The world of obtaining car insurance at a reasonable price for 17 year olds is a daunting idea. I think that mandatory advanced driving courses could make other young drivers more aware of the hazards. However, my theory is that the insurance companies and government are doing the wrong thing. By only making it feasible for young drivers to drive hopelessly cheap, small and slow cars, the chances of accidents are higher.
Consider this. If you give someone a slow car, then all they are going to do is try and make it go faster with hard driving and amateurish mods. This is the attitude that most will have probably :

"My car only has a tiny engine therefore I can drive as fast and hard as possible and still nothing bad can happen because it's so slow and rubbish. If I do crash severely then it's no problem ; I'll just get another since it only costs a grand or two"

This promotes irresponsible and dangerous driving. On the other hand, if young drivers were able to drive fast, large and expensive cars then this would be the attitude :

"I am in control of a nice piece of machinery here, therefore I better be careful because this car has the potential to be dangerous if I over step the mark and my driving ability. If this were to be written off then I wouldn't be able to get another for cheap money, so I better not make any risky or rash decisions. I'll need to drive more conservatively"

This promotes responsible and safe driving while still providing thrills when safe to do so. I hope you read this, BLASTED insurance companies and use your brains a bit more