Cover costs fall for young drivers but monthly mark-ups still biting

Young motorists have seen the cost of their cover fall by a dramatic one third over the past two years, but many are still being “penalised” by the increased cost of monthly payments.

This is according to research from comparison site Quotezone, which revealed that average car insurance premiums paid by drivers aged 17 to 24 have fallen from £1,909 in Q1 2024 to just £1,238 in Q1 2026.

However, those paying in monthly instalments – a meaningful proportion of the cash-strapped age group – have seen the equivalent annual cost of cover fall from £2,152 to £1,363 in the same time period, a mark-up of approximately 10%.

Quotezone said that while FCA work to reduce the financial impact of premium finance “went some way to redressing the balance” of paying monthly, more work was needed to educate policyholders on just how much more they were paying than in annual plans.

Indeed, a recent survey from the firm found that just 35% of respondents were able to correctly identify the 10% mark-up of monthly payments.

Missed savings

Greg Wilson, chief executive at Quotezone, said: “It’s important insurers are completely transparent about how much customers are paying, whether that’s for annual or monthly payments.

”It’s good news that prices for spreading out that cost are coming down and for some age groups – particularly those in the 17 to 24 years age bracket – the cost difference is significant.”

He continued: “It’s crucial for both insurers and price comparison sites to have a clear, simple process and explain terms succinctly – so drivers, regardless of age or motoring experience, understand exactly what is being asked and why.

“There are always savings to be had when taking out car insurance, and sometimes it’s the basics that offer the most potential, such as always double checking the form before submitting. Errors on seemingly minor things like marital status and job title could lead to missed savings.”