Car Finance for Young Drivers

The costs of running a car as a young driver

As a young driver the monthly payments might seem a little daunting, but running a car on finance is more economical than you think.

Inflated insurance prices

Many young drivers are put off purchasing a car because of the expensive cost of insurance. Not only do you have to fund a car, you also have to pay a car's worth of insurance over the course of a year. In fact, a driver in their 20s will be paying 24.5% more in insurance than those in their 30s and just under 50% more than drivers in their 40s. 

This might seem unfair, but insurance is based on risk and unfortunately for young drivers they are much more likely to have an accident. This is demonstrated in the claim rate, where 25% of all claims are made by drivers under the age of 25. 

The good news for young drivers is that these insurance costs can be cut. Additional items such as a black box, or adding a responsible 2nd or 3rd driver can help bring down costs. In addition, with our annual motor insurance we give you the flexibility to pay yearly or monthly, so you can make the most of your budget. 

With our Cosmetic Repair Cover you can save further money in the future. With this cover the cost of repairing light scratches, bumper scuffs, chips, and minor dents are taken care of, you may need to pay a small excess. This will help maximise your vehicle's future part exchange or resale value. 

The rising costs of fuel

It comes as no surprise that another factor putting young drivers off running a car is the rising costs of fuel. Based on cars with a standard fuel economy, motorists spend on average £1,288 a year to fuel a standard petrol car and £1,795 for a diesel. For young drivers this may be less of an issue in the future as half of all cars in the UK are set to be electric by 2030, with a full ban on new fossil fuel cars set for 2040.  As a young driver, car finance is a great way to get your hands on a top of the range electric vehicle. We have extensive financing options across our range of vehicles, with electric and hybrid vehicles made affordable for all drivers.

Car tax, servicing and maintenance costs

Alongside fuel, other expensive outgoings when running a vehicle are the servicing and maintenance costs.

Car tax, for example, must be paid on all vehicles in the UK, unless:

• The vehicle is registered as off-the-road (SORN).
• The vehicle is brand new and produces 0 grams of carbon dioxide (CO2) emissions – and costs less than £40,000.
• The vehicle was registered between 1 March 2001 and before April 2017 and produces up to 100 grams of carbon dioxide per kilometre driven.
• The vehicle is a ‘historic vehicle’. This is a vehicle which is over 40 years old. 

The amount you will pay for car tax will depend on its car tax band. This is measured by the amount of CO2 per km it produces. For example, a car emitting zero emissions per km will not pay any tax, while a car producing 191 to 225g of CO2 per km will have to pay £1,420. 

For a more detailed explanation of car tax bands, head over to gov.uk.

Another cost to consider are MOT tests which are mandatory for all cars over three years old. An MOT ensures that all cars on the road are safe and will not endanger the driver and other motorists. The standard cost for an MOT test is around £54.85.

A young driver can end up spending a lot of money maintaining their car, only to see the car's original value depreciate over time. By choosing a car on finance, you can minimise many of these costs. 

For example, the Peugeot Just Add Fuel® deal includes the expensive routine servicing of your vehicle. However, any damage caused by the wear of parts will have to be funded by the driver. 

Why should young drivers apply for car finance?

Stellantis Financial Services has a range of additional benefits which make choosing finance as a young driver a smarter choice. 

Just Add Fuel® 

Just Add Fuel® is an innovative car finance deal that includes insurance, car tax, warranty, servicing and roadside assistance in one 37-month package. The only cost you’ll have outside of your finance agreement is the fuel. 

For drivers 18-20 or those with less than 2 years no claims discount, Just Add Fuel® comes with a fitted telematics device. 

Flex & Free

For young drivers who like the idea of regularly driving a brand new car, Stellantis Financial Services Flex and Free lets you do just that. 

Flex and Free itself is no different to a standard contract hire agreement. It’s like a Contract Hire agreement, but with the option to change your vehicle from month 6 of your contract without penalty (subject to condition and mileage).

This makes it a great option for those who love the feel of a new car or want to try going electric before making a longer commitment.