia has released a roadmap calling for regulatory streamlining, but labour shortages in repair shops remain entrenched. The outlook: premiums are likely to keep climbing for at least another year or two. That makes every discount and saving strategy more valuable now than it was last year.
If you’re juggling multiple policies, bundling can help. JustAnswer Finance offers access to professionals who can help you compare options and understand policy fine print without committing to a costly adviser.
Frequently Asked Questions About Young Driver Insurance
Can I be added to my parents’ policy instead of getting my own? ▾
Does having a full licence lower my premium compared to a P-plate? ▾
Will a defensive driving course actually reduce my premium? ▾
What happens if I modify my car — does my insurance still cover me? ▾
Is third-party property cover ever a bad idea for a young driver? ▾
How long does it take for my premium to drop to normal levels? ▾
The Long View: Premiums Aren’t Coming Down Soon
Car insurance costs in Australia are at a 20-year high, and the pressures driving them up — repair labour shortages, rising parts costs, rental car expenses up 70% since 2019, and $560 million in annual fraud losses — aren’t easing quickly. The Insurance Council of Australia’s roadmap calls for regulatory changes, but those take years. For a young driver, the practical reality is that premiums will likely keep rising for the next couple of years at least. That makes every strategy in this article more urgent: choose the right car, avoid claims, compare quotes at every renewal, and build your no-claim bonus from the first day you hold a policy. The drivers who do those things consistently are the ones who see their premiums drop fastest.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read The Secret Car Insurance Discounts Australia Doesn’t Want You to Know.
Sources and Further Reading
Uninsured Drivers in Australia: How to Protect Yourself — What happens when you’re hit by someone without cover and how to avoid being left out of pocket.
Road Rules and Car Insurance: Don’t Make These Costly Mistakes — Licence breaches and policy traps that can void your cover without you realising.
Insurance Council of Australia. Young driver crash statistics. 🔗
Finder Australia (January 2026). Car insurance for under 25 — 27,396 quotes analysed. 🔗
Mozo (2026). Young drivers car insurance guide. 🔗
The Daily Perspective (26 March 2026). Car insurance premiums hit 20-year high as repair costs spiral. 🔗
CHOICE. Car insurers with the biggest price hikes. 🔗
