Best Insurance for Under 25 Drivers NZ 2026: Guide

Choosing the Right Cover for Young Drivers

When you are under 25, choosing the right type of car insurance matters just as much as finding a low price. Your cover type can be the difference between a manageable setback and a bill that wipes out your savings.

Comprehensive Insurance: Best for Cars Worth $5,000+

Comprehensive covers damage to your car and the other person's car, regardless of who is at fault. For young drivers, this is usually the safest choice, especially if your car is newer, worth more than $5,000, or something you could not afford to replace if it were written off.

Why younger drivers often need comprehensive cover:

•  You are statistically more likely to be involved in an accident in your first few years of driving

•  One at-fault accident could drain your savings entirely

•  Comprehensive also pays out for storms, theft, vandalism, fire, and at-fault crashes

The trade-off: Comprehensive is the most expensive option. For the Auckland-based profile we tested, comprehensive premiums ranged from $163 to $247 per month at a $500 excess. But if losing your car tomorrow would leave you stranded, comprehensive is worth the investment.

Third Party, Fire and Theft (TPFT): Best for Cars Worth $2,000 to $7,000

TPFT is a popular choice with young drivers because it protects you from the biggest financial hits without paying full comprehensive prices. It covers damage you cause to other people's cars, plus theft and fire damage to your own car. However, it will not cover repairs to your car if you crash and are at fault.

Why TPFT works well for young drivers:

•  Significantly cheaper than comprehensive (in our test, TPFT started at $66 per month vs $163 for comprehensive)

•  Still protects you from major losses like theft

•  A good fit for older or mid-value cars where full payout coverage is not essential

The trade-off: If you crash and are at fault, you will be paying for your own repairs out of pocket.

Third Party Only: The Minimum Level of Cover

Third party only is the most basic (and cheapest) option. It only covers damage you cause to other people's cars and property. It does not cover theft, fire, or any damage to your own vehicle.

In our test, third party only premiums started from around $25 to $37 per month, making it the most affordable option by far. However, if your car is stolen or written off, you receive nothing.

For most young drivers, third party only should be treated as a last resort.

Not sure which option fits your situation? Run a Market Scan on Quashed to see how each cover type changes your price. You can toggle between comprehensive, TPFT, and third party in seconds to compare live quotes. If you are on a learner or restricted licence, the scan will factor that in automatically.

Which Insurers Cover Young Drivers in NZ?

Not all insurers treat young drivers the same. Some will not insure you at all if you are under 21, while others will cover you but with higher premiums and additional excesses. Before you start comparing prices, it helps to know who will actually cover you.

The good news is that many NZ insurers do cover young drivers, including AMP, AMI, State, Tower, Trade Me Insurance, Provident, and Assurant.

To show you how insurer offerings differ for young drivers, we ran a Quashed Market Scan for a 23-year-old male based in Auckland on a restricted licence with one year of driving experience, no claims history, and an immobiliser fitted. The car is a 2010 BMW 320i valued at $8,000. Here is what the results looked like across all three cover types.

Comprehensive Cover: Who Is Available and What They Charge

Preferred excess: $500 | Sum insured: $8,000

Key takeaway: AMP was the cheapest comprehensive option for this profile at $163.24 per month. Increasing the excess from $500 to $1,000 dropped AMP's price to $138.91 per month, a saving of around $24 per month (roughly $290 per year). Provident offered competitive comprehensive pricing at $210.48 per month, while Assurant became an option at the $1,000 excess level at $201.03 per month.

Third Party, Fire and Theft (TPFT): Who Is Available and What They Charge

Preferred excess: $500 | Sum insured: $8,000

Key takeaway: State was the cheapest TPFT option for this profile at $65.75 per month, followed by AMI at $67.66, AMP at $69.70, and Assurant at $93.38. TPFT premiums are significantly cheaper than comprehensive, starting at roughly 60% less for this driver profile.

