Car insurance for new drivers

Car insurance is a legal requirement for drivers in the UK, thanks to the continuous insurance enforcement rules brought in as part of the road safety act of 2006. This means that unless your car is registered as off the road with a SORN, or in the process of being bought or sold, you could be faced with a fine for not insuring your vehicle.

Car insurance is generally more expensive the less time you’ve been on the road – in fact, for those who’ve held their driving licence for less than a year, the average annual cost of car insurance was over £1,700.

This drops with every year you’re on the road – the average annual cost of cover for people who’ve had their licence for 3 years was just over £900, and this fell to less than £700 for people holding their licence for 7 years.*

*Based on fully comprehensive car insurance policies with one driver holding a full UK driving licence. MoneySuperMarket data collected between January and March 2022, accurate as of April 2022.

When you take out car insurance as a new driver, be careful about the additional policies you choose – they do bolster your cover, but you’ll generally need to pay more for the extra protection. Depending on your provider, you’ll usually have the choice of:

• Breakdown cover, which gives you access to roadside assistance if your car breaks down
• Windscreen cover, which lets you claim for the cost of replacing a cracked or shattered windscreen
• Legal cover, which will pay out for certain legal costs related to a claim by you or another party
• Driving abroad cover, which insures you for taking your car overseas and driving in the EU 
• Courtesy car cover, which provides a replacement vehicle for you to use while yours is in repair
• Multi-car cover, which lets you drive more than one car under a single policy
• Personal accident cover, which pays out in the event that you’re injured or killed in a road accident 
• Replacement keys which covers the cost of replacing a set of keys if they’re lost, damaged or stolen
• Wrong fuel, which pays for repair costs if you accidentally top up the tank with the wrong fuel

Telematics cover involves your insurer monitoring your driving habits and adjusting your premiums according to how you drive. They do this through one of three types of telematics tech – either a black box (the most common) installed under your dashboard, a plug-in device or an app on your smartphone.

This is particularly useful for sensible new drivers as it offers a way to get lower car insurance premiums as a reward for driving safely.

While driving courses such as Pass Plus or IAM make you a better driver, they won’t always save you money on your car insurance policy. In fact the average person won’t see any difference in premiums whether or not they have Pass Plus on their licence – but that doesn’t mean it can’t benefit anyone at all. Younger or inexperienced drivers might be able to save a few quid, but it’s better to shop around and compare options – this way if insurers do offer discounts you’ll be able to take advantage.

As a young or new driver, you might be able to knock a few quid off your premiums by adding another more experienced driver to your policy – in most cases this will be your parents. This suggests to insurers that you won’t be the only person driving the car, therefore the assumed risk won’t always quite so high.

While this can be a good way to get cheaper cover, people sometimes take advantage of this by declaring the older or more experienced driver as the ‘main driver’ – when in reality it’ll be the young or new driver using the car more frequently. This is known as ‘fronting’ and is illegal.

You’re likely to get a better deal on your car insurance policy if you pay an annual lump sum rather than in monthly instalments. This is largely because in a way monthly payments are similar to taking out credit – you’ll be covered in full, but without having paid the full amount yet. 

Paying monthly can be useful as you’ll be able to spread the cost out, but you will end up paying a little extra overall.

Excess payments refer to the cost of making a claim – it’s essentially how much you’ll need to put towards the total claim cost before your insurer pays the rest. Volunteering a higher excess fee on top of the compulsory amount indicates to insurers you won’t bother making small and frivolous claims.

A no-claims bonus is what you earn when you go some time without claiming on your policy. The longer you’ve gone without claiming, the more your insurers will knock off your premiums as they’ll see you as less likely to make further claims in the future.

You might consider not claiming for an accident if the damage done to your car is minor and it would be more sensible to pay for the repairs yourself – let’s say the excess you’d need to pay was more than the overall repair costs. This way you’ll preserve your no-claims bonus as well as being better off financially. 

If you’re involved in an accident and you decide not to make a claim, you should still inform your insurer. They’ll keep their records up to date, so they know what condition your vehicle is in and whether this will affect your likeliness of claiming sometime in the future.

If you don’t keep your insurer updated, it’s possible this will void your insurance policy so you won’t be able to claim when you really need to.

You’ll generally be considered a young driver until you turn 25 years old. However your premiums should start to decrease every year from when you start driving, no matter what age – providing you don’t have any claims or convictions to your name.

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