Young Aussies and Car Insurance: How to Get the Best Deal

Getting car insurance as a young driver in Australia can feel like a financial shock. Drivers under 25 face some of the highest premiums on the road, with the average annual comprehensive policy for someone under 21 sitting at around $3,609. That’s a steep price for a first car, and it’s easy to assume there’s no way around it. Here’s what you actually need to know.

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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.

Those numbers aren’t random. Insurers base them on real crash data, and the gap between age groups is wide. But the good news is that the strategies for lowering your premium are well documented. Choosing the right car, adjusting your excess, and comparing insurers can make a real difference. If you’re just starting out, it’s worth understanding why younger Aussie drivers pay more for car insurance before you start shopping around.

The central concept here is the young driver excess — an additional fee you pay on top of your standard excess if you’re under 25 and at fault in a claim.

What I tend to notice is that many young drivers don’t realise this excess exists until they make a claim. It’s not a hidden fee — it’s listed in the policy documents — but it’s easy to overlook when you’re focused on the monthly premium.

What happens when you underestimate the cost of being under 25

The financial impact of being a young driver isn’t just about the annual premium. It’s about how quickly costs can stack up if something goes wrong. A single at-fault accident can trigger your standard excess, your young driver excess, and a premium hike at renewal. That combination can turn a manageable policy into a very expensive one.

Consider this: drivers aged 17 to 24 make up 13% of licensed drivers but account for 26% of at-fault crashes. Insurers price that risk directly into your premium. The average comprehensive policy for a 21-to-24-year-old is $2,556, but for someone under 21 it jumps to $3,609. That’s a difference of over $1,000 simply for being a few years younger.

Location isn’t the only factor. Gender stopped being used as a rating factor in Australia back in 2014, but driving experience, time of day you drive, and the type of car you own all still count. If you’re a male under 25, the average premium is $3,075 compared to $2,521 for females — but that gap is driven by other factors like car choice and driving patterns, not gender itself.

My first move would be to check what your current policy actually charges for the young driver excess. Some insurers like Budget Direct charge $500, while NRMA can go up to $900. That’s a $400 difference you might not notice until you claim.

Where young drivers commonly overpay

Choosing the wrong car before checking insurance costs

This is the biggest one. A high-performance or modified car can increase your premium by 20–35% compared to a low-risk model like a Toyota Corolla or Mazda 3. The ANCAP safety rating also matters — a 5-star rated car with autonomous emergency braking and lane-keep assist reduces the insurer’s risk, which lowers your premium. If you’re shopping for a first car, it’s worth checking insurance quotes before you buy. A car safety rating guide can help you compare models before you commit.

Sticking with the first quote you get

Loyalty doesn’t pay here. The difference between the cheapest and most expensive insurer for the same driver can be hundreds of dollars. Bingle quotes around $1,900–$2,400 for comprehensive cover for under-25s, while NRMA and RACV are in the $2,500–$3,000 range. That’s a potential saving of $600 a year just by switching. Online-only insurers often offer discounts for buying directly, so it’s worth getting at least three quotes.

Ignoring the young driver excess when comparing policies

Two policies might look similar on the monthly premium, but the young driver excess can be very different. Budget Direct charges $500, AAMI charges $800, and NRMA charges $600–$900. If you’re a young driver who’s likely to be the main driver, a lower excess can save you a lot if you need to claim. It’s not just about the premium — it’s about the total cost of a claim.

Paying monthly instead of annually

Most insurers charge interest or fees for monthly payments. Paying the full annual premium upfront can save you 5–10% compared to monthly instalments. If you can’t afford the lump sum, consider setting aside the monthly amount yourself and paying annually when the renewal comes — you’ll keep the discount.

How to actually get a better deal on car insurance

Choose your cover level based on car value

Comprehensive insurance covers damage to your own car and others, but it’s expensive. For a car worth $5,000 or less, third-party property insurance is often the smarter choice. It costs $600–$900 a year for under-25s, compared to $2,000–$2,800 for comprehensive. Third-party fire and theft sits in the middle at $800–$1,200. The rule of thumb is: if your car is worth less than $15,000, comprehensive might not be worth it, because a single accident could cost more in premiums than the car is worth.

Increase your excess strategically

Raising your standard excess from $500 to $1,000 can reduce your premium by 10–20%. On a $2,500 policy, that’s $250–$500 saved each year. The trade-off is that you’ll pay more if you claim, so only do this if you have savings to cover the higher excess. It’s a good option if you’re a careful driver and don’t expect to claim often.

• 1
  Check your current excess amounts

  Log into your policy or call your insurer to find your standard excess and young driver excess.

• 2
  Get quotes with a higher excess

  Use comparison sites or go directly to insurers like Bingle, Budget Direct, and Youi. Set the standard excess to $1,000 and see how the premium changes.

• 3
  Compare the total cost

  Look at the premium plus the excess. A lower premium with a high excess might still be cheaper overall if you don’t claim.

• 4
  Switch or negotiate

  If you find a better deal, ask your current insurer to match it. If they won’t, switch before the renewal date.

Add a named driver and avoid “any driver” cover

If you’re the main driver, listing your parents as named drivers on your policy can reduce the premium by 5–15%. Insurers see an experienced driver on the policy as lower risk. But don’t list yourself as a “named driver” if you’re actually the main driver — that’s called fronting and insurers can void your policy if they find out. Also, avoid “any driver” cover if you’re the only one driving. It’s more expensive and unnecessary.

Take advantage of discounts and safety features

Many insurers offer discounts for good students, safe drivers, and completing a skilled driver training course. AAMI, for example, offers a discount for completing an approved course. Installing an anti-theft device like an alarm or immobiliser can also lower your premium. If your car has autonomous emergency braking or lane-keep assist, mention it when getting quotes — some insurers factor these into their pricing.

Frequently asked questions about young driver car insurance

The real saving comes from understanding how insurers think

Insurers don’t set young driver premiums arbitrarily. They use data on crash rates, claim costs, and risk behaviour. The more you align with what they consider low-risk — a safe car, a higher excess, a clean driving record, and a named experienced driver — the lower your premium will be. It’s not about gaming the system. It’s about knowing which levers actually move the price.

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 10 essential tips for choosing full coverage car insurance in Australia.

Sources and Further Reading

Australian car insurance scores: how tips affect premiums — A deeper look at how specific actions like increasing excess or choosing a safer car change your premium.

CHOICE (2026). Young drivers car insurance guide. 🔗

Properfolio (2025). Young drivers in Australia: why under-25 premiums are higher. 🔗

CNBC Select (2025). Best car insurance for teens and young drivers. 🔗