Third Party Only: Who Is Available and What They Charge

Preferred excess: $500

Key takeaway: Third party only is the most affordable cover type, starting from $29.26 per month (Assurant), followed by Tower at $31.95, AMP at $35.96, and AMI at $36.57. However, it offers the least protection of any cover type and should be treated as a last resort for most young drivers.

These results are based on one specific profile. Your quotes will differ based on your car, suburb, licence type, and driving history. The fastest way to see your real prices is to run a Quashed Market Scan. It takes under two minutes and compares live quotes from multiple NZ insurers.

How Much Does Car Insurance Cost for Young Kiwis?

Car insurance is not cheap for anyone, but for young drivers it is even tougher. According to Q1 2026 Quashed Index data, the national average for comprehensive car insurance is $1,267 per year ($106 per month). In Auckland, that average climbs to $1,478 per year ($123 per month).

Drivers under 25 consistently pay well above those averages. Based on Quashed data, here is how premiums compare between the 18 to 24 and 25 to 30 age groups:

Average Comprehensive Premiums by Age Group

Average Third Party, Fire and Theft Premiums by Age Group

Key takeaway: Under-25s pay around 20 to 30% more for car insurance on average. Depending on the car, suburb, licence type, and excess, some young drivers can face premiums that are significantly higher again.

Want to see what this looks like for your specific car and location? Run a Market Scan to get real quotes from NZ insurers instantly.

Why Do Young Drivers Pay More for Car Insurance?

Insurers do not charge higher premiums just because you are young. They charge more because the data shows younger drivers are statistically more likely to be involved in crashes.

According to ACC and Ministry of Transport road safety data in NZ:

•  16 to 24 year olds make up around 13% of licence holders but account for approximately 30% of serious road injuries and over 25% of fatalities.

•  Young drivers are more likely to crash in their first six months on a restricted licence than at any other time in their driving life.

•  Younger drivers lodge more claims on average, which increases premiums across the board for their age group.

Because of these risk factors, insurers classify under-25s as a higher-risk group. This means you will typically see higher premiums than an older driver would pay for the same car in the same suburb. The good news? There are practical ways to bring those premiums down, and the type of cover you choose makes a significant difference.

Understanding Your Excess (A Quick Way to Lower 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 Much Can Raising Your Excess Actually Save?

Based on our Market Scan results for a 23-year-old in Auckland, here is the real-world difference between a $500 and $1,000 excess:

As you can see, increasing your excess from $500 to $1,000 can save almost $300 per year on comprehensive cover. That is a meaningful reduction, but it means you need to be able to afford $1,000 out of pocket if you need to make a claim.

Extra Excesses for Under-25s

Most NZ insurers stack additional excesses on top of your standard excess for young drivers. If you need to make a claim, you may end up paying:

•  Your standard excess (e.g. $500)

•  Plus a young driver excess (which applies to listed drivers under 25)

•  Plus an unlisted driver excess (if you are not named on the policy)

•  Plus an inexperienced driver excess (if applicable with your insurer)

Based on the Market Scan data, nearly all providers apply an additional excess for listed young drivers under 25. Some providers, like Provident, base unlisted driver excesses on their Open Driver Range rather than a blanket under-25 rule. A single accident can mean $1,000 to $2,000 or more out of pocket, even with insurance in place.

How to Choose the Right Excess

Could you pay this excess tomorrow? If you could not comfortably find $1,000 at short notice, a $500 excess is the safer choice, even if your premium is slightly higher.

Is your premium already high? If comprehensive cover is stretching your budget, increasing your excess is one of the most effective ways to bring it down. Based on our Market Scan results for a 23-year-old Auckland driver with a 2010 BMW 320i, increasing the excess from $500 to $1,000 on comprehensive cover saved $292 per year with AMP.

Do you have an emergency fund? If you have savings set aside for unexpected costs, a higher excess can make sense. If not, keep it lower to avoid being caught out after an accident.

How Young Drivers Can Lower Car Insurance Costs

Young Kiwis pay some of the highest car insurance premiums in the country, but there are practical ways to reduce the cost without cutting essential cover. Here are the strategies that make the biggest difference.

