News
Rising prices seeing young drivers “squeezed out of the car market”
An Auto Trader analysis finds that lack of affordable car options, plus the rising cost of insurance, is making motoring increasingly unaffordable for young drivers
Words by: Mark Nichol
Published on 12 June 2024 | 0 min read
Young drivers are being squeezed out of the car market by a lack of affordable options, plus the rising cost of insurance. That’s according to an analysis by Auto Trader, which has found that car options below £5,000 have slumped by 75 percent since 2015.
On top of that, annual insurance policies for 17-year-olds have risen by 67 percent, and 40 percent for 18-year-olds, according to MoneySuperMarket data. As such, more and more young drivers are simply unable to climb onto the motoring ladder; the average cost for the first 12 months of motoring for a 17-20-year-old is now £7,600. The gap between the pool of younger drivers with licenses and the availability of ‘cheap’ cars is significant. More than 700,000 17-20-year-olds currently hold a full driving license in the UK, but in the eight years between January 2016 and 2024, only 24,359 cars under £5000 were available. That number jumps to 263,746 for cars less than £11,000 during the same period - but it still demonstrates a relative lack of affordable options. Switching to an electric vehicle is even more prohibitive, with the average used price of an EV just below £21,000 in April 2024, compared to around £17,000 across the wider car market. Young drivers are generally more interested in switching to electric though, with 63 percent of 17-24-year-olds saying they’d consider the switch for their next car. That’s in contrast to 37 percent for drivers aged 45 or over. Auto Trader Editorial Director Erin Baker said: “Car ownership and usage is vital to young people, but cost remains a clear barrier. They also show higher levels of interest in electric cars - but are less likely to be able to afford them, thanks to stock shortages caused by Covid. Those dynamics are only likely to be addressed over time.” Drivers can lower their insurance costs by shopping smart when it comes to renewal. “It’s more important than ever to compare policies and shop around for the best deal, “ said Sara Newell, Director of Insurance at MoneySuperMarket. “Black box policies with telemetry can help reduce the bill, and increasing the policy excess can help to bring the overall cost down. Just check that you would be able to pay for the excess if you do need to make a claim." Click here to see our Top 10 Cheapest Cars To Insure
On top of that, annual insurance policies for 17-year-olds have risen by 67 percent, and 40 percent for 18-year-olds, according to MoneySuperMarket data. As such, more and more young drivers are simply unable to climb onto the motoring ladder; the average cost for the first 12 months of motoring for a 17-20-year-old is now £7,600. The gap between the pool of younger drivers with licenses and the availability of ‘cheap’ cars is significant. More than 700,000 17-20-year-olds currently hold a full driving license in the UK, but in the eight years between January 2016 and 2024, only 24,359 cars under £5000 were available. That number jumps to 263,746 for cars less than £11,000 during the same period - but it still demonstrates a relative lack of affordable options. Switching to an electric vehicle is even more prohibitive, with the average used price of an EV just below £21,000 in April 2024, compared to around £17,000 across the wider car market. Young drivers are generally more interested in switching to electric though, with 63 percent of 17-24-year-olds saying they’d consider the switch for their next car. That’s in contrast to 37 percent for drivers aged 45 or over. Auto Trader Editorial Director Erin Baker said: “Car ownership and usage is vital to young people, but cost remains a clear barrier. They also show higher levels of interest in electric cars - but are less likely to be able to afford them, thanks to stock shortages caused by Covid. Those dynamics are only likely to be addressed over time.” Drivers can lower their insurance costs by shopping smart when it comes to renewal. “It’s more important than ever to compare policies and shop around for the best deal, “ said Sara Newell, Director of Insurance at MoneySuperMarket. “Black box policies with telemetry can help reduce the bill, and increasing the policy excess can help to bring the overall cost down. Just check that you would be able to pay for the excess if you do need to make a claim." Click here to see our Top 10 Cheapest Cars To Insure