Car insurance for under 25s

So, you’ve passed your test (nice one!), got your Ps, and maybe even picked up your first set of wheels. Whether it’s a hand-me-down family sedan or a zippy little hatchback, there’s one not-so-fun-but-totally-necessary thing you need to sort out: car insurance.

If you're under 25, you're probably already hearing that car insurance can be pricey, confusing, and a bit of a headache to navigate. But don’t worry - we’re here to help it make a bit more sense (and maybe even save you a few bucks).

How is the cost of insurance calculated?

Here’s the deal: your premium is calculated based on a number of criteria, such as:

• the cover you choose;
• the type of car you own;
• where you park your car overnight;
• your car’s accessories or accepted modifications; and
• factors relating to the drivers of your car, such as their age and driving history.

We also look at the value of your car, and other factors that increase or decrease the risk of claim. Your premium will also include amounts covering government charges, taxes or levies we are responsible for, such as GST and Stamp Duty. This information will be shown on your Certificate of Insurance. 

What is a young driver age excess?

​​​Ever heard of the young driver age excess? Pretty much this means if you’re under 25, some insurers may charge an additional excess on top of your standard excess if you need to make a claim. ahm Car Insurance includes two types of excesses that may apply depending on the driver’s age:

• Age excess: This applies if the driver is under 25 and has been declared as a driver on your Certificate of Insurance. This excess is $800 for drivers aged 21 to 24, and $1,200 for drivers under 21. This excess does not apply to a learner driver.
• Undeclared young driver excess: This applies if a driver is under 25 and has not been declared as a driver on your Certificate of Insurance. This excess is $1,600 for drivers aged 21 to 24, and $2,000 for drivers under 21. This excess does not apply to a learner driver.

What types of car insurance are there?

Before you start shopping around, here’s a quick rundown of the different ahm car insurance cover options you can chose from:

1. Third-Party Property Damage Cover

• Covers damage to other people’s cars and property.
• Cheapest option but doesn’t cover damage to your own car.
• For an additional premium this can be extended to cover your car for Fire and Theft/Attempted Theft, for the car’s market value up to $10,000.

2. Comprehensive Cover 

• Protection for your car, damage to other people’s car or property, fire, theft, and more.
• Pay As You Drive cover^ option if you’re driving l​​​​ess than 15,000kms a year.

​​​​​Some ways you could look to save on your car insurance

Now for the good stuff - how to help keep your premium from eating your entire pay cheque:

• Choose a “lower-risk” car - Smaller engines, lower value, no modifications usually mean a smaller premium. Your turbo dream Ute might have to wait.
• Opt for a higher excess - Choosing to pay a higher excess (the amount you pay if you make a claim) can help to lower your premium: but choose thoughtfully, as this will impact you at claim time.
• Pay As You Drive Cover option - If you plan to drive​​​​ less than 15,000 km a year, ahm Pay As You Drive cover^ could save you up to 30% compared to our ahm’s unlimited KM comprehensive cover.
• Add a parent as a listed driver - Having an older, experienced driver listed on your policy may help bring the price down. Just make sure you’re still the main driver (using the car the most).
• Health member discount - If you're with ahm or Medibank health insurance you enjoy 10% off* your car insurance premium every year - winning.

Now that you know a bit more about the ins and outs of under 25s car insurance, check out your options with ahm car insurance by getting a ​​quick quote online(opens in a new tab).

You should carefully read the relevant combined ​​Product Disclosure Statement and Financial Services Guide and consider the ​​Target Market Determination to help you decide if the product is right for you.