Guide To Car Insurance For Young Drivers
This Tiger.co.uk car insurance guide has been written with young drivers in mind. It is a well documented fact that young drivers pay more for their car insurance than older drivers, with insurance premiums generally being much higher for those under the age of 23. For a fuller introduction to car insurance in general (and an explanation of some of the jargon used) see our more general Tiger Guide to Car Insurance.
Why is insurance more expensive for younger drivers?
Quite simply, younger drivers represent a greater risk for insurers as statistically they are more likely to have an accident. Research* shows that:
- 1 in 5 drivers crash in their first year of driving
- Male drivers under 21 are 10 times more likely to have a car accident than male drivers over 35
- 1 in 3 male drivers aged 17 to 20 crash in the 2 years after passing their test
- An 18 year old driver is more than three times as likely to be involved in a crash as a 48 year old.
All this means that insurance companies tend to pay out more on policies held by younger drivers and therefore, not unnaturally, they charge this group more for their insurance cover.
Younger women drivers have not historically been penalised to the same extent as younger men but this is likely to change as a result of a recent EU gender ruling that comes into effect in late 2012.
How much more do young drivers pay?
This will depend on the wide range of factors that insurers use to calculate premiums, including age, car type, postcode, occupation, driving history and cover type. In order to provide an indicative example we have run a series of quotes through Tiger.co.uk in order to generate relative pricing for a male and female driver from the ages of 19 to 22. These assume that the driver stays accident- and conviction-free over this period.
|Age||Premium Index(age 22=100)|
This table indicates that in this example a newly qualified 19 year old driver can expect to pay over 4 times more for their car insurance than a 22 year old with 3 years no claims bonus and a clean driving licence. In hard money terms this often means that newly qualified young drivers could be paying over £2,000 - £3,000 for their annual car insurance policy.
Why do young drivers need insurance?
Quite simply all drivers are required by law to have at least the basic (Third Party) level of insurance cover in order to provide protection against a driver’s liability to other road users and pedestrians or other parties in the event of an accident. So if you cause an accident whilst driving, the insurance policy will at least provide appropriate compensation to anyone else who is injured or who has their property (including their vehicle) damaged as a result of the accident. Because this compensation could be considerable, for most of us this makes car insurance an economic as well as a legal necessity.
Higher levels of insurance cover provide increased levels of protection. Third Party Fire and Theft cover will additionally compensate you for any fire damage, or if your car is stolen, or if your car is damaged as a result of its theft. Comprehensive cover will usually add to this any loss or damage to your vehicle, windscreen cover, personal effects cover, accidental damage and medical expenses. Different policies offer different levels of cover so be sure to check exactly what you are and are not covered for.
Penalties for non-insurance of a vehicle can include fines of up to £5,000; endorsement of a licence with 6 to 8 penalty points; and disqualification from driving. The Department for Transport estimates that there are about 300,000 convictions for uninsured driving each year and further crackdowns in this area have been announced.
How can young drivers get cheaper car insurance?
So, we know that car insurance for younger drivers costs more than for the average driver but that it is mandatory. Here are 20 tips to help young drivers find cheaper car insurance. They may not of course be equally applicable for all young drivers and we do not advocate that any driver shops for their insurance based solely on its price – it is important to get the right policy as well as the right price. But hopefully the application of some of these tips will help make your car insurance more affordable.
- Forget the Porsche
Think about insurance before you buy your car. Put your dreams of a Porsche or Aston Martin to one side for a few years and choose a car from a low insurance group (there are now 50 insurance groups and group 1 has the cheapest cars to insure – you can check the group ratings for cars via the Association of British Insurers website). Essentially, less powerful cars are cheaper to insure so keep the car fairly basic for the first few years of driving. The age of your car will also influence your premium but probably not by as much as you may think. For a smaller car the price of an insurance policy for a new model could be around 10% higher than for a 7-year old one. Factor this into your planning. An added bonus is that cars in cheaper insurance groups tend to have better fuel consumption, lower emissions and therefore lower road tax –providing significant savings on your motoring.
