Car insurance for new drivers protects you financially while you’re learning the ropes. It pays for injuries you cause to others via compulsory third party (CTP) and, if you add more cover, damage to other people’s property and repairs or replacement of your own car after a crash, theft, fire or storm. It applies to Ls, Ps, under‑25s and anyone newly licensed in Australia.
This 2025 guide sets out who counts as a new driver; the cover options (CTP, third party, comprehensive) and how CTP differs by state; how insurers price policies and the excesses that apply. You’ll see expected costs, how to choose cover for your first car, ways to cut premiums without cutting protection, what to tell your insurer, how claims work, and which extras matter—plus a checklist, glossary and FAQs to help you compare quotes with confidence.
Who counts as a new driver in Australia?
For car insurance, a “new driver” typically includes anyone on their Ls or Ps, most under‑25s, and drivers who’ve recently moved to a full licence. Insurers often price these groups as higher risk and may apply extra excesses. Crucially, you can be 25+ and still be treated as inexperienced if you’ve held a full licence for less than about two years, which can trigger an “inexperienced driver” excess. Even if you only occasionally drive a parent’s car, you’ll usually be rated as a new or inexperienced driver for cover and excess purposes.
Types of car insurance in Australia explained (CTP, third party and comprehensive)
Every car on Australian roads must have CTP to be registered. From there, you choose whether to add cover for property damage and your own car. For car insurance for new drivers, understanding the trade‑off between price and protection helps you pick the right level first time.
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CTP (Compulsory Third Party): Mandatory. Covers your legal liability for injuries you cause to other road users. It doesn’t cover damage to any vehicles or property.
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Third Party Property Damage (TPPD): Typically cheaper. Covers damage you cause to other people’s cars or property, not your own. A variant, Third Party Fire & Theft, adds limited cover if your car is stolen or damaged by fire.
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Comprehensive: Broadest protection. Covers your car and others’ for accidental damage, plus events like theft, fire, storms and floods. Some policies also include perks (for example, new‑car replacement on a total loss within a set period).
How CTP works across states and territories
CTP is the mandatory injury cover tied to your vehicle registration, but how you buy it and what it includes varies by state. In NSW it’s called a Green Slip. In NSW, QLD, ACT and SA you choose a private CTP insurer and pay for it separately to rego; in other states and territories it’s government-provided and usually included in the registration fee. CTP covers injuries to people, not damage to cars or property, and the exact injury benefits (including whether the at‑fault driver gets cover) differ by jurisdiction.
- Where you buy/pay: Private and paid separately in NSW, QLD, ACT, SA; included with rego elsewhere.
- Who must be listed: If you’re the youngest person who’ll drive the car, the registered owner should tell the CTP insurer; premiums may change.
- What’s covered: Injuries only. You’ll need third party or comprehensive insurance for vehicle/property damage.
How insurers calculate premiums for new drivers
Insurers price risk, and car insurance for new drivers is usually higher because younger and less‑experienced drivers have more crashes on average. Your premium reflects who’s driving, where and what you drive, how often you use it, and the cover you choose—each insurer weights these factors differently, so quotes can vary a lot.
- Age, licence stage and history: Age, gender, time on a full licence and any claims/offences matter.
- Location and parking: Postcode risk and whether you garage the car or park on‑street.
- Car type and value: Make, model, market value, condition and safety; performance cars cost more.
- Annual kilometres and usage: The less you drive, the lower the typical cost; some offer low‑km options.
- Cover level and add‑ons: Comprehensive vs third party, plus any optional extras.
- Listed drivers: Regular under‑25 drivers on the policy can change the price.
- Modifications: Declared mods or performance changes can increase premiums.
Tip: compare multiple quotes—insurers assess the same risk differently.
Excesses that often apply to learners and P‑platers
Excess is what you pay when you claim. For learners and P‑platers, multiple excesses can stack on one incident, so costs can jump. Some policies waive a young‑driver excess for L‑platers. Common excesses in car insurance for new drivers include:
- Basic/standard: default excess on most claims.
- Young driver (under‑25): extra payable if the driver is under 25.
- Inexperienced: applies if you’ve held a full licence for under two years.
- Unlisted driver: charged when a regular driver isn’t listed on the policy.
