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Young drivers car insurance: how it works and what you need to know

Young female p-plater in car with supervising driver

Under 25 and gearing up for a drive? Before you zip off for beach trips or late-night snack runs, let’s get you sorted with a car insurance policy that’s got your back for everything from bumper bingles to major oopsies.

Whether you’re a learner, a P-plater or fully licensed but still under 25, being a young driver means your options and your costs can vary, especially when it comes to who owns the car, where you live and how experienced you are behind the wheel.

Cheap car insurance for under 25s

Every year, we hold our Mozo Experts Choice Car Insurance Awards, where we identify the insurance providers that consistently offer lower premiums than the competition. For young drivers seeking cheap policies and manageable excesses, here are our top picks from our 2024 awards:

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Important disclosures
ROLLiN' comprehensive car insurance*
  • Flat $800 excess for all listed drivers (even under 25s)
  • No extra fees for monthly payments
  • Award-winning value

Supported by IAG, ROLLiN' changes the game for young drivers with its subscription-style model, earning 2023 Mozo Experts Choice Awards for Exceptional Value Young Drivers^. Speaking of younger drivers, ROLLiN' charges a flat $800 excess fee for all drivers listed on the policy, including those under 25. ROLLiN' also allows for hassle-free monthly payments. A standout feature is the flexible choice of replacement transport after a no-fault accident, covering up to $80 a day, enhancing mobility without the stress. Remember, there's a hefty $3,000 excess for unlisted drivers, so including regular drivers on your policy is key to avoiding unexpected costs.

Budget Direct comprehensive car insurance*
  • 15% online signup discount (T&Cs apply)
  • Tailor your policy to keep costs down
  • Award-winning policy

Budget Direct, clinching a 2023 Mozo Experts Choice Award for Young Drivers^, entices with a 15% discount off your first year's premium for online sign-ups. Its flexible policy keeps costs manageable by allowing young drivers to select exactly what features they need, including choice of excess, agreed or market value, choice of repairer and more. Keep in mind that there are additional excesses of between $500-$600 for young and inexperienced drivers, depending on age and years of driving experience (this is quite common).

As you can see, it’s certainly possible to get cheap car insurance as a young driver; however, it’s important to note that other factors like your age and where you live, or your car's make and model can impact how much your policy costs.

And it’s not always about price! Sometimes, the best young driver car insurance isn't always the cheapest option. While price matters, it's essential to consider the overall value you receive from policy. Striking the right balance is key.

Do I need my own car insurance policy if I’m under 25?

Whether you're under 25 with your own car or using a family vehicle, the starting point in Australia is the same: Compulsory Third Party (CTP) insurance is a legal requirement for all drivers. If you’re driving your own set of wheels, you’ll need your own CTP policy, which protects you from civil liability if you injure someone in an accident. However, you won’t need your own CTP policy if you’ll only be driving the family car. In that case you just need to convince your parents to add you to their policy as a listed driver. Just be aware that this can increase their premiums, since younger drivers are statistically riskier to insure.Since CTP only covers injuries (and not anyone’s car or other property), higher levels of insurance are available. That’s what we’ll discuss next.

How much does car insurance cost for a young driver?

All else being equal, car insurance for young drivers is usually higher than average, since younger drivers are statistically more likely to cause an accident. 

However, experience also plays a role. So, for example, if you're under 25 with P-plates, you'll find yourself at the higher end of the premium scale. Shedding those P-plates for a full licence might offer a slight reprieve in costs, but you should still expect to pay more than a middle-aged adult. 

Of course that’s not all that plays a role: the car you drive, where you live, your parking situation and even your gender are taken into account.

So while we can’t give you an exact cost, we have identified a few insurance policies that offer the best value for younger drivers. Let’s take a look:

What should I know when taking out my first car insurance policy as a young driver?

As a young driver in Australia, your premium is likely to be more expensive compared to an older driver with a good driving record and a full licence. Here are some important car insurance factors you'll want to consider as a young driver.

Basic car, basic premium

Generally speaking, the simpler your car, the less you pay on car insurance. In most instances, you will not be allowed to drive a high-powered car until you have your full licence. If caught driving one, you may lose your licence, get penalised, and if at fault in an accident, your insurance company may void your policy altogether. 

Keep your driving record clean and well-oiled

If you have a clean driving record while on your P plates, you may be rewarded with a discount on your policy. If you complete a ‘safe driving course’ you could see further discounts for your conscientious efforts.

