The young driver car insurance market explained

By

Passing your driving test is a rite of passage, and for many young people it's a hard-won achievement. Saying goodbye to your L-plates is always cause for celebration - but sadly the cost of car insurance for under-21s can quickly crush any new driver's party spirit.

However, there are things you can do to push the cost of a young person's insurance policy down. Here are our top tips for finding cheaper car cover for under-21s.

Choose your car carefully

If you're about to buy your first car, of if you're a parent looking to help your son or daughter purchase a vehicle for the first time, it's important to research your insurance options before checking out makes and models or organising test drives.

Not only will insurance be more expensive for some cars than for others; you may find that insurance companies refuse altogether to cover young drivers when their vehicle of choice is too costly, has too high a specification, has too many modifications or has too powerful an engine. 

To avoid disappointment - not to mention eye-watering insurance premiums - use our car insurance comparison tool  before you start shopping. Input different types of cars into the search to get an idea of what cover for a young person driving a variety of different cars might cost.

Add a named driver to your under-21's insurance policy

You could help to lower your son or daughter's car insurance costs by being a named driver of their vehicle - but ensure you resist the temptation to decrease the cost of their policy further by claiming you are the main driver of the car if you are not.

'Fronting' - the practice of telling an insurance company that you are the principal driver of a vehicle, when in fact it is used by someone else for the majority of the time - is a form of insurance fraud, and could have serious consequences. If you are caught fronting when you try to make an insurance claim, your insurer will refuse to pay out and you could face prosecution. It's also likely that you would be refused insurance cover in the future.

As a general rule of thumb, if a young person uses a car to drive to or from work, school or college on a daily basis, for insurance purposes they should be named as the main driver of the vehicle.

Consider a young drivers insurance scheme

Young drivers insurance schemes - sometimes referred to as pay as you go, 'black box' or telematics insurance policies - are products specifically designed to help cut the cost of cover for under-21s.

All insurance policies are priced in line with risk. This means the company you buy cover from will assess how likely they think you are to make a claim, and will then charge you an appropriate price for your cover. Because young people are statistically more likely to have accidents than older drivers, their insurance costs tend to be higher across the board.

Young drivers insurance schemes use recording devices to gather extra information about when, and how well, individual customers are driving their cars - with a view to assessing their likelihood of claiming more accurately and offering them more personalised car insurance premiums.

Telematics insurance schemes for young people often result in good savings, provided driving habits and style  suggest you are less likely to make a claim. However, if an individual isn't as safe a driver as they believe, they're unlikely to see their insurance premium decrease and could even drive it up.

It pays to shop around for a young drivers insurance product, as many mainstream insurers now offer them. Find out more about black box insurance and compare deals using our car insurance comparison tool.

Drive safely and stay within the law

Finally, once you're insured and on the road, the simplest way you can help to reduce your future car insurance costs is to drive safely and stick to the rules of the road.

If you're able to avoid convictions for driving offences and can build up a no-claims history, you'll help to show that you're a sensible driver who is less likely to need an insurance pay out - and, over time, this is the single easiest way to stay on top of the cost of car insurance

†82% of shoppers obtained a quote in 5 minutes or less. Source eDigitalResearch December 2012.