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Young drivers 'paying £940m extra for cover'
30 June 2008
Younger motorists in Britain are paying an estimated £940 million extra each year in order to insure their cars, new figures show.
According to uSwitch.com, young drivers (aged 17-25) comprise just seven per cent of the UK car insurance market, but are paying more than a fifth (22 per cent) of total premiums. The average car insurance premium for young motorists standing at £989 compared with £459 for other drivers.
Research by the price comparison website indicates that age is a key factor used by insurers to determine risk when deciding car insurance premiums and young drivers tend to pay over twice as much as other motorists (115 per cent) to insure vehicles.
The car insurance industry could face sweeping changes to the way in which people are charged insurance premiums under changes to age discrimination legislation included in the Equalities Bill, which may become law this year.
Currently, young drivers pay an average of 69 per cent of the value of their car in insurance premiums and some motorists even find that they are rejected by insurers because of their age.
A recent study by Confused.com found that young drivers face significantly penalties for receiving points on their licences, potentially adding hundreds of pounds to insurance premiums.