And if you’ve been driving everyday since you were 17 and you’re now 23 years old, that’s six years driving experience. And if you have a pretty good track record when it comes to safe driving, then you could be entitled to car insurance premium discounts. No harm in asking.

Compare quotes

Car insurance is probably the last thing on your mind when purchasing a new car, but it should never be rushed. Take the time to compare quotes, as you could save heaps every year by finding the best value coverage available for you.

You can start this research mission by checking out the best car insurance policies as crowned by Mozo's expert judges. The list includes options that are ideal for young drivers.

Common car insurance considerations for young drivers

There are a few extra things young drivers need to think about when it comes to car insurance. From licence-related restrictions to how insurers assess risk, these factors can affect your eligibility, your premium, or whether you're covered at all.

Here’s what to keep in mind depending on your licence type.

Car insurance for under 25s (with full licence)

If you’re under 25 and fully licensed, you're no longer bound by learner or provisional restrictions, but age alone can still affect your insurance.

Most insurers consider under 25s to be higher risk, which means your premium may be more expensive. Some providers also apply a young driver excess, even if you’ve held a full licence for years.

A few things to consider:

  • You may not qualify for the lowest premiums until you’ve built a longer no-claims history
  • If you’re still driving your parents’ car, make sure you're listed on their policy or you might not be covered
  • If you’ve bought your own car, look for a policy that balances premium cost with the features you’ll actually use

Driving experience, car type and how you use the vehicle all come into play—so it’s worth checking what options are available for your situation.

Car insurance for P-platers

P-platers, including those on a P1 or P2 licence, have more freedom than learner drivers, but there are still important restrictions that can affect insurance. Whether you are listed on someone else's policy or have your own, insurers expect P-plate drivers to follow their licence conditions closely.

These actions could void your cover:

  • Driving with any amount of alcohol or illicit drugs in your system
  • Exceeding the permitted speed limit
  • Using a mobile phone in any way, including hands-free
  • Carrying passengers during restricted hours (for P1 drivers)
  • Driving a high-performance vehicle

Even though P2 drivers face fewer restrictions than P1s, the general principles still apply. Follow your licence conditions and be upfront with your insurer.

Car insurance for learner drivers

Most learner drivers are covered under their supervisor’s policy, but that doesn’t mean anything goes. Insurers expect learners to stick to the rules, and breaking them can result in denied claims or cancelled cover.

Things that could void your insurance include:

  • Driving with any amount of alcohol or illicit drugs in your system
  • Driving unsupervised, or supervised by someone who is not fully licensed
  • Exceeding the permitted speed limit
  • Using a tow bar
  • Using your mobile in any way, including hands-free
  • Misleading your insurer about the type of car you drive

Young driver car insurance FAQs

Is car insurance more expensive if I'm under 21?

Yes, drivers under 21 generally pay more for car insurance because they are seen as higher risk. Prices may improve slightly once you gain more experience or move to a full licence.

Can an L-plater register a car in their own name?

Yes, L-platers can register and insure a car in their own name. But they must still be supervised while driving and may face higher premiums or added conditions. In most cases, it’s not worth it.

Is it expensive to add a learner driver to your insurance?

It can be. Some insurers increase the premium or apply a higher excess if a learner is added to the policy. Others may include learners at no extra cost, so it’s worth comparing.

What's the best comprehensive car insurance for young drivers?

There’s no one-size-fits-all policy, but our Mozo Experts Choice Awards highlight comprehensive policies that offer strong value for young drivers. Use our comparison tool to weigh features like excess, agreed value and optional extras.

What is the cheapest car insurance for P-platers?

Cheapest will vary based on your age, driving history and location, but providers like Budget Direct and ROLLiN’ have been recognised in our Mozo Experts Choice Awards for offering low premiums and flexible features for P-platers.

Brad Buzzard
Brad Buzzard
RG146
Senior Money Writer

Brad is a senior writer at Mozo, covering insurance and superannuation with a research-driven approach. With a background in marketing analytics, he ensures content is clear, accurate and genuinely useful.


* Terms, conditions, exclusions, limits and sub-limits may apply to any of the insurance products shown on the Mozo website. These terms, conditions, exclusions, limits and sub-limits could affect the level of benefits and cover available under any of the insurance products shown on the Mozo website. Please refer to the relevant Product Disclosure Statement and the Target Market Determination on the provider's website for further information before making any decisions about an insurance product.

^See information about the Mozo Experts Choice Car Insurance Awards