Drivers under the age of 25 are 26% more likely to be in a crash than older drivers, according to research from insurance company AMI.

But that means they also pay more for their car insurance. So are they getting a fair deal?

According to Waka Kotahi New Zealand Transport Agency, drivers on a restricted licence were seven times more likely to be involved in a fatal, or serious injury crash than other drivers.

Data also showed that young restricted drivers were more at risk of having a serious crash in the first six to 12 months of driving solo on their restricted licence than at any other time in their lives, partly due to driving inexperience.

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Drivers aged under 25 were therefore a risk for insurance companies, and as a result their premiums were higher than those for older drivers.

According to MoneyHub, the lower the driver’s age, the higher the price of insurance. Its research indicated 17-year-olds paid more than 21-year-olds.

MoneyHub compared the quoted price for comprehensive insurance from AMI, AA Insurance, State Insurance, Trade Me Insurance and Tower Insurance for a 2010 Toyota Corolla with no car alarm and parked off-street but not in a garage.

Its sample drivers were a 17-year-old male and a 17-year-old female with no accident history and holding a restricted licence since 2021.

The drivers travelled about 2000km a year, and the vehicle was for private use and had an insured value of $9000.

It found w​​​​​​hile some insurers were competitive (AMI and Trade Me Insurance), others quoted well above average (AA Insurance and State) for a stand-alone policy.

Digging into the reseach a little further MoneyHub found a 17-year-old male in Takapuna, Auckland, would pay $1225.80 through AMI, while a female would pay $1190.23. State Insurance was the most expensive at $2516.73 for a male and $2297.56 for a female, and Trade Me Insurance was the cheapest at $1609.30 (male) and $1421.15 (female).

State was the most expensive in Hamilton, Wellington, Christchurch, and Dunedin but had the lowest young driver excess for a driver aged between 21 and 24, at $450. The highest excess was at AMI, at $1150.

Paying the annual car insurance premium in a lump sum was between 10% and 15% cheaper than paying in monthly or fortnightly instalments, saving about $100 to $200 a year.

But senior lecturer at Massey University, Dr Michael Naylor, said insurance companies had every right to base insurance and premiums on statistics.

“The law allows insurance companies to discriminate based on things they can prove statistically,” he said.

This meant they could use age and sex to change premiums – but it didn’t mean people under the age of 25 were being ripped off.

“Insurance companies don’t have data on general driving they only have data on when you crash.

“And therefore it’s hard to tell which drivers are good and which drivers are bad.”

But increasingly sensors were being put into cars, which monitor driving behaviour.

An example was in the UK, the Drive Like a Girl programme fitted young drivers with an in-car sensor that tracked a driver’s acceleration, breaking and how fast they took corners. Good driving was rewarded with a premium discount, bad drivers were charged higher premiums, Naylor said.

“That can start to solve the discrimination problem,” he said.