Young Driver Car Insurance NZ 2026: Lower Premiums Survival Guide
If you're under 25 and trying to get car insurance in New Zealand, you've probably already had the "ouch" moment. Premiums feel high, the wording feels confusing, and everyone seems to have an opinion on what you should buy.
This guide is here to make the process simple. No jargon. No scare tactics. Just clear advice based on real NZ data from the Quashed Index.
We'll break down:
• How much young drivers really pay
• Why insurers charge more
• Which type of cover actually makes sense
• Practical ways to cut costs (without cutting protection)
• How to use Quashed Market Scan to avoid overpaying
By the end, you'll know exactly how to get car insurance that fits your car, your budget, and your life — without the guesswork.
How Much Does Car Insurance Cost for Young Kiwis?
Car insurance isn't cheap, and for young drivers, it's even tougher. While the average Kiwi pays around $1,298 for comprehensive cover, drivers under 25 consistently face much higher premiums.
That's because insurers price younger drivers as higher risk. Here's how costs stack up for 18–24 vs 25–30-year-olds:
Average Comprehensive Premiums (18–24 vs 25–30)
Year | 18–24 | 25–30 |
Q4 2023 | $1,606 | $1,426 |
Q4 2024 | $1,667 | $1,392 |
Q4 2025 | $1,714 | $1,346 |
Average Third Party, Fire & Theft Premiums (18–24 vs 25–30)
Year | 18–24 | 25–30 |
Q4 2023 | $622 | $490 |
Q4 2024 | $603 | $467 |
Q4 2025 | $761 | $574 |
Key takeaway: Based on our data, under-25s pay around 20–30% more for car insurance on average, but depending on the car, suburb, licence type, and excess, some young drivers can face much higher premiums.
If you want to see what this looks like for your car and location, run a Market Scan — you'll get real quotes from NZ insurers instantly.
Why Do Young Drivers Pay More for Car Insurance?
Insurers don't charge higher premiums just because you're young — they charge more because the data shows younger drivers are statistically more likely to crash.
According to ACC and road safety data in NZ:
• 16–24-year-olds make up only 13% of licence holders but account for almost 30% of serious road injuries.
• The first 6–12 months on a restricted licence is the highest-risk period for any driver.
• Younger drivers lodge more claims on average, which pushes premiums up across the board.
In insurance terms, that makes under-25s a high-risk group, which is why you'll often see premiums that are higher than older drivers for the same car and suburb.
But the good news? There are ways to bring those premiums down — and the type of cover you choose (Comprehensive vs TPFT vs Third Party) makes a big difference.
Choosing the Right Cover for Young Drivers
When you're under 25, choosing the right type of car insurance matters just as much as finding a cheap price. Your cover type can be the difference between a manageable setback… or a bill big enough to wipe out your savings.
Here's how to decide what actually suits your car, your budget, and your risk level.
Comprehensive Insurance — Best for Cars Worth $5,000+
Comprehensive covers your car and the other person's car, no matter who caused the damage. For young drivers, this is usually the safest choice if your car is:
• newer
• worth more than $5,000–$7,000
• something you couldn't afford to replace if it were written off
Why younger drivers often need Comprehensive:
• You're statistically more likely to crash in your first few years of driving
• One accident could total your savings
• Comprehensive pays out for storms, theft, vandalism, fire, and at-fault crashes
Downside: It's the most expensive option — and for under-25s, sometimes very expensive.
But if losing your car tomorrow would leave you stranded, Comprehensive is worth the peace of mind.
Third Party, Fire & Theft (TPFT) — Best for Cars Worth $2,000–$7,000
TPFT is a popular choice with young drivers because it protects you from the big financial hits without paying full comprehensive prices.
TPFT covers:
• The damage you cause to other cars
• theft or attempted theft
• fire damage
But it won't cover repairs to your car if you crash.
Why TPFT works well for young drivers:
• Much cheaper than Comprehensive
• Still protects you from major losses (e.g., theft)
• Ideal for older or mid-value cars where a full payout isn't essential
Downside: If you crash and you're at fault, you'll be paying for your own repairs out of pocket.
Third Party Only — Cheapest, but High Risk
This is the "bare minimum" cover and only pays for damage you cause to others. It's usually suitable only for:
• very low-value cars (under ~$2,000)
• drivers who can afford to walk away from a total loss
• temporary cover while saving for better insurance
For most young drivers, Third Party Only is a last resort.