For example, CHOICE notes a 20‑year‑old unlisted P‑plater could face about $2,800 in combined excesses ($800 standard + $1,200 young‑driver + $800 unlisted), depending on the insurer.
Average costs to expect in 2025 and what affects them
Car insurance for new drivers is pricier in 2025, but knowing the ballpark helps you budget. CHOICE’s July 2025 pricing shows average comprehensive premiums of about $3,794 for drivers under 21, $2,512 for ages 21–24, and $2,026 at age 25. For under‑25s, males average $3,106 versus $2,531 for females. Where you live also matters, with big state differences.
| State/Territory | Avg premium (≤25) |
|---|---|
| VIC | $3,614 |
| NSW | $3,362 |
| NT | $2,913 |
| WA | $2,597 |
| SA | $2,612 |
| QLD | $2,554 |
| ACT | $2,161 |
| TAS | $2,088 |
Your final price still depends on your car’s make/value and safety, postcode and where you park, annual kilometres, who’s listed, the cover level and add‑ons you choose, and the basic excess you set; low‑km use and a higher excess can reduce premiums, while performance cars, modifications and on‑street parking tend to increase them.
How to choose the right level of cover for your first car
Start with one question: if the worst happened tomorrow, could you afford to repair or replace your car yourself? For lower‑value older cars, Third Party Property Damage (or Third Party Fire & Theft) can be a sensible, cheaper fit. For newer or higher‑value cars—or if paying for major repairs would hurt—comprehensive cover is safer. Remember, CTP only covers injuries; comprehensive covers your car as well as others’, plus events like theft, fire and storms.
- Your car’s value: Higher value generally justifies comprehensive.
- Exposure to risk: On‑street parking or higher‑theft areas favour comprehensive or TPFT.
- How you drive: Lower kilometres can mean lower premiums with some policies.
- Excess tolerance: Opting for a higher basic excess can reduce premiums.
Practical ways to cut your premium without cutting cover
You want full protection, not full price. As a new driver, you can lower comprehensive or third party premiums by tweaking the risk factors insurers rate—how much you drive, where you keep the car, the car itself, and your excess—without sacrificing cover.
- Increase your basic excess: Trade a higher claim excess for a lower premium.
- Drive fewer kilometres: Choose low‑km or pay‑as‑you‑drive if you don’t use the car much and keep your estimate accurate.
- Park securely: Garage/off‑street parking and anti‑theft (alarm/immobiliser) can reduce risk.
- Pick a sensible car: Avoid performance or modified vehicles; choose safe, mainstream models.
- Pay annually: Many insurers add loadings to monthly instalments.
- Buy online when available: Genuine online sign‑up discounts are common.
- Keep a clean record: Safe driving helps premiums over time.
- Compare multiple quotes: Insurers price the same risk differently—shop around.
- Consider recognised driver training: Some brands discount after a skills course.
Driving your parents’ or a friend’s car: what you need to tell the insurer
Borrowing Mum’s, Dad’s or a mate’s car? The insurance follows the vehicle, but insurers care who drives it and how often. To avoid claim surprises or extra excesses, the owner should confirm the policy rules before you get the keys and tell the insurer about your licence stage and usage.
- If you’re a regular driver: Ask to be listed. Otherwise an unlisted‑driver excess may apply, or a claim could be knocked back.
- CTP and youngest driver: If you’re the youngest person who’ll drive the car, the registered owner should notify the CTP insurer; premiums can change.
- Main driver reality: If you become the main driver, the policy should be in your name—“fronting” risks invalid cover.
- Permission and excesses: Some policies allow any driver with the main driver’s permission, but exclusions and under‑25/young‑driver excesses can apply.
- Learners: Listing rules vary by insurer; some require adding L‑platers, others don’t—check the PDS or call to confirm.
Licence stage rules that can affect your cover (L, P1 and P2)
Your licence stage affects how insurers rate risk and which excesses apply. You must also follow licence conditions—breaches (for example, not complying with licence restrictions, refusing a drug/alcohol test, or driving under the influence) can trigger policy exclusions. Expect tighter conditions and higher excesses for P‑platers than learners.
- Learners (L): Some insurers require you to be listed; a young‑driver excess is often not applied to L‑platers; supervisor rules must be met.
- P1: Typically attracts young‑driver and unlisted‑driver excesses—list regular drivers; if you’re effectively the main driver, the policy should be in your name.
