Cheap Car Insurance For First Time Drivers?

We published our “Tiger Watch” results for March last week – these show our estimate of the rate of inflation in the car insurance market. The boffins here at look at hundreds of car insurance quotes each month to come up with the numbers.  Unfortunately they make generally unhappy reading for the UK’s increasingly hard-pressed motorists.  Not only have drivers taken a wallet-bashing from increases in petrol prices over the last year, but drivers renewing their insurance policies during March will have seen an average increase of about 36% compared to their March 2010 prices. Although the rate of inflation has stabilised in the last few months, we are predicting that increases across 2011 will average out at about 20%.  So now is a good time for drivers to shop that little bit harder for a deal when renewal time comes about.  Do give a try – it’s quick, easy, accurate and gives you access to loads of great insurance brands. We update Tiger Watch every month and you may find it useful to check before you start your car insurance search so you can benchmark the kind of year-on-year increase you may have to apply to your current policy price. Whilst Tiger Watch looks at the whole market it’s been well publicised that younger drivers – particularly first time drivers – are being hardest hit when it comes to increases in car insurance prices.  And within this group it’s young men who face the highest prices, often having to pay considerably more for a year’s insurance than they do for their cars! There are a few ways for first time drivers to get cheaper car insurance by making a few adjustments to car usage and levels of insurance cover.  In order to help quantify these savings we’ve run a few quotes through based on an 18-year old male student driving a 7 year old VW Polo 10,000 miles per year who has only recently passed his driving test.  We have assumed that the student lives in the middle of Ipswich (where we are based) and starts by shopping for a comprehensive policy with a voluntary excess of £250.  The table below summarises the steps we took to reduce our initial quote by over a third:

Cheapest Price (£)

Average Top 3 Prices (£)

Initial Price



Reduce mileage to 5,000 per year



Add additional driver (mother)



Switch to “social use only”



Switch to Third Party Fire & Theft



So by limiting mileage, adding mum as a secondary driver on the policy, only using the car socially (this would mean finding an alternative way to “commute” to college) and opting for third party fire and theft cover, it’s possible to reduce the annual premium for a first time driver considerably.  In this case the 36.2% saving on cheapest prices equates to £1,266!  And further savings could be made by increasing the level of voluntary excess.  Remember though that with third party fire and theft cover you will need to pay for any accident damage on your own car, so don’t spend the saving just yet!

This example is based on paying for insurance in a single annual payment.  Opting to pay by instalments pushes the total amount you will pay even higher.  In this case the initial price would increase to £3,976, adding an extra £478 (almost 14%) to your insurance bill.  Always try and avoid paying by instalments – you may find that paying by a credit card (especially a 0% interest card) may save you a packet.

Of course it’s vital that all the information input into car insurance quotes is accurate and honest.  Do not change any details just to try and get a cheaper quote.  Your insurance could be invalidated if you do this.
12/04/2011 10:17:17 Andrew

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