Background Most previous literature on urban/rural differences in road crashes has a primary focus on severe injuries or deaths, which may be largely explained by variations of medical resources. Little has been reported on police-reported crashes by geographical location, or crash type and severity, especially among young drivers. Methods DRIVE is a prospective cohort study of 20,822 drivers aged 17–24 in NSW, Australia. Information on risk factors was collected via online questionnaire and subsequently linked to police-reported crashes. Poisson regression was used to analyse risk of various crash types by three levels of rurality of residence: urban, regional (country towns and surrounds) and rural. Results Compared to urban drivers, risk of crash decreased with increasing rurality (regional adjusted RR: 0.7, 95% CI 0.6–0.9; rural adjusted RR: 0.5, 95% CI 0.3–0.7). Among those who crashed, risk of injurious crash did not differ by geographic location; however, regional and rural drivers had significantly higher risk of a single versus multiple vehicle crash (regional adjusted RR 1.8, 95% CI 1.3–2.5; rural adjusted RR: 2.0, 95% CI 1.1–3.6), which was explained by speeding involvement and road alignment at the time or site of crash. Conclusions Although young urban drivers have a higher crash risk overall, rural and regional residents have increased risk of a single vehicle crash. Interventions to reduce single vehicle crashes should aim to address key issues affecting such crashes, including speeding and specific aspects of road geometry.