Quick Shortcut for Choosing the Right Cover
Car Value | Best Option | Why |
Under $2,000 | Third Party Only | The car isn't worth insuring for your own damage |
$2,000–$7,000 | TPFT | Balance of affordability + real protection |
$7,000+ | Comprehensive | One crash could wipe out your finances |
Not sure which option fits your situation? Run a Market Scan on Quashed to see how each cover type changes your price — live quotes, real numbers, no guesswork.
Understanding Your Excess (And How It Affects Your Premium)
Your excess is what you pay out of pocket when you make a claim. For young drivers, getting this number right can save hundreds per year — or cost you hundreds if something goes wrong.
How Your Excess Changes Your Premium
Excess Type | What It Means | Impact on Premium | Best For |
Low excess (e.g., $400–$600) | You pay less if you claim | Higher premium | Drivers who want predictable, smaller costs at claim time |
High excess (e.g., $1,000–$1,500) | You take on more of the risk | Lower premium | Drivers who want cheaper insurance and have savings to cover a big excess |
Extra Excesses for Under-25s
Most NZ insurers stack extra excesses for young drivers. In a claim, you may have to pay:
• Standard excess (e.g., $500)
• + Young driver excess (e.g., $750)
• + Unlisted driver excess (if you're not named on the policy)
A single accident can mean $1,000–$2,000+ out of pocket – even with insurance.
How to Pick the Right Excess
Ask yourself:
Could you pay this excess tomorrow? If you couldn't afford to pay $1,500 suddenly, don't choose $1500 excess.
How often do you drive? Daily commuters → safer with a lower excess. Occasional drivers → higher excess is usually fine.
Is your premium already high? Increasing the excess is an easy way to bring it down.
Which Insurers Actually Cover Young Drivers? (What You Need to Know)
Not all insurers treat young drivers the same — and some won't insure them at all.
Here's the short version:
• Only one insurer outright excludes under-21s: Cove.
• Most big brands (AA, AMI, Tower, State, Trade Me Insurance, AMP) do cover young drivers — but usually with higher premiums, higher excesses, and stricter listed-driver rules.
• Specialist insurers (Autosure, Provident, Protecta) often cover under-25s, but availability depends heavily on postcode, vehicle type, and licence class.
Cover options drop sharply for young drivers with:
• modified cars
• turbo/high-performance vehicles
• European makes (Audi, BMW, VW)
• very low-value cars (<$1,500)
• restricted licences or unlisted drivers
Because eligibility varies so widely, the easiest way to see who will cover you (and at what price) is to run a Market Scan — it compares live quotes from insurers that actually accept your age, car, and suburb.
Which Provider is Usually the Cheapest for Young Drivers? (Based on Quashed Scan Data)
Young drivers often ask which insurer is "cheapest" – and the truth is there's no single winner for everyone. Pricing changes based on your car, suburb, driving history, and even whether you park on the street or in a garage.
But based on a large sample of real quotes from our 2025 Market Scan, here's who most often came out cheapest for Comprehensive cover and Third Party, Fire & Theft cover amongst under-25 drivers:
Cheapest providers for Comprehensive cover
Rank | Provider | Share of Cheapest Quotes |
1. | AMP | > 24% |
2. | Trade Me Insurance | ~24% |
3. | Provident Insurance | ~19% |
4. | Tower | ~8% |
5. | Other (AMI, Cove, Autosure, AA, Assurant) | <5% each |
Cheapest providers for TPFT
Rank | Provider | Share of Cheapest Quotes |
1. | Autosure | ~52% |
2. | Trade Me Insurance | ~25% |
3. | AA Insurance | ~18% |
4. | AMP, Tower, AMI, Cove, Others | <5% each |
What This Means for Young Drivers
• No insurer is the cheapest for everyone. Your suburb, car type, excess, driving history, and sum insured all shift the pricing.
• Comprehensive and TPFT have completely different "cheapest" providers. Autosure dominates TPFT, while AMP / Trade Me Insurance lead for Comprehensive.
• Two identical drivers with different cars can get totally different results.
How to Find Who's Cheapest for You
Insurance pricing isn't one-size-fits-all — especially for young drivers. The cheapest insurer can change based on your suburb, excess, car type, age, and even the time of year, which means the provider that's cheapest for one Corolla or Prius driver might be nowhere near the cheapest for another.
If you want to understand what actually drives these price differences, our Ultimate Guide to Car Insurance in NZ is a great place to start — it breaks down how location, driver profile, vehicle age, claim history, and excess all influence your premium.
But the fastest way to get a real answer? Run a Market Scan. It compares live quotes from multiple NZ insurers in seconds.
