Aren't insurance costs for the younger generation crazily expensive?
Yes, but there are ways for young drivers to slash the cost of their car insurance. With an average premium of around £2,000 for an 18-year old insuring a fairly modest car fully comprehensively, that's just as well. To get the very cheapest premiums, however, you need to think like an insurer. They are interested in what the risks are are of you making an insurance claim, and how much that claim is likely to cost them. Reduce the risk of having a road traffic accident, and you'll get a cheaper, possibly much cheaper, quote.
Why is age such a big disadvantage when insuring a car?
Young drivers as a group have a poor reputation which industry statistics justify. Drivers under 21 are ten times more likely to be involved in an accident than those over 30 and 23% of drivers under 25 will have a collision within two years. Young drivers are inexperienced and less likely to spot dangers or react quickly and appropriately in an emergency. Also, they are more likely to take risks ranging from speeding or otherwise driving dangerously to parking in unsafe areas because the club is just across the road and friends are getting restless. It is sobering to consider that 16-19 year olds are more than twice as likely to die in a crash than those in the 40-49 age bracket.
What insurers consider when calculating premiums
As a new driver, insurers look at your age, the length of time you have been driving, your address and your car. The first two will give the insurer an idea of your level of experience on the road. You may have already had insurance and have built some No Claims Bonus, which can help. Insurers will have information about the level of crime, particularly car crime, in the area you live in and where the car will be kept when you are not using it. Insurers will look very positively on your application if you are able to keep your car in a locked and alarmed garage. Unfortunately this isn't an option open to many young people because they either live with parents who have cars themselves or in accommodation that can offer at best on street parking. However, to qualify for cheaper quotes: find a safer place to park at night.
Get a safer car
Get a car which is cheap to repair and maintain
Insurers look at the overall cost of paying for an accident. If you drive a big, heavy car it could not only cause more damage in a collision but cost more to repair as well. Safer cars, which are inexpensive to repair, belong to the lowest insurance groups. You'll find a lot about car safety at Thatcham Research.
or click here for a car insurance group tool
Don't pay for too much mileage
The insurance company preparing your quote will also want to know what you intend to use the car for; this is a good indicator of the type of mileage you will cover, as well as the driving conditions you may have to go out in. Generally the lower the expected mileage, and the less urgent the journeys, the less you'll have to pay. The categories are:
- Social, domestic, pleasure – shopping, visiting relatives and friends;
- Commuting – driving to work and back;
- Business – you commute and also use you car to travel to different sites or visit clients; or
- Commercial travelling – you are servicing a large geographical area, visiting customers and making deliveries.
So; be careful about the type of policy you opt for, it could make a lot of difference to what you have to pay.
The problem with starting out as a new driver is that you have no track record so insurers have to use other ways of calculating how much of a risk you represent. The fact that you are between 17 and 25 doesn't necessarily mean that you drive like a lunatic on steroids. Unfortunately, though, the majority of dangerous drivers do fall within this age range. Telematics (or black boxes) helps insurers assess your chances of having an accident individually so helps them tailor-make a premium designed for you as an individual, rather than as part of an age group. They do represent a huge loss of privacy since someone else has complete access to your driving record, there is time and expense in setting them up and they can backfire badly - exceed the speed limit, corner too fast, brake too hard, drive during the danger hours of 11pm to 7am too often and your premium can increase or your policy could even be cancelled completely. However they encourage safe driving habits, which reduces accidents, and they can lead to lower insurance costs for many drivers.
Since 1997 alarms and immobilisers have been fitted as standard to new cars in the UK. Your insurer will want to know these are in good working order. Whilst an alarm will not prevent a determined thief stealing your car most break-ins occur because the thief has seen something in the vehicle worth stealing, like a laptop, mobile phone or CD player so always make sure these are out of sight or locked in the boot. Similarly, clever crooks can override an immobiliser but this takes time and they may consider that it just isn't worth the risk. An extra step you could take would be to fit a tracking device so that if your car is stolen it can be traced. Of course, this doesn't guarantee what state it will be in when it is recovered.
Be truthful - don't lie about your age
Do not be tempted to add a few years to your age to try and lower your insurance. Although most insurers will offer a quote based on the information you have provided, by the time they issue the cover documents they will have done further checks - and they can tell your correct age from your driving licence. If you have lied they may decide not to insure you and pass that information to other insurers, making it difficult for you to get cover. Alternatively they may still offer insurance but at a higher cost than you were originally quoted. Finally, you may find that the fact you have lied about your age emerges the first time you make a claim, with the effect that the insurance company invalidates your cover. Don't be economical with the truth on any personal details relating to your insurance.
More ways of lowering a premium
- Whilst you might want to cut a profile on the road by customising your car in some way - don't. Any modifications, including the installation of expensive sound systems, will increase your insurance costs.
- When you take out your insurance you will have the opportunity of increasing the level of excess you pay. This is the amount you will pay on any claim you make before insurance cover starts. The higher the excess the more positive the effect on the cost of your cover. However, you should make sure that if an accident occurred you would be able, always, to meet the excess as the insurance company are unlikely to pay out until you have done so.
- Limiting the amount of mileage you do may also help lower your insurance costs. Again, tell the truth. You could also
accept a curfew because not being out at night and possibly leaving the car in dangerous areas may influence some insurers
to offer you a smaller premium.
- If you add an older driver with a clean licence to your policy the insurance company will appreciate that when that person is driving the vehicle you can't be, and therefore the overall risk is lessened slightly. Only add another person to your policy with their permission and make sure they also tell their own insurers. This more experienced driver must, genuinely, drive the vehicle regularly too. Otherwise the insurer has grounds to refuse a claim on the basis of misrepresentation.
- Consider a Pass Plus Driving Course during the first year after passing your test. Before you undertake this you should check with your insurer what successful completion of the course would mean for your cover. You have to pay for these courses, although some local authorities will help with costs. During the course you will be examined by a driving instructor licensed by the Driver and Vehicle Standards Agency. Courses last about six hours during which you will have to drive on different types of road at different times of the day and in different weather conditions. On successful completion of the course you can apply for a certificate which you can present to your insurer.
- A further step would be an advanced driving course like the one run by the Institute of Advanced Motoring.
Successful completion will show you are a very good driver, and although the effect on your insurance is unlikely to immediately cover the cost of the course
it could still be an excellent investment in the long term; not only by
reducing your insurance premiums, but by making you, and perhaps your
loved ones, safer on the road.
- Finally, obey the rules of the road, stick to the speed limit and stay conviction free.
Even though insurance costs for young drivers can seem astronomical
at first, motor insurance is a very competitive industry and insurers want your custom. They know that young people will soon be buying property, getting married, going abroad on holiday and this means they can target other insurance products at you.
Don't be persuaded to increase your premiums to include things you might not need, like a courtesy car or legal insurance, and beware of those companies who levy a charge when you need to make a small change to your policy,
such as notifying a new address.
In order to secure your custom many companies may offer
price cuts to get you to sign-up. If you benefit from this, then OK, but in year two those
bargain rates may not be available so avoid automatic renewal and always shop around to make sure you get the best deal.
Some companies will allow you to set up
a new policy well before your existing one expires and there is evidence that buying well ahead of renewal dates results in lower quotations; insurers say that those who leave things to the last minute are less organised and so
present a greater hazard on the road.
Oh, and please don't even consider driving without insurance. It is not only a criminal offence but records show that in 2012 nearly 6,000 young drivers lost their licences owing to driving without insurance. Concentrate instead on getting the best policy for your needs, at the cheapest possible price.