- P2: Similar to P1; once on a full licence, an inexperienced‑driver excess can apply until you’ve held it for about two years; keep to passenger/BAC limits.
Optional extras worth considering for new drivers
Smart add-ons can turn a basic policy into a proper safety net. Focus on extras that keep you moving and cap your out‑of‑pocket costs, and always check sub‑limits and whether an extra excess or premium applies.
- Replacement hire car (not at fault/theft): Stay mobile while your car is repaired or recovered.
- Low‑kilometre or pay‑as‑you‑drive: Pay less if you drive less.
- Lifetime repair guarantee (approved repairers): Assurance the work is backed for the long term.
- 24×7 towing included: Handy for breakdowns or after-hours incidents.
- New‑car replacement on total loss (time‑limited): Valuable for newer vehicles, e.g., within two years.
- Recognised driver training discounts: Some insurers reward completion of skills courses.
How to compare quotes and avoid common traps
Line up quotes on a true like‑for‑like basis. For car insurance for new drivers, keep the cover type, drivers listed, annual kilometres, where the car is kept, and the basic excess the same across each quote. Insurers weight risk differently, so prices and features vary; read the PDS to confirm what’s actually included.
- Headline price vs excess: A cheap premium can hide a high basic or stacked young/inexperienced driver excess.
- Market vs agreed value: Know which value applies and the replacement/total‑loss rules.
- Driver listing rules: Unlisted/under‑25 excesses can bite; list regular drivers.
- Extras creep: Check if hire car, glass and roadside are included, limits, and caps.
- Low‑km conditions: Understand odometer checks and what happens if you exceed the cap.
- Usage exclusions: Rideshare/delivery often need specific cover; don’t assume you’re covered.
- Mods and accessories: Declare performance mods and fitted accessories to avoid claim issues.
- Payment and fees: Look for monthly loadings, admin/cancellation fees, and repairer choice/lifetime warranty terms.
Paying monthly vs annually, and switching mid-term
Paying monthly can smooth cash flow, but many insurers add instalment loadings or fees, making annual payment cheaper over the year. Missed instalments can also risk lapses. Switching mid‑term is fine: you can usually cancel and receive a pro‑rata refund less any fees if you haven’t claimed—just line up start/finish dates to avoid gaps. Note that cooling‑off rules apply, and cancellation fees may apply outside that period. CTP is separate to your third‑party or comprehensive cover and isn’t affected by switching those policies.
- Pay annually if you can: Avoid instalment loadings.
- If paying monthly: Enable auto‑pay and keep funds available.
- When switching: Confirm cancellation fee and refund method, disclose any open claims, and align dates to prevent uninsured days.
What to do after an accident and how claims work
First, breathe and stay safe. If anyone’s injured or the scene is dangerous, call 000. Move to a safe spot if you can, and don’t admit fault. For car insurance for new drivers, quick, accurate info helps claims run smoothly—collect details, notify your insurer promptly, and keep to your licence conditions.
- Secure and record: Swap names, licence numbers, regos and insurer details; photograph damage, location and road conditions; save dash‑cam; note time and witnesses.
- Report appropriately: Call police for injuries/unsafe scenes. CTP handles injury claims; property damage goes through your car insurer.
- Notify and lodge: Contact your insurer ASAP and lodge online or by email. With National Cover: 24×7 towing, lifetime warranty on authorised repairs, hire car on not‑at‑fault claims, and an excess discount when you use preferred repairers.
- Assessment and repairs: Your car is assessed, then repaired or written off. You’ll usually pay the basic excess plus any young/inexperienced/unlisted excess at repair or settlement.
Rideshare and food delivery: do you need different cover?
If you use your car to earn income (rideshare or food delivery), the risk profile changes. Many standard personal policies exclude or limit this use, so you’ll usually need a rideshare/delivery endorsement or a dedicated commercial policy. CTP still only covers injuries; for damage claims you need third party or comprehensive cover that explicitly allows this usage. National Cover offers specialised policies for rideshare, taxi, courier delivery and business vehicles—useful for car insurance for new drivers stepping into gig work.
- Tell your insurer before you start: Get confirmation in writing.
- Select the correct usage: Rideshare, courier or taxi, or claims may be refused.
