What types of car insurance for under 25s are available in Australia?
There are four main types of car insurance in Australia:
1. Third party property damage insurance
Third party property damage insurance covers damage to other people’s vehicles or property. It does not cover damage to your own vehicle. It’s the most basic and generally cheapest form of optional cover.
2. Third party fire and theft insurance
Third party fire and theft covers damage to another driver’s car or property, as well as providing cover for your own vehicle if it’s damaged by fire or stolen.
3. Comprehensive insurance
Comprehensive car insurance provides the highest level of optional coverage and covers your vehicle in a wider range of situations like accidents, fires, floods, hail and storm damage, and theft. It also provides protection for damage to other driver’s cars and property. It’s generally the most expensive form of optional cover.
You can compare a range of comprehensive car insurance policies for under 25s from our Online Partners using the table above.
4. Compulsory Third Party (CTP) insurance
CTP insurance covers the cost of compensation claims if you harm or fatally injure someone in an accident. You’re legally required to have CTP insurance, regardless of which state or territory you live in. It’s included in the cost of your car registration, except in New South Wales where you have to purchase it separately. CTP is also referred to as Green Slip insurance in NSW and Motor Accident Insurance in the ACT.
What’s the best car insurance for under 25s?
There isn’t a single car insurance policy that’s best for every young driver. The right option will depend on factors such as your age, driving history, vehicle type, budget, and the level of cover you need. For example, you may find that comprehensive cover is what you need for a brand new car, especially if you’re an inexperienced driver still unsure on the road. If your car is a bit older, not worth a whole lot, or you could afford to replace it, you may instead opt for a third party policy.
One way to narrow your options is to look for policies recognised through independent research. Canstar’s Car Insurance Star Ratings and Awards identify policies that have demonstrated outstanding value based on a combination of price and features.
Canstar’s 2026 Outstanding Value Car Insurance Award winners
AAMI – National Outstanding Value Car Insurance Award.
Bingle – National Outstanding Value Car Insurance Award.
ROLLiN’ – National Outstanding Value Car Insurance Award, with Canstar’s research highlighting its value-for-money proposition for younger drivers. It currently doesn’t charge an additional excess for a listed driver who’s under the age of 25.
To find the best car insurance for your needs, think about:
It’s important to check a policy’s Product Disclosure Statement (PDS) to see what is and isn’t covered.
Why is car insurance more expensive for under 25s?
The younger you are, the more expensive your car insurance will generally be. This is because insurers price their policies based on perceived risk. Insurers usually believe that younger, less experienced drivers are more likely to make a claim than older, experienced drivers. They’ll generally reflect this in the premiums they offer you. For example, data from Canstar Research shows that under-25 year old men pay $1,707 more than 50+ year old drivers for their annual premiums on average. Young men also typically pay more than young women, with Canstar’s data showing they pay $325 more per year on average than women in the same age range.
How is the cost of car insurance for young drivers calculated?
There are several factors that insurers take into account when determining the cost of car insurance for young drivers:
- Your age and gender
- Your address (including the state or territory you live in)
- Where you park your vehicle during the day and at night
- How far, how often, and during which times of the day you drive your car
- The make, model, age, and condition of your car (including its market value)
- If your car has any modifications
- The level of cover you choose
- Your driving and claims history
- If you use your car for business like being a rideshare or food delivery driver
- The optional extras you choose to add to your policy
How much does family car insurance cost?
Canstar Research suggests that it’s generally cheaper to get a comprehensive family policy with cover for a driver under 25 than for a parent and an under-25 year old to buy their own individual policies.
The exact amount you would be charged on a family or standalone under 25s policy will vary based on the provider and policy you choose, as well as your personal circumstances. Check with your provider to see whether any conditions apply and how they could impact the cost or cover of your parents’ policy.
Another option for a family looking for a potentially cost-effective and convenient way to insure more than one vehicle is through a multi-car policy or multi-policy discount.
How to save on the cost of car insurance for under 25s
If you’re looking to cut down on your premium, you may be able to reduce it by:
- Comparing your options with Canstar using the comparison table above. 5-Star Rated policies are ones that were found to offer customers outstanding value.
- Buying your policy online, as some providers offer discounts when doing so.
- Paying your premiums annually rather than in monthly instalments.
- Checking for discounts like no-claim bonuses or safe driver discounts, which reward you for not making claims.
- Thinking about how far you drive each year, as you may be eligible for a discounted low kilometre or pay as you drive policy.
- If you have multiple insurance policies, you may be able to bundle them together with the same provider to receive a multi-policy discount.
- Parking your car in a secure location like a garage during the day and at night, rather than on the street.
- Increasing your car insurance excess. Keep in mind that you would have to contribute this higher excess amount when making a claim.
- Insuring your vehicle for its market value rather than an agreed value.
- Choosing your optional extras carefully, as you might want to look at how much it would cost to buy the add-on coverage separately rather than as part of your policy.
- Avoiding modifying your car, particularly with modifications that change the look or performance of your vehicle.
