Gen Z are priced off the roads: Insurance hikes and the Budget have killed the first-car dream

The insurance industry has pushed young people to breaking point, with premiums spiralling so sharply that many Gen Z drivers are being priced off the roads entirely.

Adding to that, last week’s Budget dealt a further blow to any remaining hope of car ownership amongst the GenZ. The higher EV charging costs make embracing new technology and a greener future feel like a financial trap.

For years, young people have been told that switching to electric vehicles could save money in the long run and help the environment. This is reflected in the increasing number of young learners opting to learn automatic rather than manual.

But when upfront costs remain high and using an electric vehicle becomes more expensive, this advice rings hollow. It’s little wonder why many feel abandoned by an industry and a policy landscape increasingly detached from the costly realities of their daily lives.

Insurance is at the heart of this problem. Premiums for young drivers have risen faster than for any other age group. These hikes aren’t driven by a rise in claims, but by big corporates, with margins in mind.

When the cost of staying on the roads runs into thousands of pounds, car ownership transforms from a milestone of independence into an impossible luxury.

Faced with such a financial squeeze, young people are now being forced to rethink how they travel. Cycling and walking are often promoted as cheaper, greener alternatives, but only if the roads themselves are safe. However, the reality is that many young people don’t feel they are.

Our latest research at National Accident Helpline shows that while 82% of UK adults say they feel safe on UK roads, that figure drops to 79% for GenZ.

It may seem a small difference, but the data points to a bigger story: the very people being pushed away from driving are also the ones who feel least secure when forced to navigate the UK’s roads.

The result is a generation trapped between impossible choices. Unable to afford a car, they are left cycling and walking on unsafe roads.

However, there are still some options available for young people. From short-term car rental models to hourly hire schemes and flexible subscription services, these are fast emerging as practical options for those who only need vehicles for specific journeys.

Also, as autonomous vehicle technology advances, the prospect of affordable driverless taxis may soon eliminate the need for personal vehicles altogether.

Our research on self-driving cars found that while the majority of Brits were apprehensive about the arrival of such vehicles on UK roads, respondents under 34 years of age were the most open to it.

Ironically, the very pressures created by unfair insurance costs might speed up this process. Insurers might find themselves negotiating with large mobility operators rather than individual young drivers.

But the road ahead doesn’t need to come to a dead end. With fairer pricing, safer infrastructure and an openness to new mobility models, the challenges facing young people today could help develop smarter, more sustainable transport solutions.

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John Kushnick is the Legal Operations Director at National Accident Helpline

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