The easiest way to action most of these tips is to run a Market Scan on Quashed. You can adjust your excess, cover type, and details in real time and instantly see how each change affects your premium.

The Takeaway

Car insurance is always more expensive for young drivers, but it does not have to break the bank. The biggest savings come from making smart, informed choices: driving a low-risk car, adjusting your excess to the right level, avoiding unnecessary modifications, and comparing your options regularly.

The insurer that is cheapest for one 23-year-old in Auckland will not necessarily be cheapest for a 20-year-old in Dunedin. That is why running your own comparison is the simplest way to find out what you should actually 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 on Quashed and see who is cheapest for you today.

Related Reading

Ready to explore the insurers that frequently offer competitive rates for young drivers? Here are some helpful resources from the Quashed team:

•  Assurant Insurance Review – Assurant appeared across all three cover types in our Market Scan results and can be a solid option when mainstream providers quote high premiums.

•  Provident Insurance Review – Provident offered competitive comprehensive pricing in our scan and uses a flexible Open Driver Range approach for unlisted drivers, which can work in favour of young drivers.

•  Tower Insurance Review – One of NZ's most established insurers, Tower covers young drivers across all cover types and was the cheapest third party only option at the $1,000 excess level in our scan.

•  AMP Insurance Review – AMP was the cheapest comprehensive provider in our Market Scan at both excess levels, making them well worth checking for young drivers seeking full cover.

•  Ultimate Guide to Car Insurance in NZ – Our comprehensive breakdown of how location, driver profile, vehicle type, claims history, and excess all influence your premium.

•  Average Car, House, and Contents Insurance Cost NZ 2026 – The latest Q1 2026 Quashed Index data showing what Kiwis pay on average across all insurance types.

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 are statistically more likely to be involved in crashes. ACC data shows 16 to 24 year olds make up a small share of licence holders but a disproportionately large share of serious road injuries. Higher risk translates directly into higher premiums.

2. Should young drivers get comprehensive cover?

In most cases, yes. If your car is worth more than $5,000 or you could not afford to replace it, comprehensive is the safest choice. It protects you against the biggest financial losses, including crash damage you cause, storm damage, theft, and vandalism. The only scenario where you might consider a lower tier is if your car's value is very low and you could comfortably afford to replace it.

3. Is third party cover good enough for a cheap first car?

If your car is worth under approximately $2,000 and you could genuinely afford to replace it tomorrow, third party or TPFT can be a budget-friendly option. However, even for low-value cars, TPFT is generally the better choice because it still covers you for theft and fire. Third party only should be treated as a last resort.

4. Will being on my parents' policy make insurance cheaper?

Sometimes, but not always. Some insurers will allow you to be listed on a parent's policy, which can reduce premiums. However, many insurers will still charge an additional young driver excess for under-25s even on a parent's policy. Always check the policy terms before assuming this route is cheaper. Misrepresenting who the main driver is (known as "fronting") can void your policy entirely.

5. How can I get cheaper car insurance as a young driver?

Choose a low-risk car, increase your excess (if you can afford to), avoid modifications, install an immobiliser, park securely at night, and compare your options at least once a year. Small changes can meaningfully reduce your premium. A Quashed Market Scan shows exactly how each adjustment affects your price.

6. Does my excess change if I am under 25?

In most cases, yes. Nearly all NZ insurers charge an additional "young driver excess" on top of your standard excess for drivers under 25. This means if you make a claim, you could be paying significantly more than an older driver would. Always check the excess structure before purchasing a policy so you know exactly what you would owe in a claim scenario.

7. Which insurer is the cheapest for young drivers?

There is no single cheapest insurer for all young drivers. Pricing varies based on your car, suburb, licence type, excess, and driving history. In our Market Scan test, AMP was cheapest for comprehensive, State was cheapest for TPFT, and Assurant/Tower traded for cheapest third party only. The only way to find who is cheapest for your specific situation is to run a Market Scan.