Car insurance for young drivers

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How young drivers can get the best deals on car insurance

Last updated: 29 September 2020

Car insurance for young drivers is notoriously expensive, but there are ways a new driver under the age of 25 can cut the cost of insuring their first car.

As a young driver you're likely to have to pay a high premium for your car insurance, even if your vehicle is small and inexpensive. That's because data shows that first-time drivers are more likely to have accidents and make expensive claims.

So even if you're a careful new driver, you're likely to have to pay a great deal more for your insurance than your parents, for example, even if you are driving the same make and model of car.

How expensive is car insurance for young drivers?

The latest data shows that average premiums for young drivers under the age of 25 costs an average £1,912 for an annual policy, according to the Consumer Intelligence car insurance price index.

Under-25s premiums have stopped rising in the past 12 months, partly because there were fewer cars on the road during the Covid-19 pandemic, and partly because more drivers are choosing telematics policies.

Even so, £1,912 is a hefty sum to find if you want car cover. But it is the price young drivers will typically face because they are considered high risk customers.

Why is young driver car insurance so expensive?

Statistics show that young drivers are more likely to be involved in accidents than drivers over the age of 25, and the resulting claims are more expensive. This means that even if you're a careful driver of an inexpensive car, your insurance quote is likely to be high.

AA research shows that one in eight British drivers is aged 25 and under, with a quarter of all drivers involved in serious traffic collisions within this age group.

As well as being more likely to have an accident, young and new drivers often have to pay more for their car insurance because they haven’t had the chance to build up a no claims bonus over time.

More passengers mean larger car insurance claims

Young drivers often have other young people in the car with them when have accidents. The passengers are third-parties and the driver’s insurer has to pay if any passengers are injured as well for any other vehicles and people involved in the crash.

A life-changing injury for a young person will cost your insurer a lot more than the same injury for an older person. The insurer has to pay out enough money to care for the injured person for the rest of their lives. Young drivers injure more young people than older drivers.

What about insurance for new drivers?

It's not just young drivers that are faced with sky-high premiums, new driver insurance is similarly expensive. New drivers of any age are often cited in statistics that show them being more likely to have an accident than their more experienced counterparts.

So even if you're older, but are new to driving you may find your premiums will be more expensive than what your peers pay, and may be more akin to what young drivers pay.

How to find the best car insurance for young drivers

There are a number of hacks you can draw on to get cheaper car insurance. Some you won’t be able to take advantage of it you have already bought a car, but they are all worth bearing in mind in any case.

Some cars are more expensive to insure than others

Many factors can impact the cost of young driver insurance, including the make and model of the car.

Insurers place cars into individual insurance groups from 1 to 50. Typically, if the car is in group 1 it will be amongst the cheapest to insure and 50 will be the most expensive. While you can’t change your age, you can choose a car which is less expensive to insure in order to cut down on the cost of young driver motor insurance.

Cars are rated on the following factors:

  • how quickly the car accelerates and its top speed

  • the value of the car as new

  • the security features the car has

  • how much it will cost and how long it will take to fix if it is broken

  • how much the individual parts cost

Steer clear of modifications

Car modifications, such as alloy wheels and body kits, often appeal to young drivers wanting to personalise simple-looking hatchbacks or medium-sized cars.

However, avoid them if you want to save money on your car insurance — modifications are known to increase premiums by hundreds of pounds because the extras you add to your car can make them more attractive to thieves and can add to the cost of claims.

If your car has been modified, run a car insurance quote with the modifications included, and again without. If the difference is significant, think about reversing the modification, if possible.

Increase your excess

Choosing to pay a higher voluntary excess — the amount you pay upfront if you make a claim – could significantly lower the cost of young driver insurance.

However, think realistically about whether you could afford to pay that lump sum if you end up needing to make a claim. The excesses on new and inexperienced driver insurance policies can be several hundred pounds.

Although it can be a way to lower the cost, it could also leave you out of pocket in the event of an accident, when you’ll probably need all the cash you can get hold of to buy a new car.

Don’t assume third-party cover is cheapest

The minimum level of cover to legally drive in the UK is third-party car insurance. This will cover costs in car repairs or injuries to any third party affected by an accident you cause.

With a third-party car insurance policy you will also not be compensated if your car is stolen or damaged. If you live in an area where theft and vandalism is common then you might want to consider getting third party, fire and theft cover.

As with regular third-party insurance however, third party, fire and theft won’t cover any injury costs or repair costs to your vehicle in the event of an accident. To get this level of cover, opt for a fully comprehensive insurance policy.

Comprehensive car insurance might be better all round

Many people assume that because comprehensive car insurance provides more cover, it will be more expensive.

In fact, according to the Association of British Insurers, the average third-party, fire and theft premium is more expensive than comprehensive cover because it is often chosen by younger drivers with a tendency to make larger claims.

It therefore pays to compare quotes with different levels of cover before you buy.

Add an experienced second driver to the policy

Adding an experienced and older named driver to the policy is another effective way to bring down the cost. This way the insurer is reassured that the young person will not be the only one driving the car, which reduces the chances of an accident occurring.

However, be careful of ‘fronting’, which is where you pretend your parent is the main driver. Car insurance must be in the name of the main driver of the vehicle, otherwise you are breaking the law, and any claims you make will be rejected and your insurance invalidated.

Consider short-term car insurance

If you don’t need a car all year round, perhaps if you are at university, you could consider taking out a short-term car insurance policy rather than paying for annual cover when you only drive in the holidays. This could save you a small fortune.

Pay for your car insurance annually

It’s usually much cheaper to pay for the whole year in advance rather than paying monthly. You’ll avoid the monthly interest charges and could save a substantial amount.

It may not be possible for many young drivers to pay for the cost for car insurance in one go, but if this option is open to you, it's one to consider.

Consider Black box insurance

Another option to consider is telematics or black box insurance. A black box will be installed in your car (or an app installed on your phone) that monitors how and when you drive.

The technology measures factors like speed, mileage and braking and paints a picture of how safe a driver you are. If you are a safe driver and stick well within the speed limits, you could get cheaper car insurance.

Having a black box fitted is a simple process. Some black box policies work more like pay-as-you-go mobile phone plans, where you can top up the number of miles you plan to cover. Some black box polices restrict your driving at night – a notorious time for accidents.

Make your car secure

Make your car more secure by adding security features such as an alarm and immobiliser. If you can park your car off the street, or even better – in a garage – your young person’s car insurance premiums may be lower.

Car insurance for young drivers FAQs

Young drivers are more likely to be involved in accidents and make insurance claims and those claims are more likely to involve injuries to other young people, so car insurers charge them more.

No, it is a legal requirement to have at least third party car insurance cover to drive in the UK. There is a minimum fine of £300 and six penalty points on your licence. Your car may be seized and scrapped and you may be prosecuted and fined further. You will then find it harder and more expensive to get car insurance in future.

Yes, you must be insured if learning in your car or someone else's. Find out how to get learner driver's cover here.

It can cover damage to your and another driver's car after an accident. It can also cover theft, vandalism, fire and more.

It is the amount you have to pay towards any claim you make. Find out how car insurance excess works here.

You must buy insurance in the name of the main driver. You can add another named driver to a policy but pretending an older, cheaper-to-insure driver is the main driver when really it is a younger more risky driver is called fronting and is illegal. The main driver must be the person who drives most, but you can add a named driver to your policy.

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