Student Car Insurance

Car insurance for Students

Many students have passed their driving test, and some already own a car, by the time they get to college or university. But further education can be expensive - and the cost of student car insurance premiums can stretch budgets to breaking point.

Why are student car insurance policies so expensive?

The first point to realise is that car insurance is expensive for everybody. This combined with fuel price rises has resulted in an estimated 5% of motorists giving up on driving altogether because of the high costs involved. However, car insurance for young and inexperienced is normally even higher than normal. But why are students and other younger drivers being hit so hard?

The difference is down to statistics, which show that young drivers are much more likely to have a car accident than older and more experienced drivers. Indeed, 20% of all drivers are involved in a crash in the first year after they pass their driving test.

Young male drivers pay higher than their female equivalents and this is again down to statistics with males being more likely to make costly claims. However, the premium gap could close next year, however. Thanks to a ruling in the European courts, in December 2012 it will become illegal for insurers to offer different premiums to men and women based on their gender. The anti-discrimination legislation is expected to trigger a 30% increase in car insurance premiums for female drivers, with a 10% fall for men.

So how do students save money on car insurance?

It is illegal to drive without at least third party insurance, so skipping cover is not an option. An easy way to save money on car insurance for students is by using MoneySupermarket's online comparison service to shop around for cheap quotes.

You might also want to consider temporary student car insurance if you drive your car occasionally, perhaps during the holidays. It can work out cheaper because you only pay for the months or weeks that you use the car instead of insuring the vehicle throughout the year. But don't fall foul of Continuous Insurance Enforcement legislation, which came into effect earlier in 2011. If you register and tax a vehicle, it must now also be insured, even if it sits in a garage during term time. The only way round the rules is to obtain a Statutory Off Road Notice (SORN) from the DVLA.

An alternative to short term insurance is a pay-as-you-go policy. The insurer will fit a 'black box' to your car which tracks how many miles you drive - and also whether you drive at busy times, at night, or on dangerous roads. It can even monitor your acceleration and braking speeds.

The black box can have a big impact on premiums because it rewards motorists who drive only a limited number of miles. You can also usually earn discounts if you drive safely, perhaps by avoiding driving in the dark.

Get cheap student car insurance deals

There are still a number of other steps that can be taken to bring down the costs involved with student motor insurance policies: 

• Choose a car in a low insurance group. Insurers rate cars into one of 50 groups, depending on a number of factors including engine size. If your car is in a lower group, you will almost certainly pay a lower premium than someone with a car in a higher group. To find out a car's group rating visit www.thatcham.org
• Don't make any modifications to your car. Even extra headlights might fall foul of the insurer's rules. This is of extra importance when it comes to student car insurance deals, with the 'boy-racer' stereotype prevalent in insurer's minds.
• Fit security devices such as an approved alarm, an immobiliser and a tracking device. A secure car is less likely to be stolen and you should get a discount on your premium. 
• Complete the Driving Standards Agency's Pass Plus course, which is intended to enhance the driving skills of newly-qualified motorists. Some insurers will knock as much as 35% off your premium if you complete the course - more than enough to cover the course fee. 
• Add an older, more experienced driver to your policy, such as a parent. The insurer will work on the basis that the driving will be shared and reduce the premium accordingly. But never ask someone to insure the car in their name if you are the main driver. The tactic is called “fronting” and is illegal. 
• Choose a higher voluntary “excess”. The excess is the amount you pay towards a claim and all policies come with a compulsory excess, typically up to £250. If you agree to pay a higher voluntary excess, you should pay a reduced premium. But be realistic. Don't go higher than you can afford. 
• Pay upfront. It can be convenient to spread your premium over monthly instalments but it is almost always more expensive. 
• Consider third party or third party fire and theft cover. Most car insurance policies offer comprehensive cover, but third party is the legal minimum - and might be enough if you car isn't worth very much. But make sure you compare different quotes because premiums for third party insurance are not always cheaper.