How Young Drivers Can Lower Car Insurance Costs
Young Kiwis pay some of the highest car insurance premiums in the country — but there are ways to reduce the cost without cutting essential cover. Here are the strategies that make the biggest difference.
Cost-Saving Tips for Under-25 Drivers
Tip | How It Helps | Best For |
Increase your excess | Higher excess = lower premium. Can save $100–$400+ per year. | Drivers with an emergency buffer who can afford the excess if they need to claim. |
Choose a low-risk car | Smaller engines, low theft risk, and cheaper repair costs mean cheaper premiums. | Anyone driving high-risk or high-performance cars who wants to reduce costs quickly. |
Avoid modifications | Mods increase insurer risk and can push premiums up or cause insurer decline. | Young drivers considering cosmetic or performance mods. |
Install an immobiliser | Reduces theft risk and can unlock small insurer discounts. | Cars parked outside or in moderate-to-high-risk suburbs. |
Be correctly listed on a parent's policy | Can sometimes reduce premiums — but only if you're honestly listed. Avoids "fronting." | Drivers living at home or sharing a family car. |
Park securely at night | Garages and driveways can significantly reduce theft and vandalism risk. | Urban drivers and those parking on the street overnight. |
Compare every 12 months | Insurer pricing for young drivers changes fast — comparing can save $200–$600. | All young drivers who want the cheapest real-time price. |
The Takeaway
Car insurance is always pricier for young drivers — but it doesn't have to break the bank. The biggest savings come from making smart, intentional choices: driving a low-risk car, adjusting your excess, avoiding unnecessary mods, and comparing your options regularly.
The insurer that's cheapest for one 20-year-old in Auckland won't necessarily be cheapest for a 23-year-old in Dunedin — which is why running your own Market Scan is the simplest way to find out what you should be paying.
Small changes can cut hundreds off your premium. Smart comparisons can save even more.
Ready to check your real price? Run a Market Scan and see who's cheapest for you today.
Related Reading
Ready to compare the insurers that frequently offer competitive rates for young drivers? The Quashed team has the reviews you need:
Autosure Insurance Review – Dominating the TPFT market with over 50% of cheapest quotes for young drivers, Autosure is worth checking if you're looking for affordable third party cover without compromising on protection.
Assurant Insurance Review – A specialist insurer that often covers higher-risk profiles, Assurant can be a solid option when mainstream providers decline or quote sky-high premiums for modified or performance vehicles.
Provident Insurance Review – Ranking third for comprehensive quotes among under-25s, Provident balances competitive pricing with flexible cover options, making them a strong contender for young drivers shopping around.
Tower Insurance Review – One of NZ's established insurers, Tower offers comprehensive policies with extensive add-ons, though they may not always be the cheapest option for younger drivers without a clean driving record.
MAS Insurance Review – Originally serving medical professionals, MAS now offers policies to select groups and can provide competitive rates for eligible young drivers, particularly those in healthcare or education fields.
Car Insurance FAQs for Young Drivers (NZ, 2026)
1. Why is car insurance more expensive for under-25s?
Insurers price young drivers as higher risk because they're statistically more likely to be involved in crashes. ACC data shows 16–24-year-olds make up a small share of licence holders but a large share of serious accidents. Higher risk = higher premiums.
2. Is third-party good enough for a cheap first car?
Often, yes. If your car is worth under ~$2,500 and you could afford to replace it, Third Party or TPFT can be a smart, budget-friendly option. If replacing the car would be a financial stretch, consider Comprehensive.
3. Should young drivers get Comprehensive cover?
If your car is worth more than $5,000 or you can't afford to replace it, Comprehensive is usually the safest choice. It protects you against the biggest financial losses — including crash damage, weather, theft, and vandalism.
4. Will being on my parents' policy make insurance cheaper?
Sometimes — but only if the insurer allows it. Some insurers won't cover younger drivers under a parent's policy, and others may still charge a higher excess for under-25s. Always check the policy rules before assuming it's cheaper.
5. How can I get cheaper car insurance as a young driver?
Choose a low-risk car, increase your excess, avoid modifications, park securely at night, and compare your options every year. Small changes can significantly reduce your premium. A Market Scan shows exactly how each tweak affects your price.
6. Does my excess change if I'm under 25?
Many insurers charge a higher "young driver excess" on top of your standard excess. This means if you claim, you could be paying hundreds more than an older driver. Checking your excess in advance helps avoid surprises.
We're on a mission to quash insurance confusion
We don't just squash 'em, we quash 'em, to put you in control.
Visit Quashed.co.nz to compare insurance and start saving today.
