Young Drivers’ Car Insurance

Getting on the road is a landmark for young people and most can’t wait to get behind the wheel. However, if you are a young driver do you have to pay over the odds for car insurance or are there ways to bring premiums down?

How much do young people pay for car insurance?

According to research by a comparison website in November 2009, £5,731 is the average cost of getting a young person on the road based on the cost of a provisional licence, driving lessons, driving test fees, the average cost of the car, car tax and car insurance. However, remarkably one year’s car insurance makes up two fifths of the total bill with the average cheapest quote for 17-year-olds at £2,455.

The reason car insurance costs are so high for young motorists is because typically young people are more prone to accidents than their peers. For example, in 2008, the Driving Standards Agency reported that while only one in eight car licence holders was under the age of 25, one in three drivers who died on the UK’s roads was from this age category. What’s more is that one in five new drivers has a crash within six months of passing their driving test.

However, just because the averages are high it doesn’t mean that you can’t do something to bring premiums down.

How can young people find competitive deals?

As quotes are typically higher for young people, shopping around for a competitive deal takes on added importance. Young drivers must take advantage of the fact that the car insurance market is highly competitive by comparing as many deals as possible.

This can be done relatively quickly by using a comparison website. The leading comparison websites can compare quotes from as many as 120 car insurance companies so you can have peace of mind that you’re getting a thorough overview of the market.

When using a comparison website you should compare not only the premiums offered by insurance companies but also the levels of cover available to ensure you’re receiving value for money. Broadly, car insurance cover is available in three levels:

  • Third party only: This covers liability for injuries to others, damage to their property and liability while towing a caravan or trailer.
  • Third party, fire and theft: Third party cover plus protection for your own vehicle against theft, attempted theft and fire damage.
  • Comprehensive: Third party, fire and theft cover plus repairs for your own vehicle in the event of an accident (subject to policy exclusions). Policies vary between insurance companies but typically include windscreen cover, accidental damage cover, cover for personal effects and medical expenses.

Third party and third party, fire and theft policies are cheaper than comprehensive policies on a like-for-like basis because the level of cover you are receiving is much less extensive. As such these policies are well-suited to young drivers who may find comprehensive cover is too expensive, or who drive relatively inexpensive vehicles and aren’t as worried about protecting it in the event of an accident.

Should you opt for comprehensive cover then be careful about the policy options you choose – some features are offered as ‘standard’ while others are ‘optional extras’ for which you pay an additional premium. Carefully weigh up what cover you do and don’t need – for example you may not need a courtesy car if you already have access to a second vehicle.

How to keep car insurance premiums down

Insurance companies assess premiums on a number of risk factors including your address, your personal circumstances, the vehicle you drive, your driving history and your annual mileage. Reducing the risk of making a claim can in turn reduce premiums – here are some tips:

  • Agree to a mileage limit: The fewer miles you drive, the less likely you are to be in an accident so consider agreeing to a mileage cap.
  • Build up a bonus: Most insurance companies offer no-claims discounts that could reduce premiums by as much as 60 per cent after four or more years. As a new driver you won’t have any previous no-claims bonus but some insurance companies do offer rapid bonus schemes allowing you to earn a full year’s discount in less than 12 months during your first year of driving.
  • Buy carefully: Generally, older cars with smaller engines qualify for cheaper premiums as they cost less to repair/replace and are less likely to be driven at excessive speeds. Use the Association of British Insurers database to see which insurance group applies to the vehicle you are interested in – the lower the group, the lower your premiums should be.
  • Increase security: You can reduce the risk of car theft / vandalism by parking your car in a garage overnight and fitting a car alarm, immobiliser or tracking devices. Consult your insurance provider about which systems earn the largest discounts.
  • Increase your excess: Your excess is your contribution to a claim and setting it at a high level can reduce premiums – but be careful to keep it at a level you can comfortably afford.
  • Pay annually: Many insurance companies charge interest on monthly payments so consider paying your insurance premiums annually.
  • Take the Pass Plus: Once you complete your practical driving test you may want to take the Pass Plus course – with some insurance companies it could earn you a discount in the region of 35 per cent and financial assistance with the cost of the course may be available from your local authority.