Young drivers rely on bank of Mum and Dad

Gareth Herincx

2 days ago
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Cost of motoring

More than half of parents financially contribute to their child’s first car, new research has revealed.

The survey, conducted by comparethemarket.com, found that a quarter of mums and dads (28%) covered the entire cost – at an average of £3,528.

City Average amount parents contribute to their child’s first car
Sheffield  £4,544
Edinburgh £4,230
Birmingham  £4,009
Newcastle  £3,802
London £3,779

Help from the bank of Mum and Dad didn’t stop there, with one third (34%) of parents paying for the entirety of their children’s driving lessons, with an average cost of £1,159 per child.

Of the parents who admitted to financially contributing to their child’s driving lessons – 48% helped out from their savings, while 44% used funds from the household budget.

The study also found that many parents contribute to their child’s initial on-the-road costs, with 18% admitting to contributing to MOT, road tax, servicing and fuel until their child can afford it themselves.

Alex Hasty of comparethemarket.com said: “The cost of insurance for new drivers is exceptionally high when compared to that of more experienced drivers, costing an average of £565 more than the average insurance premium.

“Therefore, it’s not surprising to see that so many parents are financially contributing towards their child’s first year of car insurance.

“It’s really important for new drivers to use comparison services such as ours to help find the right policy for them and to check for any potential savings.”

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EVs are nearly 50% cheaper to run than petrol cars

Hyundai Kona Electric

Electric vehicles are nearly £1,000 cheaper to run than petrol cars over a year, according to new research from comparethemarket.com.

The figures show the average cost to run an EV for 12 months is £1,091 compared with £2,062 for a conventional car – a difference of £971.

The running costs for petrol cars are substantially higher as drivers of these vehicles pay an average of £640 for car insurance and £1,212 for the fuel each year.

Owners of petrol vehicles also typically need to spend at least £155 per year on road tax, while EVs are exempt.

Average running costs for 12 months

Vehicle Type Insurance Fuel MOT Road Tax Total
Electric £583 £454 £55 £0 £1,091
Petrol £640 £1,212 £55 £155 £2,062
Difference -£57 -£759 £0 -£155 -£971

The annual cost of driving an electric car has fallen by £77 in the most recent six months (May 21 – Dec 20), compared with the previous six months (Jun 20 – Nov 20).

This decline is due to a £54 drop in the cost of insurance for electric vehicles and a £23 dip in energy costs.

Electric car drivers can further reduce their running costs if they switch to the cheapest premium available. This typically costs £489, which means motorists could save £93 by shopping around for a better deal.

Electric car charging bay

Despite the substantially cheaper running costs, the up-front price of electric vehicles is a sticking point for many drivers considering making the switch from petrol.

A second-hand electric car is typically worth £22,813, based on the average value of electric vehicles from insurance renewal data.

This suggests it would take more than 20 years for the lower running costs to cover the purchase of an electric vehicle. However, motorists may be able to cover some of the purchase price by trading in their existing vehicle.

“The popularity of electric cars continues to accelerate as these vehicles now make up around one in ten new car sales,” said Dan Hutson, head of motor insurance, comparethemarket.com.

“Motorists who’ve made the switch will be glad to see our figures show electric vehicles cost roughly half as much to run as their petrol alternatives.

“These drivers benefit from substantial savings in fuel bills, insurance and tax – as well as doing their part for the environment.

“Electric car owners could save even more on running costs if they shop around for the cheapest deal when their insurance premium comes up for renewal.

“These drivers may also want to think about switching to a new Electric Vehicle Tariff for their home energy. EV Tariffs are designed to help motorists cut their energy bills by making it cheaper to charge electric cars overnight.”