- Review pricing and excesses: Update your policy if your work hours change.
- Know exclusions: Unlisted drivers, licence breaches, drugs/alcohol still void cover.
Car choice and safety features that can lower your premium
The car you choose matters as much as how you drive. Insurers price in your vehicle’s type, value and theft risk. Performance cars usually cost more to insure, while cheaper models with strong safety ratings often cost less. For car insurance for new drivers, smart car choices can trim premiums without cutting cover.
- Choose sensible over sporty: Performance models attract higher premiums.
- Favour high safety ratings/features: Insurers like safer mainstream cars.
- Add anti‑theft (alarm/immobiliser): Lowers theft risk and often cost.
- Avoid modifications: Declare any value/performance mods or risk higher costs.
- Skip expensive models: Higher purchase price usually means higher premium.
Checklist: information you’ll need to get a quote fast
Speed up your quote by having the essentials ready. For car insurance for new drivers, insurers ask about you, your car and how it’s used; accurate details avoid requotes and excess surprises, especially for learners and P‑platers. Gather the following before you start an online form or call. It also helps you compare like‑for‑like across brands.
- Personal details: name, DOB, address; licence stage/years held.
- Car details: make/model/year, value; rego/VIN, mods/accessories.
- Usage: private/business, rideshare/delivery; estimated annual kilometres.
- Parking/security: garage/carport/street; alarm/immobiliser.
- Drivers: main driver and all regular drivers (under‑25s).
- History & cover choices: recent claims/offences; excess and add‑ons.
Glossary of car insurance terms for first-time drivers
New to car insurance? Use this quick glossary to cut through the jargon. These are the terms you’ll see in quotes, Product Disclosure Statements and claims, explained in plain English for learners, P‑platers and newly licensed drivers.
- Premium: The price you pay for your insurance (monthly or annually).
- Excess (basic/standard): The amount you pay out of pocket when you claim.
- Age/inexperienced/unlisted excesses: Extra excesses that may stack for under‑25s, new full‑licence holders or unlisted drivers.
- CTP (Compulsory Third Party): Mandatory injury cover tied to registration; doesn’t cover vehicle/property damage.
- Third Party Property Damage (TPPD): Covers damage you cause to other people’s cars/property, not your own.
- Third Party Fire & Theft (TPFT): TPPD plus limited cover if your car is stolen or damaged by fire.
- Comprehensive: Covers your car and others’ for accidents, theft, fire, storms and more.
- Market value vs agreed value: Payout at current market price vs a fixed sum you and the insurer set.
- PDS (Product Disclosure Statement) & TMD: The policy’s rules/features and who the product is designed for—read before buying.
- Main driver vs listed drivers: The person who uses the car most; regular drivers should be listed to avoid extra excesses.
- Fronting: Insuring in a parent’s name when you’re the real main driver—can invalidate claims.
Frequently asked questions
New drivers tend to face the same sticking points when they first buy cover. Use these quick answers to steer your choice, avoid excess shocks, and make sure you’re actually covered for how you use the car, whether that’s borrowing a parent’s vehicle or starting paid driving work.
- Can I drive my parents’ car without my own policy? Yes—the insurance follows the car, but list regular drivers or an unlisted‑driver and young‑driver excess may apply; don’t “front” if you’re the main driver.
- Is CTP enough? No. CTP covers injuries only; add third party or comprehensive for vehicle/property damage.
- Do L‑platers pay a young‑driver excess? Often waived for learners, but it depends—check the PDS.
- When do premiums drop? Generally as you gain experience; many see a step down around 25, but it varies by insurer.
- Am I covered for rideshare or food delivery? Not under most standard policies—get specific rideshare/delivery cover first.
- Is paying monthly cheaper? Usually costs more than annual due to instalment loadings and fees.
Next steps
Now you’ve got the essentials: who counts as a new driver, the cover types and CTP by state, how pricing and excesses work, and practical ways to lower premiums without losing protection. You also know what to tell insurers, how claims run, and when work or usage needs specific cover.
Next, choose your cover level, gather your details, compare like‑for‑like quotes, set a sensible excess and kilometre estimate, and list every regular driver. Finish by getting tailored help and a sharper price with National Cover — price‑beat, 365‑day support, lifetime repair warranty, not‑at‑fault hire car and 24×7 towing.
