# Car Insurance Costs Under 25: What to Compare Before You Buy

> Compare car insurance quotes under 25: what CTP and each level of cover pay for, why the excess matters as much as the price and how to fit the premium into each pay.

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- Author: Marnix
- Published: 2026-10-03



You've found a car you can afford, or you're about to take over the family hatchback, and every quote form wants your date of birth. The prices that come back can be a long way apart, and some will be more than you'd guessed.

The gap isn't always what it looks like. Two quotes can cover different things or ask very different amounts from you on the day you claim, so matching them first makes the prices comparable.

## What your rego already covers

Every registered car has compulsory third party insurance, or CTP. It pays for injuries your car causes to people. It doesn't pay to fix anyone's car or property, including yours, which is why optional car insurance sits alongside it.

How you pay for CTP depends on your state. In some it's part of the registration bill and in others you buy it before you register. Either way, count it once in your budget with the rego, and keep it apart from the optional cover you're comparing.

- **NSW:** you buy CTP, called a [Green Slip](https://www.sira.nsw.gov.au/motor/compulsory-third-party-motor-vehicle-insurance-green-slips), before you can register the car. It covers injuries, not repairs to vehicles or property.
- **Victoria:** your registration includes the [transport accident charge](https://www.tac.vic.gov.au/about-the-tac/our-organisation/transport-accident-charge), which pays for the state's injury cover through the Transport Accident Commission.
- **Queensland:** CTP is [paid with your registration](https://maic.qld.gov.au/about-us/faqs/). Within each type of vehicle, the CTP premium is the same whatever the owner's age or driving history.

In other states and territories, your registration authority explains how CTP is paid there.

## Choose how much of your own car to cover

Optional car insurance comes in three main levels. What separates them is how much of your own car they pay for.

| What it pays for | Third party property | Third party, fire and theft | Comprehensive |
| --- | --- | --- | --- |
| Other people's cars and property | Yes | Yes | Yes |
| Your car, if it's stolen or burnt | No | Yes | Yes |
| Your car, in hail or a storm | No | No | Yes |
| Your car, after a crash you cause | No | No | Yes |

Third party property is a useful minimum. Your car might be cheap, but the one you run into might not be, and without cover that repair bill is yours. Going further depends on whether you could replace your car or manage without it. If it's on a car loan, the lender can insist on comprehensive cover.

Comprehensive policies also set what you'd get if the car is written off or stolen. An **agreed value** is an amount you settle with the insurer; it costs more and can drop at each renewal, so check it every year. A **market value** is what the insurer works out the car would have sold for at the time, which isn't the price you'd hoped to get for it. Either way, it's worth asking what comes off a payout, such as the excess.

## Why the quote is higher under 25

The premium is the price of the policy, quoted for a year or by the month. Insurers set it from the car and its value, who drives it and how far, where it's kept overnight and the cover you choose. Most charge drivers under 25 more, because younger drivers as a group have more accidents.

Your age is the one input you can't change, and there's no standard under-25 price to measure a quote against. The useful number is a quote for your own car, address and driving.

Age also shows up in the **excess**, the amount you pay towards a claim before the insurer covers the rest. Young drivers may pay an age excess on top of the standard one, which can make the total on a claim much higher than the excess you see first.

## Compare the price and the excess together

A higher excess usually brings the premium down, so a quote can look cheaper by asking more of you later. That's only a saving if you could find the excess on the day you need it.

Meet Priya, a made-up 21-year-old insuring a used hatchback. Her two comprehensive quotes cover the same car, address and drivers. Each adds an age excess to the standard one, so the totals she'd pay on a claim differ more than the prices do.

| Priya's quote (AUD) | Total excess | A year with no claim | A year with one claim she causes |
| --- | ---: | ---: | ---: |
| Quote A | $1,000 | $2,100 | $3,100 |
| Quote B | $1,800 | $1,800 | $3,600 |

Same car, cover and drivers in both quotes. Made-up amounts, not typical prices.

Quote B saves Priya $300 in a year without a claim. The first crash she causes wipes that out and costs her $500 more than Quote A would have.

An excess you could pay is a useful starting point for comparing premiums. Priya has $400 put aside and is adding to it, so $1,000 is within reach and $1,800 isn't. Money for an excess does the same job as an [emergency fund](/blog/emergency-fund): it sits within reach for when something goes wrong.

## Make the quotes match before you compare

Two quotes are only comparable when the details behind them match. Before putting them side by side, check that they have:

- The same car, address, overnight parking and kilometres a year.
- The same drivers, with their ages and licences.
- The same level of cover and the same agreed or market value.

Then note what each one asks of you:

- The total excess on one claim, including any age excess.
- The yearly price and, if you'd pay monthly, the instalments added up.
- What's excluded and any discount that ends after the first year.

The exclusions and every excess are set out in the policy's product disclosure statement, or PDS, and sometimes in a separate guide to its premiums and excesses. Comparison websites help with a shortlist, but they're [usually paid by the insurers they list](https://moneysmart.gov.au/car-insurance/how-to-save-money-on-car-insurance) and don't include every policy, so it's worth getting a quote or two directly as well. Answer every question accurately, including who drives the car most, because an insurer can refuse a claim when the details were wrong.

