Younger drivers pay dearly for their lack of experience when it comes to car insurance. With young women now paying as much as young men for their cover, youngsters of both sexes – that means those under 25 – often face four-figure premiums that, for many, prove prohibitively expensive. Young people keen to get behind the wheel can cut their costs considerably by choosing the right car, however. Here, we explain how the car you drive can affect how much you pay for insurance and highlight easy ways to keep the cost of car insurance for young drivers down.
How insurance groups work
The more expensive a car is to buy new, the more expensive it will usually be to insure – whatever your age and driving experience. The value of your vehicle is not the only factor that has an impact on how much you pay for cover, though. Insurers divide cars into 50 car insurance groups according to various factors including their engine size and the likely cost of repairs. And the higher the insurance group, the higher the premium. If you are thinking about buying a car, new or second-hand, it therefore pays to check the make and model’s rating before taking the plunge – and to only go ahead if the car is in a low insurance group where prices are within reach. If that sounds a little extreme, remember that the insurance for some cars can be more than the cost of the car itself for young drivers.
How cars are placed into insurance groups
More than 50% of the money paid out in car insurance claims goes towards the cost of vehicle repairs, according to figures from the Association of British Insurers (ABI). Each new passenger car built to a UK specification is therefore classified into an insurance group by a panel comprised of members from the ABI and Lloyd’s Market Association (LMA), based mainly on the amount it will cost to repair. A company called Thatcham, which researches the repair of vehicles of different kinds, provides 70% of the data used by the panel when making decisions. This includes a rundown of the cost of parts likely to be involved in any repairs and the amount of time cars of a particular make and model will take to fix on average. The performance of the vehicle is also factored in, as high performance cars tend to be involved in more accidents and result in more insurance claims as a result. A vehicle’s attractiveness to thieves will also be taken into consideration.
How to choose the right car to keep premiums down
For younger drivers keen to make the biggest savings on their car insurance, a car that falls into insurance group 1 is the best bet. Cars in this insurance group include the Skoda Citigo, the Fiat Panda and the Vauxhall Corsa. Of these, the cheapest option is the Skoda Citigo, which was named MoneySupermarket Car of the Year 2012 due to its low running costs, and should not set you back more than about £10,000 new – even for a top-of-the-range version. Specialist car website What Car? said: “The Skoda Citigo is a fantastic city car that’s good to drive and has a high-quality and attractive interior. It’s cracking value for money, too.” The Vauxhall Corsa, on the other hand, costs between £9,495 and £22,305 new and, according to What Car?, “refined, comfortable and good to drive”.
Other ways to cut cost
Whatever car you drive, one easy way to reduce your motor insurance premiums is to avoid parking it on the road at night. More than 50% of vehicle thefts occur at night, so even if you do not have access to a garage, parking it on a driveway overnight should have a positive impact. Fitting an insurer-approved alarm or immobiliser can also scrape 5% or more off the cost of your annual car cover. The simplest way to slash your costs, however, is to use MoneySupermarket to scour the market for the best possible deal on your car insurance.