Young Driver Car Insurance

Young drivers tend to pay car insurance premiums well above the average. This is because of their relative inexperience behind the wheel and the fact that they’re statistically more likely to make an insurance claim than older drivers.

However, there are several ways for young drivers to get a handle on the cost of cover that can also help them drive more carefully and safely.

So, from types of cover to telematics, here’s everything to know about the best car insurance for young drivers.

Why is young driver car insurance so expensive?

Insurance companies are in the business of risk. The more likely they think you are to be involved in an accident or have your vehicle stolen, the greater the risk you’ll file an insurance claim and cost them money. So, logically, they charge higher premiums to higher-risk customers.

Insurers base their risk assessment on statistics that show them how likely someone of your age, occupation or address is to make a claim. The stats tell them young drivers are more likely to be involved in an accident than older, more experienced drivers.

According to the Association of British Insurers, drivers aged 17-24-years-old account for just 7% of UK licence holders and cover fewer miles than older cohorts, yet account for 24% of road traffic collisions in which someone is killed.

Young drivers’ premiums tend to start falling by the age of 25 when they are likely to have a few years’ experience, especially if they’ve been driving since 17.

What kind of young driver car insurance is available?

There are three levels of cover available to young drivers. From least to most comprehensive they are third-party only, third party, fire and theft, and fully comprehensive.

Third-party only is the minimum level of cover you’re required by law to have. It covers the cost of damages to other people, their vehicles, and their property. It does not cover damage to you, your vehicle, or your property, although it does cover any passengers you may have.

As the most limited level of cover, you might expect it to be the cheapest – and it once was. Today, however, it can be the most expensive of the three options because higher risk drivers trying to lower their premiums tend to choose it – a trend that insurance companies have latched on to.

A third party, fire and theft policy enhances third-party only cover by also paying out if your vehicle is damaged by fire or stolen.

Fully comprehensive cover protects you, your vehicle and property, other people, their vehicles and their property. It also covers you for fire, theft and medical expenses.

How to save money on young driver car insurance

There are a lot of things you can do as a young driver to make sure you get the lowest possible price for the cover you need…

• Car insurance groups

You can’t change your age and experience, but you can pick a vehicle that’s not too powerful. Vehicles in lower car insurance groups such as the Volkswagen Up or Vauxhall Corsa will be cheaper to insure than those in higher groups.

Also, vehicles with more security and safety features will decrease the risk of you being in a serious accident or having your vehicle stolen, which will again be good for your premium.

• Time behind the wheel

If you can, limiting your annual mileage is another way to keep down your insurance costs. The theory is that, the fewer miles you cover, the less time you’ll spend on the road and the smaller the window of opportunity for you to be involved in an accident.

In a similar way, adding an older and more experienced driver to the policy as a named driver can bring your costs down since, theoretically, you’re sharing the vehicle and won’t be using it 100% of the time it’s on the road.

But you should never claim a more experienced motorist is the main driver of your vehicle while adding yourself as a named driver in a bid to bring down costs if that arrangement isn’t true. If you’re the vehicle’s main driver, you must say so.

Misleading your insurer is illegal (it’s called ‘fronting’ in this instance) and, at best, could lead to complications if you need to make a claim later. At worst, you could be taken to court and fined.

• Payment

If you can pay for your annual policy upfront rather than splitting the cost over 12 instalments you’ll avoid paying interest, which can be charged at 20% or more.

It’s entirely possible that you simply wouldn’t be able to find what could be a four-figure sum to pay your premium straight off. One tactic could be to apply for a 0% purchase credit card, use that to pay the premium, and then pay off the card balance over 12 months (or sooner if you can) without paying interest.

Agreeing to a higher voluntary excess figure can also bring down your premiums. The excess on a car insurance policy is the amount the insurance company will deduct from any claim you make.

It comes in two parts – mandatory (usually set at between £100 and £250) and voluntary. The insurer will acknowledge your willingness to pay a higher voluntary excess by reducing the size of the premium.

But remember you will have to pay the excess to get your car repaired or to meet other costs of a claim – it’s not hypothetical and so must be affordable.

• Telematics

Telematics or ‘black box’ insurance policies are designed to help those targeted with higher premiums the chance to lower the cost of cover. Telematics policyholders have a small, web-connected device fitted to their vehicle or an app on their phone that relays data about their driving to their insurer.

The insurer uses this data to assess and monitor risk so that it can set and amend premiums accordingly. The ‘black box’ houses a GPS tracker to transmit your vehicle’s location and time of day, an accelerometer to measure speed and acceleration, and a SIM card to connect to mobile networks so that it can send the data.

Drivers who stay within speed limits, accelerate and brake smoothly while driving during quieter times of the day can earn discounts on their premiums, while those who drive aggressively and during busier times of day can see their premiums rise.

If you’re a young driver who works unsociable hours, you could find black box curfews unfairly working against you. They’re not suitable for every young driver, but they’re an option if you’re struggling with the high cost of cover.