## Turn the price into an amount from each pay

Paying monthly spreads the cost, but with many insurers it [adds 10 to 20% over a year](https://www.asic.gov.au/about-asic/news-centre/find-a-media-release/2026-releases/26-189mr-consumers-left-in-the-dark-about-rising-car-insurance-premiums-asic-warns). Twelve instalments of $195 would cost Priya $2,340, which is $240 more than paying Quote A in one go.

If the full amount isn't there this year, paying monthly keeps the car insured, and that matters more than the saving. Clova, our budgeting app, keeps upcoming bills beside your pay, so each instalment shows up against the pay that has to cover it.

For the next renewal, putting a share of the premium aside from each pay lets you pay the cheaper way. Our guide to [sinking funds](/blog/sinking-funds) shows how to build up to a yearly bill.

> Try it yourself in the [bill converter](/tools/yearly-bill-converter). Enter the yearly price from your quote and how often you're paid. Example: Priya's Quote A of $2,100, once a year, paid fortnightly: set aside $80.77 each payday, over the 26 fortnightly pays before the next renewal.

The excess needs money of its own. A renewal fund is still small a few months in, which is exactly when a crash could happen. In Clova, the excess can be a savings goal of its own, kept apart from what each pay sets aside for the premium.

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## Check the price again when things change

A renewal notice is a good moment to compare again. Of people who [contacted their insurer before renewing](https://www.asic.gov.au/about-asic/news-centre/find-a-media-release/2026-releases/26-189mr-consumers-left-in-the-dark-about-rising-car-insurance-premiums-asic-warns), about three in ten got a lower premium without changing their cover.

Tell your insurer when life changes too: a new address, someone else driving regularly or using the car for work. If you're [moving out of home](/blog/moving-out-of-home), the new address and parking go on the policy, and the price can change with them.

Turning 25 may bring the price down one day. Until then, a quote you've checked line by line and an excess you can cover are worth more than the lowest number on a list.

## A note from us

A car is easier to afford when you can see everything it costs, not only the renewal. Clova puts each purchase in a category, so fuel, rego, servicing and insurance add up to what the car really costs you.

## Common questions

### Will my car insurance get cheaper when I turn 25?

Not automatically. Each insurer sets its own age rules, so a birthday doesn't guarantee a lower premium or the end of an age excess. Ask your insurer how age affects your policy, and get fresh quotes at the first renewal after you turn 25.

### Can my friends drive my car?

Check the policy first. Some policies don't cover drivers under a certain age, and some add an excess when the driver is young, inexperienced or not listed. Anyone who'll drive the car regularly belongs on the policy.

### Can I get a discount through my parents' insurer?

Possibly. Some insurers offer a family discount to drivers under 25 whose parents are insured with them. Ask about it when you quote, on a policy that lists who really drives the car.

### Do I pay the excess if the crash wasn't my fault?

Usually not, if the other driver can be identified. Policies differ on what they need from you, such as the other driver's name and registration, and some charge the excess anyway, so check this before you buy.

## Sources

1. [Choosing car insurance](https://moneysmart.gov.au/car-insurance/choosing-car-insurance) · ASIC Moneysmart
2. [How to save money on car insurance](https://moneysmart.gov.au/car-insurance/how-to-save-money-on-car-insurance) · ASIC Moneysmart
3. [Car insurance](https://adfconsumer.gov.au/car-insurance/) · ADF Financial Services Consumer Centre
4. [26-189MR Consumers left in the dark about rising car insurance premiums](https://www.asic.gov.au/about-asic/news-centre/find-a-media-release/2026-releases/26-189mr-consumers-left-in-the-dark-about-rising-car-insurance-premiums-asic-warns) · ASIC
5. [Compulsory third party insurance (Green Slips)](https://www.sira.nsw.gov.au/motor/compulsory-third-party-motor-vehicle-insurance-green-slips) · State Insurance Regulatory Authority NSW
6. [Transport accident charge](https://www.tac.vic.gov.au/about-the-tac/our-organisation/transport-accident-charge) · Transport Accident Commission
7. [Frequently asked questions](https://maic.qld.gov.au/about-us/faqs/) · Motor Accident Insurance Commission Queensland
8. [CTP competitive premiums FAQs](https://maic.qld.gov.au/wp-content/uploads/CTP-competitive-premiums-FAQs.pdf) · Motor Accident Insurance Commission Queensland

## Related reading

- [Sinking funds: how to save for the bills that come once a year](https://getclova.com/blog/sinking-funds)
- [Emergency funds: how much you need and how to start one](https://getclova.com/blog/emergency-fund)
- [Travel Insurance Explained Before Your First Overseas Trip](https://getclova.com/blog/travel-insurance-explained)

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This guide explains a budgeting method in general terms; it doesn't consider your circumstances.