Premiums are particularly steep for the under-21s, with male drivers deemed to be higher risk than their female counterparts. Insurance premiums can run into thousands of pounds and in some instances the cost of insurance may even be greater than the value of the car.
However there are steps young drivers can take to minimise the cost of insurance, so let’s ask Steve Sweeney, who is head of insurance here at moneysupermarket.com, for his top tips.
Q1: So Steve, obviously insurance can be extortionate - particularly if you’ve just passed your test - but what can newly qualified drivers do to help bring their costs down?
Steve Sweeney: Well there is a number of things that you can do, one good tip really is to take the Pass Plus test. A lot of drivers when they are learning to drive don’t get the experience on motorways, dual-carriage ways, night-time driving etc. and what you can do, you can take this pass plus test – it costs about £100 – and it could shave as much as £350 off your premium, because it is just proof that you are a safer driver then the driver that has just learnt to drive in the standard way.
Q2: Because that’s one of the reasons why young drivers pay so much isn’t it – it’s because they’re inexperienced and all the claims statistics show they’re more likely to have an accident than someone who has been driving for a longer period of time?
SS: Yes, absolutely I mean younger drivers disproportionately pay more for insurance, but the reason they pay disproportionately more is they are more likely to have an accident and therefore be a burden on the insurance industry. So for that reason they are likely to pay higher premiums - particularly male drivers who are more likely to have an accident.
Q3: And we all know the stereotypical ‘boy racer’ car and things like that, but again that’s something: the car you drive as a new driver can make a massive difference can’t it? Get an old banger for a few years just to build up your no claims, and it’ll be a) cheaper to insure and b) you’ll be able to get the car of your dreams sooner, I guess!
SS: Yes, I guess every young guy wants a ‘hot hatch’, a Golf GTI or something like that - the reality is they are going to be very difficult to insure. My advice would be to look for cars in lower insurance groups, lower engine sizes, to get yourself started really - get your foot on the ladder so to speak - and then increase from there, as your no claims increases over the years really.
My advice would be also, to avoid the temptation to modify the car, because putting on fancy alloy wheels or a spoiler or something like that, that is just going to add cost to our premium. I would urge younger drivers to pick a base model car with a low engine size, avoid the temptation to modify and that will then make your insurance more affordable.
Q4: And it’s also – if you can afford it – worth getting your own car and insuring it in your own name rather than just adding yourself to your parent’s car and driving that occasionally isn’t it, because again it’s a good way of building up a no-claims discount quickly.
SS: Yes and I guess really there are some insurers out there who will give a 10-month insurance, so its like a no claims bonus accelerator is a good way of describing it. So it allows you to accrue no claims bonuses quicker. So rather then waiting 3 years its 30 months, that’s going to shave 6 months off the amount of time you have to wait to generate that no claims, so there is an advantage in taking those bonus accelerator plans as well.
Q5: There is one thing that parents and drivers alike should watch out for though isn’t there, because if the cars in your name it can be perhaps tempting for a parent to insure themselves as the main driver because their insurance is a lot cheaper, but that’s illegal isn’t it if their son or daughter is the main driver?
SS: Yes, again an insurer will quote on risk, and if you are effectively ‘fronting’ - i.e. being inaccurate as to who the actual lead driver of the car is, pretending it’s the parent when actually it’s the son or the daughter driving - then that’s illegal and that is just going to invalidate your insurance.
You only really need insurance for when something goes wrong and if something was to go wrong and you found you weren’t insured then clearly the insurer would be investigating whether that car had been fronted or not and therefore the insurance could be invalidated. So I would absolutely urge people not to front on their insurance.
Q6: Is there anything else that young drivers can do to help bring the cost down?
SS: Firstly shop around - that’s the best bit of advice. The fact that you are watching this video would indicate that you are going to be shopping around because you are on our website, so I would urge you to use the question set and the quote engine and make sure you have accurately given answers to all of the questions and you will get a results table which will show you from the cheapest price to the most expensive. Then you will be able to make an informed choice as to the policy you take.
I would also ask younger drivers in particular just to look at what cover type is included within their policy - there may well be elements of the cover that they don’t quite need at this particular point, for example breakdown cover and some of the add-ons. If it is proven to be very, very expensive that is one area you could perhaps save some money on your insurance premium.
Q7: And I guess if you’ve got a low value car, an older car, you might not need fully comprehensive insurance, third party fire and theft or something might be adequate?
SS: Yes, the thing about third party is sometimes it’s a bit of a misconception because a third party car is generally a car that somebody wouldn’t be that worried about - so I guess an ‘old banger’ mentality really - so they are more likely to potentially drive it in the insurers eyes as an old banger. So in some instances it can actually be cheaper to insure your car fully comprehensive.
So what I would do is urge customers and particularly young customers to run the quote based on third party, run a quote based on fully comprehensive and then compare the two. They may well be surprised that they can insure fully comprehensively for not to much price difference, or maybe able to save some money.
Q8: And for a lot of young drivers they may not be doing that many miles a year if they’re just driving to college and back, or at university or something, so that’s another way that you can help bring premiums down is to state an annual mileage – and obviously the lower the mileage the less you pay?
SS: Yes, exactly that. The more you are in the car the more you are likely to have an accident or a problem so mileage is a key rating factor so ensure that you put an accurate mileage in first of all, but clearly guessing at the mileage and saying its 20,000 when really its 10,000 or 10,000 when really its 5,000. Putting an accurate mileage is important.
A good way of working it out is just to work out all the likely journeys you are going to make, multiply them over the month then multiply by 12 which gives you a yearly figure and that will give you your annual mileage, so its just important you put an accurate mileage down - but reducing the mileage is also important because the less you use the car, the cheaper your insurance is going to be.
But again customers and particularly younger customers should avoid going over that particular mileage, so don’t put on the website you’re going to do 1,000 miles when you are going to do 5,000 miles because that will invalidate your insurance so you mustn’t do that either.
Q9: Is there anything else that drivers can do, because what about learning to drive when you’re a bit older? Because I know I had my first lesson on my 17th birthday and obviously a lot of people are desperate to learn to drive, but is there any financial benefit of waiting a few years and perhaps not learning to drive until you’re in your early 20’s, will it be cheaper to insure then?
SS: Yes, I mean there are tipping points with age in terms of rating factors, and what I mean by that is clearly the older you get there is a perception in the insurance industry which is backed up by statistics that says you become a safer driver. The reality is its down to experience and its down to hours and days and months and years on the road really, and the build up of that experience is what an insurer will be looking for.
But somebody learning to drive at, say, 30/35 compared to a 17 year old, they’re unlikely to drive as fast therefore they’re less likely to have an accident. So that will be taken into account, but really it about getting the experience.
Q10: And for a lot of people it’s just too good to bother waiting for isn’t it?!
SS: Absolutely, it’s about freedom and it’s about getting mobile!
CF: Alright, thanks very much Steve.
SS: No problem, thank you.