Disclaimer: This information is general in nature only. While Budget Direct has endeavoured to ensure the information we’ve relied on is accurate and current, we do not guarantee it. Budget Direct accepts no liability for this information.

Sometimes, age is just a number. But when it comes to your car insurance, age is one of many factors used to determine the amount of risk you might pose on the roads. For under 25s, this may mean that you’ll be placed in the high-risk category.

But what is ‘risk’ on the roads, and are there still ways to save on car insurance if you’re a younger driver? Well, that’s exactly what we’re here to find out.

What makes someone a high-risk driver?

‘Risk’ to insurers is determined by several things, such as your age, gender, driving experience, and how often you drive. ‘High risk’ drivers are typically those who:

  • Are inexperienced
  • Have a history of traffic offences or licence suspensions
  • Have made previous claims
  • Spend more time on the road (particularly during peak hour times).

Why are drivers under 25 considered high risk?

Drivers under 25 tend to have less driving experience than drivers over 25, which tends to correlate to risk. Data from the Queensland Government shows that young drivers aged 16 to 24 are 60% more likely to be involved in a serious crash than adult drivers aged 25 to 59 [1].

How much does car insurance cost for under 25s?

Recent data from Canstar show that younger drivers on average pay more in comprehensive premiums than older drivers with the under 25s paying the highest amount in premiums.

State Female under 25 (average premium) Male under 25 (average premium)
New South Wales $2254 $2505
Queensland $1537 $1724
South Australia $1578 $1780
Tasmania $1444 $1627
Victoria $2248 $2504
Western Australia $1409 $1583

*Figures based on data from Canstar from August 2021. [2]

The average gap between females under 25 and males under 25 is $167 in annual premiums, with males paying more on average.

At what age does car insurance go down?

This is a tricky one because while younger drivers might be seen as high risk, getting older doesn’t naturally take risks down. What really matters is proving you have experience as an insured driver and have avoided any at-fault claims.

This is measured by insurers in your No-Claim Discount (NCD). Your NCD is a discount offered to you on your insurance, which improves (up to a limit) for every year you go without making an at-fault claim. This is also known as a no-claim bonus.

The best thing you can do is try to develop a strong driving history. The longer you hold insurance without having an accident and making an at-fault claim, the faster your insurance discount will build up.

*Naturally, a lot of different variables (such as the value of your car, your driving habits, traffic offences, and residence) can also influence the cost of your insurance.

How to save on car insurance for drivers under 25

If you’re looking to save on car insurance, you can:

  • Develop a strong history –The longer you drive with insurance without making any claims, the better your NCD will be.
  • Pay attention to your excess – Certain policies require you to pay a driver-age excess if you’re under 25 and cause a car accident.
  • Reduce your risks to insurers – Parking your car in a garage can help reduce your risk to insurers. Make sure this is accurately reflected in your policy too!
  • Find an insurer that offers discounts – With Budget Direct, you can receive 15%^ off on your first year’s premium for a new policy purchased online.


[1] Queensland Government, 2021, Young drivers.

[2] Canstar, 2021, How much does car insurance cost?