Car Insurance for Under 25s in Australia: How to Pay Less in 2026

Car insurance for drivers under 25 is genuinely expensive in Australia — and the high premiums are not arbitrary. Drivers aged 17–24 represent 13% of licensed Australians but account for 26% of at-fault crashes according to the Insurance Council of Australia. That claims data feeds directly into every premium. You cannot change your age, but you can make choices that reduce what you pay by 30–40%.

How Much Does Car Insurance Cost for Under 25s in 2026?

According to CHOICE research based on 29,548 quotes collected July 2026, the average comprehensive car insurance premium for drivers aged 25 and under is:

Group	Average Annual Premium
Males under 25 (national average)	$3,197
Females under 25 (national average)	$2,673
Age 25 drivers	$2,337
Age 30–49 (for comparison)	$1,607

Average Premiums by State for Under 25s (CHOICE, July 2026)

State	Average Premium (under 25)
Victoria	$4,070
Western Australia	$2,668
South Australia	$2,612
Queensland	$2,554
ACT	$2,161
Tasmania	$2,088

Victorian young drivers pay $1,000–$2,000 more per year than equivalent drivers in other states — the highest in Australia — due to higher traffic density and claims frequency in metropolitan Melbourne.

Finder data from March 2026 shows young Australians report paying an average of $183 per month ($2,196/year) for comprehensive car insurance — though this is self-reported and likely understates actual costs for higher-risk profiles.

The Young Driver Excess: What Most People Miss

On top of your standard excess, most Australian insurers add a separate young driver excess for any claim where the driver is under 25. This applies even if you were not at fault. Common young driver excesses:

• AAMI: $800 young driver excess
• Budget Direct: $500 young driver excess
• NRMA: $600–$900 depending on age bracket
• Allianz: $600 young driver excess

On a $3,000 repair bill with a $750 standard excess plus an $800 young driver excess, your out-of-pocket cost is $1,550. This is worth understanding before you decide whether to claim for minor damage.

Cheapest Car Insurance for Under 25s in 2026

Based on multiple sources including Finder 2026 Awards research, CHOICE July 2026 data, and Mozo Experts Choice Awards 2026, the most consistently affordable insurers for young Australian drivers are:

Budget Direct — Consistently Cheapest

Budget Direct wins Finder's Car Insurance Award for cheapest comprehensive cover and is recognised as the most affordable option for young drivers across multiple comparison platforms. Budget Direct also charges a lower young driver excess ($500) than most competitors. Available online only — buy direct for up to 30% off. Not available in NT and some regional postcodes.

Bingle — Best for Low-Risk Young Drivers

Bingle is an online-only, no-frills insurer that consistently appears as one of the cheapest comprehensive options for under-25s with clean records. Bingle does not have a physical branch network — all claims are handled online and by phone. Suits young drivers with a clean record and a lower-value vehicle.

ROLLiN' Insurance — Best for Safe Drivers

ROLLiN' is a telematics-based insurer that tracks driving behaviour through its Safe 'n Save app and adjusts premiums based on your actual driving. Importantly, ROLLiN' does not charge a young driver age excess — which can save $500–$900 on a claim compared to standard insurers. For young drivers who are genuinely careful, the combination of no age excess and potential premium discounts makes ROLLiN' worth serious consideration.

AAMI — Best Customer Service for Young Drivers

AAMI consistently rates well for customer satisfaction and claims handling, and is one of the more accessible insurers for young drivers with comprehensive policies. Premiums are not always the cheapest, but AAMI's claims process is straightforward and well-reviewed.

Coles Insurance — Worth Comparing

Coles Insurance (underwritten by Hollard) appears in Finder's 2026 research as a competitive option for younger drivers. Available online, and Coles Flybuys members may receive additional value through points on premiums.

How to Reduce Your Car Insurance Premium as a Young Driver

1. Compare Quotes Every Year — Non-Negotiable

The gap between the cheapest and most expensive insurer for a young driver profile can be $800–$1,500 per year. Use Finder, Canstar or Compare the Market to compare at least five quotes before renewing. Never auto-renew without checking the market — insurers count on inertia.

2. Choose Your Car Carefully

The vehicle you drive is one of the biggest factors in your premium. Insurers consider:

• Repair costs: European vehicles, performance cars and anything with expensive parts cost more to insure
• Theft appeal: High-theft models attract loading — check the ANCAP stolen vehicle data
• Safety rating: Higher ANCAP safety ratings typically attract lower premiums
• Engine size: Performance or turbo engines signal higher risk to insurers

The cheapest cars to insure as a young driver are typically mainstream Japanese models — Toyota Yaris, Mazda 2, Honda Jazz, Hyundai i30 — in standard (non-performance) variants with high ANCAP safety ratings.

3. Increase Your Excess

Choosing a higher standard excess reduces your premium. Increasing from $750 to $1,500 typically saves $150–$400/year. Only do this if you genuinely have savings to cover the higher excess if you need to claim. Never increase your excess beyond what you could afford to pay tomorrow.

4. Garage Your Vehicle

Storing your car in a locked garage reduces your premium by 5–15% compared to street parking. Update your insurer if your parking situation changes — this is a free change to your policy that immediately reduces your premium.

5. Consider Third Party Instead of Comprehensive for Older Cars

If your car is worth under $5,000–$8,000, comprehensive insurance may not be worth it. A $3,500 car insured comprehensively for $2,000/year means you're paying 57% of the car's value annually for cover. Third Party Property insurance ($400–$600/year) protects you from your biggest financial liability — damage to other people's property — at a fraction of the cost.

6. Pay Annually

Monthly instalment fees add 10–15% to your annual premium. Paying upfront saves $200–$400/year on a typical young driver policy.

7. Complete a Defensive Driving Course

Some insurers — including AAMI and Youi — offer premium discounts for completing an approved defensive driving course. The NRMA Driver Training and the RACV Safe Driving Course are among the recognised options. Even where an insurer doesn't formally offer a discount, completing a course improves your actual driving record, which flows into lower premiums as you age and build a claims-free history.

8. Consider Being a Named Driver on a Parent's Policy

For young drivers who only use a car occasionally, being listed as a named driver on a parent's policy can be significantly cheaper than holding your own policy. The trade-off: you can only drive that specific vehicle, and any claims may affect your parent's no-claims discount. This only works for genuine occasional use — not as a primary driver.

What Happens to Your Premium Each Year?

Car insurance for young drivers typically drops significantly with each passing year as you build a claims-free record:

• Age 17–21: Highest premiums, limited options, high young driver excesses
• Age 21–24: Premiums begin to moderate with a clean record
• Age 25: Significant premium reduction — the CHOICE data shows average drops from $3,197 (under 25) to $2,337 at exactly age 25
• Age 30+: Premiums typically fall to $1,500–$1,800 for a similar driver profile

Each at-fault claim can reset this trajectory by 3–5 years of premium increases. This is why understanding your young driver excess before making a claim is important — small claims are often worth paying out of pocket to protect your no-claims record.

Is Comprehensive Worth It for Young Drivers?

The answer depends on your vehicle's value and your financial situation:

• Car worth over $15,000: Comprehensive is almost always worth it
• Car worth $8,000–$15,000: Compare the premium to the car's value — if annual comprehensive premium exceeds 15% of car value, consider whether the maths works
• Car worth under $8,000: Third Party Property or Third Party Fire and Theft is often more economical

For more on car insurance costs and how to reduce them at any age, see our complete guide to car insurance costs in Australia and our guide to reducing your car insurance premium.