The youth tax: A 20-year-old new driver could be paying over $13,000 for insurance a year

Older people like to blame the youth for society’s ailments, but there are a few instances where it’s sometimes justified.

Road safety might be one of them. According to data pulled from the Rates.ca auto insurance quoter, drivers under 25 – particularly males – are significantly more likely to be involved in dangerous driving incidents than all other age groups.

Generally — and unsurprisingly — when it comes to driving, the older and more experienced you are, the safer you are on the roads. For example, 0.35% of male drivers over the age of 60 years old reported receiving serious or major tickets in their driving history, while 0.62% of those age 45 to 59 did*.

The rate of major or serious infractions went incrementally up as age groups went down— 0.98% of drivers age 25 to 34 reported dangerous driving tickets, while 1.3% of male drivers age 25 and young had major or serious tickets on their records.

Put another way: Males under 25 years old are 73% more likely to have serious tickets on their records than older male drivers.

Meanwhile, female drivers under 25 were 53% more likely to have these serious tickets than older female drivers (overall, female risk levels were lower than their male counterparts).

It doesn’t just stop at major tickets. In general:

• Drivers under 25 are 66% more likely to have speeding tickets than drivers over 25.
• Drivers under 25 are 53% more likely to have any tickets than drivers over 25.
• Drivers under 25 are 17% more likely to have been in recorded accidents than drivers over 25 (however, this number is likely higher, as accidents are often settled outside of insurance).

Driving – is it another thing ruined by Gen Z?

Not quite. While young drivers tend to get in more scrapes more often, Canadian drivers overall appear to be driving more safely than in previous decades — and much more safely compared to our neighbours to the south.

Why do young drivers tend to be worse drivers?

To understand why young drivers have such high incident rates, just think back to high school, and your one friend with their own car (or maybe that’s you!). You’re driving home after school or from a party. The music is blasting, the windows are down, and your buddies are goofing off in the back seat.

From there, just count the distractions: Fiddling with the radio, shouting over the din, the jerks in the back — maybe one to a seatbelt, but maybe more. Maybe you were all up late at night studying for an exam; your exhaustion masked by energy drinks and the buzz of energy around you.

Who’s watching the speed limit? Who’s goading on the driver to push the speed limit?

“There are various biological, psychological, and developmental changes that occur in adolescence that play a role,” says Craig Lyon, director of road safety engineering at the Traffic Injury Research Foundation (TIRF). “They include overconfidence, sensation seeking, prevalent sleep deprivation and fatigue, and peer influences to engage in risky driving behaviours.”

Robyn Thomas is the director of commercial lines at Whitley Newman, an insurance brokerage based in Quinte West and Kingston, Ontario. 

In her experience as a broker, the most common traffic convictions she’s seen from young drivers include driving under the influence, speeding, use of a handheld device, and failure to wear a seatbelt.

“Kids tend to want to play their music, or they're answering their phone on the screen next to them and they’ve got friends are in the vehicle,” she says.

When it comes to young drivers in rural areas, she often sees claims that result from single-vehicle accidents.

“You know, you end up in a ditch, or you hit a deer, because you don’t have as many cars on the road at the same time,” she says. “You’re not getting those rear-enders or sideswipes, or backing into somebody [that you would see in a city].”

However, fender benders are generally universal: “Kid backs up, hits somebody’s parked car because they weren’t paying attention,” she says. “They’re not backing in or not experienced enough to back in, and they clip somebody.”

All these infractions add up to risky driving habits and soaring premiums.

A young male driver pays over $3,000 more than a young female driver in insurance annually

According to premiums generated by the Rates.ca auto quoter, a 20-year-old driver living in Toronto with a recent model Honda Civic and no claims history can expect to pay $13,418 per year (assuming he did not complete an MTO-approved beginners drivers education course).

A female driver with the same profile can expect to pay $9,607 per year.

 “Young people and males just have a higher threshold for risk in general,” says Lyon. “Although it's interesting, phone rate use is actually higher for females, but other risky driving behaviours, it's consistently males — speeding, aggressive driving, all that sort of stuff.”

Indeed, male drivers under 25 are 63% more likely to have serious/major tickets and 28% more likely to have speeding tickets than female drivers under 25, according to the Rates.ca quoter data.

“It's the males that are having the accidents, the males that are getting the convictions,” says Thomas. “Thinking about all these claims and minor statistics that come in. It's just statistics. Like it's just been years and years of stats built up.”

Thomas also suggests that young males also choose riskier cars, or commonly stolen vehicles, which can also affect the price of insurance. 

In her experience, she says young men tend to opt for sportier and speedier models like the Honda Civic and Volkswagen Golf, as well as customized sound systems and mufflers, which can raise the value of the car.

In more rural communities, they gravitate towards older trucks without many modern safety features found in modern cars.

“Guys love their pick-up trucks, right?” she adds.  

Read more: The best way for high-risk drivers to get car insurance

Inexperience affects drivers both young and old

It isn’t fair to blame the young for their youth; people of any age can drive distracted, tired, or sharing their car with peer passengers. Often, the biggest risk factor is inexperience – and inexperience impacts people of any age. It just happens that young people have not had enough time to gain solid time on the roads.

The tendency to misjudge speeds and stopping distances are directly linked to speeding and running reds, and these are aspects of inexperience, not youth, says Lyon.

“Hazard detection, anticipation and mitigation skills are more complex and often take longer driving time and more experience to master them,” he adds.

In Ontario and other provinces, some amount of driving experience is built into the graduated licensing process: As soon as you complete the written test and receive your G1 you can start driving with a fully licensed co-driver in the passenger’s seat beside you.

