Young P-plater drivers who manage to keep a clean record should receive a free licence, according to the NRMA.
In a move to reduce the number of deaths and accidents, the NRMA has recommended the measure is taken to curb the number of young people who are disproportionately involved in accidents.
The Come Home Safe report also suggested that the state government look at new measures to monitor P-plate driving, such as braking, speeding and mobile phone use.
The 17-25 bracket remains over-represented regarding road deaths and injuries, with this group making up 15 per cent of all fatalities on NSW roads.
This is a staggering figure, given that just eight per cent of all drivers are P-platers.
The free licence strategy would save $180 for young people transitioning from their P-plates to full licence, and requires a clean driving record to be maintained during the P1 and P2 stages.
This system is already in place in Victoria, with young drivers given a free three-year licence as a reward for four years of P-plates with no traffic-related offences.
Another suggestion was that discounts could be offered to encourage young people to purchase newer cars, with older, cheaper models often 'death traps' for young, inexperienced drivers.