- Keep it simple
Don’t buy a car with modifications or add any yourself. Almost invariably the addition of things like body kits, alloy wheels, engine modifications and even stripes can add to the cost of your insurance. A single modification could easily add around 20% to your policy price. Multiple modifications could push the price up by 80% or more for younger drivers.
- Shop around, every year
There are hundreds of different car insurance brands and whilst not all of them will provide a quote for younger drivers, there will probably be plenty to choose from. Make sure you compare prices from a range of companies – Tiger.co.uk is a good place for young drivers to compare quotes from over 100 brands including many that specialise in providing policies for younger drivers. And shop around every year rather than just accepting the renewal quote from your existing insurer. One word of warning – make sure that you are comparing policies on a like-for like basis as things like compulsory excess and policy extras vary from insurer to insurer.
- Add mum or dad
Where possible add a second driver to your policy. If you live at home it could be a parent or sibling. If not it could be a partner or spouse. Either way having a more experienced driver or one with a better accident or conviction history than you may reduce your premium. Adding an additional driver to a policy does not always reduce prices but it is worth investigating. Do not, however, try to insure your car in the name of another driver and then add yourself as an additional driver. This “fronting” is illegal and can lead to invalidated policies, fines and licence endorsements as well as a possible struggle to buy insurance in the future.
- Love your NCB (No Claims Bonus)
The best tip for any young driver looking to lower car insurance costs is to get and keep a no claims bonus. For every year of claim-free motoring you get under your belt, insurers will reward you with a discount. For most young drivers this means that although your premium will be much higher for your first year of motoring, it should drop relatively quickly if you don’t claim on your policy (and keep a clean licence). Most insurers offer a 30% discount for 1 years’ NCB, rising to 65% after 5 years. Some insurers may also offer a NCB “accelerator”, allowing you to earn your NCB within your first year of motoring. Safe driving saves money!
- Stay legal
You will be required to disclose any driving convictions as part of the insurance quote process. Any driving conviction will usually lead to insurers charging you more for your insurance so keep those points off your licence. You may even find it more difficult to get insurance cover at all. Breaking driving laws can also lead to a fine or even a driving ban. Clearly there is also a safety issue to consider too – both to you and others.
- Go back to school
The Pass Plus is a post-driving test certification for new drivers that could reduce your insurance premium by up to a third. It typically costs around £100 to £150 and covers things like driving at night, on motorways and in town traffic. There is no test at the end of the Pass Plus course and you may even find that some local authorities will pay for up to 50% of your course (check the Direct.gov website for further details).
- Drive less, pay less
Quite simply if you are able to reduce your annual mileage you will usually reduce your insurance bill. On a test quote that we ran for a young driver the reduction in annual mileage from 10,000 to 5,000 reduced the insurance cost by over 15%. One reason for this was that different insurers wanted to quote for lower mileage drivers. So it pays to think hard about how many miles you will drive during your first few years of driving and to keep this number as low as possible.
- Take the bus
If you limit your car usage you can again save money on your insurance. If you opt for “social use only” on your insurance and find another way of getting to work, school or college, you should find that this will shave a few more pounds off the cost of your insurance.
- Consider telematics
No this is not a new children’s TV show! Telematics is the technology of sending, receiving and storing information via telecommunications devices. When applied to car insurance it refers to the gathering of driving information via a small device (about the size of a mobile phone) that is fitted to your car. The data generated via telematics (how far you drive; when you drive; how you drive) is used to assess your insurance risk and to help with the calculation of your insurance premium. There are an increasing number of specialist and mainstream insurers who are adopting this technology and telematics-based insurance can provide cheaper car insurance quotes for young drivers. Insurers may also want to place mileage or time of day restrictions on drivers and so it will not suit everyone. Many people in the insurance industry are predicting significant growth for telematics-related insurance and it is definitely worth consideration.
