Car insurance for young drivers in Australia

A practical guide to car insurance for drivers under 25 in Australia — why premiums sit higher, the levers that may bring them down, and how to compare policies properly when you're new behind the wheel.

Anyone who has shopped car insurance in their early twenties has probably had the same experience: the quote feels disproportionately high, and the difference between insurers seems even bigger than usual. There are real reasons for that, and there are real things you can do about it.

This guide walks through both. If you're newer to the topic in general, the car insurance hub covers the underlying basics first.

What is "young driver" car insurance?

There's no separate product called young driver insurance in Australia. Instead, most insurers price standard policies (third party, third party fire and theft, or comprehensive) higher when the regular driver is under 25, or charge an additional age-based excess at claim time when an under-25 was driving.

A handful of insurers run dedicated brands aimed at younger drivers — usually with telematics-based pricing or particular policy features. Whether they end up cheaper than a mainstream insurer's quote depends on the individual.

Key things to understand

• Age-based excesses — many policies layer an extra excess on top when an under-25 (sometimes under-21 or under-30) was driving at the time of the claim. This sits alongside the standard excess.
• Inexperienced driver excess — applied based on years held on a full licence, not age. A 30-year-old who just got their licence may also pay this.
• Listed vs unlisted drivers — most policies require regular drivers to be listed. Letting an unlisted under-25 drive can invalidate cover.
• Telematics options — some insurers reward demonstrated safe driving via an app or device. Trade-off is privacy and the discipline of being monitored.
• The car matters more than at any other age. Repair cost, theft frequency, and engine size all weigh heavily.
• The PDS and TMD — worth reading. See our how to read a PDS guide for which sections to focus on.

How to compare car insurance as a young driver

1. Decide on cover type first. If your car is older and worth less than a few thousand dollars, a third party policy may be a fair fit. If it's newer or financed, comprehensive often makes more sense.
2. Get matched quotes from at least three insurers — including one that runs a telematics product. The car insurance quotes page lists what to keep constant across each one.
3. Test different excess levels. Lifting the excess from $500 to $1,500 typically lowers the premium. Worth weighing against your ability to absorb the higher excess at claim time.
4. Check the age-based and inexperienced driver excesses for each policy. They can swing the real cost of a claim by thousands.
5. Read the PDS and TMD on your shortlist. Pay attention to driver restrictions and exclusions.

Our compare car insurance page covers the broader framework if you want a refresher.

Common mistakes to avoid

• Listing a parent as the main driver to drop the price ('fronting'). Often invalidates a claim if the insurer works out the car is mainly used by someone else.
• Going with the cheapest policy without checking what's excluded — covered in detail on our cheap car insurance page.
• Picking a high-performance or modified car without checking the impact on premiums first.
• Not declaring all regular drivers — partner, sibling, housemate.
• Forgetting to update the insurer when you move from P-plates to a full licence. Some insurers will reprice immediately rather than at next renewal.

What affects how much a young driver pays

• Age and licence type. P-plate vs full licence is one of the biggest single factors.
• The vehicle. A small, common, easy-to-repair car will almost always quote cheaper than a sportier or harder-to-source one.
• Where you park. Off-street parking and a lower-claim postcode help.
• Claims and infringement history. Even minor incidents stay on the insurer's view of you for several years.
• Excess level chosen. Higher excess equals lower premium, within limits.
• Whether telematics is in play. Real benefit depends on driving style.

The car insurance cost page covers the wider set of factors that affect any driver's premium.