Soaring car costs mean more young drivers crash, study suggests

Risk of accident appears to increase as young drivers spend more time away from the wheel after passing their test

The government’s changes to policies affecting drivers have cost British motorists an estimated £7.8bn (iStock)

The soaring cost of car insurance and other motoring bills means new drivers are spending too long away from the road after passing their test, according to a new study that attributes a large number of younger motorists’ accidents to a lack of recent experience.

More than a quarter of young drivers believe they have had an accident as a direct result of spending a significant time away from the wheel after passing their driving test.

And more than a quarter of drivers under the age of 30 have spent six months or longer without driving after initially passing their test, according to insurer Marmalade, leading to a higher risk of accidents.

The poll suggests that the time spent away from the road is having an adverse effect on young drivers’ confidence and abilities on the road. Nearly a quarter said their confidence had been knocked as a result of time away from the wheel, while the same proportion thought they had become a more hesitant driver.

In fact, one in every 20 went as far as saying they were more dangerous on the roads as a result of their break from driving.

The cost of purchasing a car, insurance, maintenance and other bills were regularly cited as a major factor in that break.

Separate figures from Compare The Market suggest just under half of people aged between 17-24 who have a driving licence, but don’t own a car, say it is because they can’t afford the upkeep, fuel and rising insurance costs. The comparison site calculates the average insurance premiums alone for a driver under the age of 24 now run to £1,281 a year.

“There is a clear – and worrying – correlation between young drivers taking an extended break from the road and the likelihood of having an accident,” says Crispin Moger, chief executive of Marmalade.

“With more than a third of young drivers citing cost as the main reason for time off the road, insurance providers have a clear responsibility to help more young people get behind the wheel after their test.

“This time is crucial for developing their confidence and ability, which ensures the safety of themselves and other road users.”

Peter Rodger, head of driver advice for IAM RoadSmart, added: “It’s only through regular exposure to different road types, traffic volumes and weather conditions that young drivers learn how their car responds and their own capabilities behind the wheel. Getting this practice early on is key to becoming a better driver and really does save lives”.

But the price of driving is continuing to climb, especially when it comes to insuring a vehicle.

Overall, the cost of car insurance has risen dramatically in the past five years. In 2014, the average car insurance policy for any age group stood at £551. But 2018 it had risen to £735.

The government’s changes to policies affecting drivers have cost British motorists an estimated £7.8bn, according to recent estimates from Compare The Market.

Insurance premium tax (IPT) is levied on general insurance policies and is charged to the insurer. However, the cost is then factored into the policy which people are quoted, effectively being passed on to drivers. The tax stood at 6 per cent until 2015 when the government steadily increased it over the following years to its current level of 12 per cent. These tax rises alone have added £118 to policies.

At the same time, the personal injury discount rate, otherwise known as the “Ogden” rate, is the metric used to calculate large insurance payouts in the event of life-changing motoring injuries. The rate affects the level of money that insurers have to hold to fund these payouts.

The change of the rate from 2.5 per cent to minus 0.75 per cent meant that insurers needed to hold more money for payouts, so they in turn have charged more for insurance policies. Industry estimates suggest that the annual increase to premiums would be £45 per policy per year or £90 since the change was introduced in March 2017.

Dan Hutson, head of motor insurance at Compare The Market, said: “These figures demonstrate the direct impact that government changes have had on the financial health of British motorists. The changes to IPT and the Ogden rate have punished those who can afford it the least – the young – many of which need a car to get to their jobs.

“There is little doubt that the IPT rises were seen as an easy way to raise money from British taxpayers, having doubled the tax take from £3bn in 2014-2015 to £6.2bn in 2018-2019, but the impact will have been felt by ordinary people who rely on their car.

“For a long time now, we have been calling for the government to reform insurance premium tax, particularly for young people who faced the largest hikes despite being able to afford it the least. The government should scrap IPT for young drivers which would help ease the financial burden of car ownership.”