- Play hard to get
If your car is harder to steal or break into there is less chance of you making a claim. This is why insurers tend to reward drivers who protect their cars with additional security devices (approved alarm and immobiliser systems) with a reduction in the cost of their insurance. Other security measures that may help your insurance rating are better lock systems, glass etching (where the vehicle’s registration number is etched into the window glass and having a visible Vehicle Identification Number (VIN). Obviously anything you can do to deter thieves also helps to protect your no claims bonus.
- Hide your valuables
This will sound obvious but never leave valuables on display in your car. Again this will reduce the risk of the car being broken into and protect your hard-earned NCB.
- Park with care
Keeping your car on a driveway or in a garage when you park it for the night will usually lead to a lower car insurance premium that parking it on a street because this reduces the risk of your car being stolen or vandalised.
- Cover up
Third Party? Third Party Fire & Theft? Fully Comprehensive? You will need to decide the level of cover that best suits your needs. Do not automatically assume, however, that Fully Comprehensive cover is always the most expensive option. For many drivers, including young drivers, this may well NOT be the case. Make sure you understand the difference between the different levels of cover (see the Tiger Guide to Car Insurance) before making any final decision – Third Party Only cover, for example, could leave you with a large bill if your car is involved in an accident.
- Volunteer more
Voluntary excess is the amount that you agree to pay in the event of a car insurance claim. This will be in addition to any compulsory excess that your insurer stipulates within your policy. Increasing your voluntary excess should reduce your insurance premium. Doing this, however, will mean that you will have to pay a bigger share of the bill if you have to make a claim. Therefore you will need to work out whether making a saving in this way is a risk that you can afford to take.
- Get a new job (description)
A key element that insurers look at when calculating insurance premiums is occupation. Insurers all use the same set of occupation codes issued by the Association of British Insurers. There are hundreds of different occupations and business types listed and whilst you must always be honest in defining your occupation, you may find that you can honestly use two or more job descriptions and that one of these delivers a cheaper insurance quote than another. For example there are currently nine different occupations featuring the word “student”.
- Spreading the pain can hurt more
Most insurers will offer the option of paying by monthly instalments and for lots of young drivers this provides a more affordable way to pay. But make sure you look at how much extra you will be paying to do this. Typical APR rates can be over 40% for some insurers’ instalment schemes and can easily add hundreds of pounds to your overall insurance costs. If you are able to pay for your insurance in a single instalment this will normally save you money. If not then you may find cheaper interest via a bank loan or a credit card – especially if you can use a 0% interest credit card. (You can check out the latest credit card deals on Tiger.co.uk).
- Buy what you need
Your car insurance price may include “extras” that you don’t need and you may find that these are optional extras that you are paying for. Take some time to think about whether you would really need that courtesy car in the event of an accident - could you take the bus or get a lift? Can you get any breakdown cover you need directly from a provider at a better price or can you do without it altogether? Do you understand exactly what your legal cover will and will not provide for you? Essentially make sure that you are only buy what you need.
- Car sharing
If a car in your household is shared equally between drivers you will get a cheaper insurance quote if the more experienced driver (or the driver with a better driving record) is named as the main driver of the car, with the other as an additional named driver. Only do this, however if the car is genuinely equally shared – otherwise you and the other party may be guilty of illegally “fronting” an insurance policy. However, please note any young driver on someone elses policy will not be earning any no claims bonus.
- Try the Tiger
Following all of this advice should save you a packet on your car insurance, even if you are a younger, less experienced driver. You will still want to make sure you get a great deal and a great way to do this is to get your car insurance quotes from Tiger.co.uk. Our comparison site is quick and easy to use and provides access to over 100 insurance brands, many of which specialise in providing cover for young drivers. You can also use Tiger to check out deals on short-term car insurance (maybe for your holiday driving), breakdown cover, travel insurance, credit card comparison and a range of other products and services. Try the Tiger today!
We hope that you find this guide useful and that it helps in getting you great insurance at a great price. Please forward a link to the guide to any friends and family that you think may benefit from it.
Source: ROSPA, Driving Standards Agency.