For many of us, learning to drive is a difficult and costly experience, so finally passing the test and getting your licence is a huge relief! But despite the excitement of tearing up your ‘L’ plates and the freedom to drive by yourself, the harsh reality is that running your own car as a young driver can be really expensive. Unfortunately, car insurance for young drivers can run into the thousands of pounds, simply because insurers assume you will have a higher risk of an accident compared to more experienced drivers.
Fortunately, though, there are ways to reduce your car insurance premiums as a young driver. In this guide, we explain why car insurance for young people is so expensive and offer some top tips for finding cheaper car insurance policies.
How much do young drivers pay for car insurance?
The average young driver in the UK aged 18 to 20 paid £973 a year for their car insurance in 2017, according to the Association of British Insurers. This is almost four times the amount the average 66 to 70-year-old driver would pay, at just £260 a year. However, for many young drivers, a quote of £973 would be an absolute bargain, with some paying up to two or three thousand pounds a year! Figures published by the BBC in 2017 actually claim the average premium quoted to 17 to 20-year-old drivers is far higher, at a shocking £3,878 a year.
In reality, it all depends on numerous individual factors including your age, the car you drive and where you live, to name just a few. Most young drivers should be able to find quotes towards the lower end of those figures, but for 17 or 18-year-old drivers especially, it can be almost impossible to find insurance for less than £1000 a year. Sadly for many young drivers, car insurance can cost more than the actual car itself.
Why young drivers pay more for car insurance
Insurance companies quote such high prices for young drivers primarily because of the increased risk of an accident. This is, of course, logical seeing as young drivers only have a small amount of real-life driving experience and still have plenty of learning to do on the roads. Young drivers are also often deemed more likely to drive dangerously, particularly those who drive high performance or modified cars.
Another major reason young drivers pay more is that they haven’t built up a ‘no claims bonus’ like older drivers have. A no claims bonus, is as it sounds, a discount you receive on your insurance for each year you go without making a claim. Simply having more years of experience (namely more ‘no claim’ years) on the road is why older drivers typically receive far cheaper car insurance quotes.
How to get cheaper insurance as a young driver
1. Drive a low performance, unmodified car
One of the most important factors in an insurer calculating your insurance is the type and model of car you drive. Whilst we hate to sound like nagging parents, choosing a small, low-cost car such as the Ford Ka or Peugeot 107 will obviously cost you far less to insure than a high spec Audi or boy racer favourite like the Nissan Skyline.
Car modifications such as engine tweaks, altered suspension, spoilers or body kits can also whack up your premiums, so avoid the temptation to alter the performance or appearance of your car. A cheap, sensible and unmodified car might not do much to impress your mates, but your insurer will reward you with cheaper insurance - so just think of all the extra cash left in your bank account!
2. Pay annually instead of monthly
If you can afford to, a really easy way to reduce your car insurance is by simply paying for a year up front. Car insurance companies will reward you with a discount for the larger payment and the reduced chance of missed payments throughout the year.
3. Increase your policy’s excess
Another tip is to voluntarily increase your insurance policy’s ‘excess’ which is the amount you must pay any time you make a claim on your insurance. Choosing to increase your excess will reduce your insurance costs because it makes it less worthwhile for you to make a claim, particularly for smaller incidents. It also means you would receive less compensation if you were to claim, but in return your car insurance will be cheaper overall.
4. Add an experienced driver to your policy
One easy way to reduce your insurance policy and the perceived risk with your insurer is to add an experienced driver to your policy.
By adding a parent or family member with plenty of driving experience and no claims for example, you could trim your premiums by a significant amount.
5. Install a ‘black box’ to monitor your driving habits
Thanks to clever technology called ‘telematics’, some insurers can provide you with a black box device to install in your car or an app to download to your smartphone. This device (or app) will monitor and track the standard of your driving by recording how fast you drive, how harshly you accelerate and break and how you fast you take corners for example. It also monitors the times of day or night and the number of miles that you drive in order to give you an overall score out of 100. If you drive safely, you should gain a high score and therefore receive a discount on your insurance premiums.
‘Black box insurance’ is becoming increasingly popular with young drivers as a way to access cheaper car insurance deals. However, it’s worth noting that it could in fact go against you if you don’t drive safely and may actually increase your premiums!
6. Park your car off the street if possible
If you have access to an off-road parking spot such as a driveway, or even better, a secure garage, you can trim your insurance policy cost by simply informing your insurer that you park off the street. Not only does it reduce the chance of your car being stolen, but also from accidental damage that could occur from parking on a street. Insurers see off-road parking as less risky and will reduce your premiums accordingly.
7. Complete advanced driving qualifications
One of the more costly and time-consuming ways to reduce your insurance costs is to take advanced driving courses like the ‘Pass Plus’ qualification. This government set course involves taking extra driving tuition that covers more advanced driving scenarios including:
- Driving at night
- Driving on dual-carriageways and motorways
- Driving in difficult weather conditions
- Driving in towns and rural areas
The course usually lasts six hours and at the end, you’ll receive a certificate which you can send to your insurer for a potential discount. Not all car insurance companies offer a Pass Plus discount however, so you’ll need to shop around to find one that does.
The course itself may set you back between £150 to £200, depending on the instructor and the number of hours you sign up for. However, this invaluable additional driving experience will help insurers see you as a safer driver regardless of whether you receive a discount as a direct result of the qualification.
All material on this page and the selectra.co.uk website is for information purposes only and does not constitute any form of financial advice. Selectra.co.uk is not responsible for any consequences that might arise from your use of the information provided.