Why is car insurance so expensive for young drivers?
Car insurance for young drivers is expensive because the insurance premiums are based on statistics – and, unfortunately, the statistics show that one in five new drivers is involved in a crash in their first year of driving.
That’s far higher than for older drivers. What’s more, young drivers are also twice as likely to claim as more experienced motorists.
The good news is that there are a number of ways for younger drivers to cut the cost of car insurance.
Buying a car? Which ones are cheapest to insure for young drivers?
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, some insurers may refuse cover altogether based on the following grounds:
- Vehicle of choice is too costly
- Vehicle specification is too high
- Too many modifications have been made
- Vehicle engine is too powerful.
Our car insurance comparison service will help you test the market before you commit to buying a new car. Input different types of car into the search to get an idea of what cover for a young person might cost for each model.
Our research found that the cheapest models to insure if you are aged 25 or under include the Volkswagen Beetle, Volkswagen Fox, Fiat Panda, Citreon C1 and the Peugeot 106*.
What types of insurance are available for young drivers?
Third party car insurance is the minimum level of insurance required by law, followed by third party fire and theft (TPF&T), which offers you more protection for your vehicle, and finally fully comprehensive car insurance, which is the most extensive level of cover.
Car insurance for young drivers is expensive because the insurance premiums are based on statistics
It’s important to compare all levels of cover because fully comprehensive is not always the most expensive option, despite what you’d expect. This is because third party and TPF&T have become the reflex choice of risky drivers looking to save money – which has actually prompted insurance companies to raise the price of these policies.
In some instance, this means comprehensive being cheaper, which is why it’s worth running a couple of quotes.
Consider the ‘telematics’ option
Whether you call it ‘black box’ or ‘telematics’ car insurance, this satellite technology offers an effective way to lower the cost of car insurance for young drivers.
It works by installing a small transmitter into your car that relays information on your driving style and driving patterns back to your insurer so they can base the price of your premium more on how you actually drive and less on how people in your age group drive.
In some instances, the information is relayed via an app you download to your phone.
This approach is viewed as a fairer way of pricing policies and has seen many young drivers having their premiums significantly reduced.
READ: Learn more about telematics car insurance.
How to get cheaper car insurance if you are a young driver
There are a number of ways to reduce your premium if you are a young driver. Here are our top tips:
1. Run a price comparison quote
An easy way to make sure you get the best priced policy is to shop around and compare a range of quotes from a number of car insurance providers. By using MoneySupermarket’s comparison tool you can instantly compare car insurance to find the best cover to suit your motoring and financial requirements.
2. Improve your driving skills
The Pass Plus course is open to drivers for one year after they have passed their test and covers areas of driving that are not featured in the driving test, such as night time and motorway driving.
Some insurers offer a discount but it’s worth checking with your specific insurer if they factor in Pass Plus completion when giving you a car insurance quote.
READ: Learn more about Pass Plus.
3. Build up a no claims discount
By being a careful, accident-free driver, you will accumulate a no claims discount for every year of claim-free motoring. This is an effective way to get a reduction on your premium, with insurers offering a discount of up to 75% with five years’ no claims discount.
4. Add a named driver to your policy
Parents can lower their child’s car insurance costs by being a ‘named driver’ on their policy. But it’s crucial that the person who does the most driving in that car is listed as the ‘main driver’.
‘Fronting’ - the practice of telling an insurance company that you are the principal driver of a vehicle when, in fact, it is driven primarily by someone else - 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 may 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.
5. Pay upfront
Another way to pay less for your cover is to pay for it upfront, in one lump sum. While it may be more convenient to pay monthly, you will end up paying more overall due to the interest charged on instalments.
6. Pay a voluntary excess
You can reduce the cost of cover by offering to pay a higher voluntary excess – that is the amount you pay towards the cost of any claim.
However, if you are going to do this you need to keep in mind that after a certain level of excess, the cost of cover doesn’t change, and you must be sure that you can afford the level of excess that you have set for yourself.