Drivers born after 2001 are facing a £2,500 annual bill to stay on the road, as soaring fuel prices keep costs high. According to figures from Compare the Market, the cost of driving for those aged under 25 – including car insurance, fuel, road tax, and an MOT – reached £2,539 in April 2026.
Insurance premiums fall but fuel costs rise
Data shows that car insurance premiums for under-25s have dropped by 7% to £1,308, marking the second consecutive year of decline. The average annual premium has fallen by £735 since 2024. However, the study reveals that the annual cost of filling a tank has increased by 18% to £981.
Sam Wilson, an expert at Compare the Market, noted that with premiums trending downward over the last two years, now is a good opportunity for under-25s to compare policies before renewing. He added: “They may be able to secure a better value premium and potentially help reduce cost pressures. Shopping around can often uncover more competitive deals, while telematics policies offer an additional route to savings by rewarding safe, responsible driving.”
Tips for young drivers to save money
Amy Rootham, car insurance expert at Compare the Market, commented: “While it’s encouraging to see average premiums fall for newly qualified drivers, insurance is still a major part of the first-year budget. The car you choose can make a real difference. Opting for a smaller engine or a vehicle in a lower insurance group can help keep costs down. Telematics or ‘black box’ insurance policies can also be a good option for young or new drivers, as they’re often more affordable and can encourage and reward safer driving. Considering these things whilst shopping around can help you find a good deal within your budget.”
The survey also found that just over a quarter (27%) of respondents said concerns about costs limited the distance they would drive during their first year on the road.