“You can start whether you're 18 or you start when you're 36,” says Andrew Marek, chief growth officer/chief AI officer at Young Drivers of Canada. “You still have to go through that process where you’re accompanied, and then you move to the next grade of limitations, and then you become fully licensed. There’s a time period.”

Inexperience can also be helped along with a Ministry of Transportation-approved Beginners Training Education (BDE) course like Young Drivers of Canada, DriveWise, or All Nations Driving School.

In order to graduate from a BDE course, drivers need to finish 20 hours of in-class (or online) theory, 10 hours of home study, and 10 hours of in-car lessons with a licensed instructor.

In addition to learning safer driving habits, successfully completing driver’s training allows drivers to take their G2 a few months earlier, and save money on insurance.

So, while the 20-year-old male driver who opted for no discounts or drivers training might be quoted around $13,418 for insurance, he can save almost $2,000 just by taking a BDE. His premium would be $11,485.  

Drivers are getting licensed later in life

For some people, getting licensed is a rite of passage and a key to freedom. But for an increasing many, it’s born out of necessity.

According to Marek, the average age of a Young Drivers student was between 16 and 18 years old around the year 2000 and earlier. However, in the past 12 years, the typical student is 20 years old.

Province-wide, nearly 30% of Ontario G1-holders belong in the 25 to 34 age-cohort — slightly less than those age 16 to 20, which made up 32% of all G1-holders. Those aged 25 to 34 also made up 28% of all G2-holders.

There are many reasons why people are putting off getting licensed. First, there’s the sheer cost of owning a car. And then there’s competitive forms of transportation, from transit systems to bikes and e-bikes, and the prevalence of rideshare companies like Uber and Lyft. And, most significantly, there is anxiety.

“We're seeing the anxiety levels of new drivers increasing,” says Marek. “We actually had to come up with an anxiety reduction driving program last year because anxiety transcends whether the new driver is 16 years old or the more mature driver.”

Anxiety was the number one reported reason why people are holding off driving, he adds. And what gets drivers on the road in the end, is simply not being able to put it off any longer.

“They eventually said ‘We have to drive because we have to get to school; have to get to work; have to go to the office’,” he says. “The necessity was there.”

However, putting off driving may have its benefits: A male driver licensed at 34 years old and who goes through driver’s training can expect to pay around $7,612 a year for insurance — nearly $4,000 less than a 20-year-old male driver with the same experience.

Read next: What discounts can lower your auto insurance premium?

Despite modern distractions, the roads themselves are safer

There are certainly enough reasons to be anxious on the roads, especially now.

“There are more opportunities for driver distraction with personal electronic devices and in-car systems in modern vehicles,” says Lyon. “The increasing size of vehicles has resulted in more blind spots for drivers and increased risk of injury for vulnerable road users and drivers of smaller vehicles.”

Vi Bilägare, a Swedish car magazine found that modern car touchscreens can take between 13.5 to 45 seconds to perform simple tasks like changing the radio station or adjusting the air conditioning. In comparison, it took 10 seconds for a 2005 Volvo. As a result, many car manufacturers are rethinking the knob.

Fatalities decline nearly 30% from two decades ago

However, despite these new risks, and all the old existing risks, research from Transport Canada found that road safety has improved over the past few years – at least when it comes to fatalities and collisions.

Road fatalities have decreased by 28% and serious injuries are down 41% compared to 20 years ago, when that 2005 Volvo above was fresh from the lot. The number of fatalities and serious injuries ticked up between 2022 and 2023 by 1.7% and 0.9% respectively, but overall injuries decreased 3.6%.  

We’re faring much better than our neighbours to the south, too. A joint study between TIRF and the Insurance Institute for Highway Safety (IIHS) found that while road fatalities remained relatively stable between 2007 and 2021 in the U.S, Canada saw a decline of 22%.

“Over time, both countries have been improving despite populations growing,” says Lyon. However, around 15 years ago, the two countries diverged. “It wasn't so much like the US is getting worse. It's more like they plateaued. Their fatality rates have gone up, but they've gone up as you would expect with more people driving. Whereas, Canada has continued to go down.”

His team found that some of the biggest reasons for this decline in fatalities were policy-related, including tougher penalties for distracted driving and drinking and driving, and seatbelt use.

“One of the issues in the US is they don't have strict laws, and they also don't enforce them as well,” he says.

The kids are all alright – but their insurance rates aren’t

An inexperienced 20-year-old male driver with their own insurance policy who uses their car to commute to work or school can expect to pay over $10,000 a year for insurance – and that’s with discounts associated with drivers training and telematics. A female driver of the same age can expect to pay between $8,000 to over $9,000.

And if these drivers get into a collision or receive a traffic ticket, that insurance rate is likely to go up.

However, Robyn Thomas says, young drivers won’t be saddled with high insurance rates forever.

“You still have to build your experience,” she says. “You still have to put in your time. You do start to see savings at the full three-year mark, and 25 years old is around the time that you’re treated like anybody else.”

Until then, she recommends choosing a safer car that has advanced safety features and isn’t prone to theft. She also stresses the importance of staying vigilant on the road.

“Don’t make a decision that would cause you to be in a higher risk of having an accident,” she says. “So have that designated driver – but maybe you only have three people in the car, versus four, loudly yelling.”

Lastly, she recommends all families talk to their brokers to find a situation that works for them, whether it’s listing your child as an occasional driver, opting for a multi-vehicle discount or removing parts of coverage where it’s not needed.

“That’s where the broker comes in,” she says. “They play with the market and figure out what's the best option and give two or three options to clients so then they can make the decision that works.”

Practice makes perfect, and you can’t rush perfection. But what you can do is slow down, check your blind spots, keep your phone in your bag, and heed traffic laws – and that’s not nothing.