Car insurance for young drivers – the key facts

Young drivers’ car insurance is likely to be very expensive – it might even cost more than your first car. So it’s useful for new drivers to have an idea of what affects how much you pay, how to get the best deal and how you can reduce your premiums.

Young driver insurance tips

Car insurance premiums – working out the cost

The amount you pay for your car insurance is called a premium.

Insurance companies will ask you for a range of details to work out what your monthly or yearly premium will be. This will include:

  • personal details, such as age and postcode
  • information about the car you’ll be driving
  • level of cover you’re looking for
  • miles you think you’ll be driving each year
  • previous car insurance claims
  • criminal convictions
  • no-claims bonus – the number of years you’ve been driving without having made a car insurance claim.

This information allows the insurance company to build a picture of how ‘risky’ you are, and they’ll calculate your premium based on this.

The higher risk the company considers you to be, the higher the premium will be.

Car insurance levels of cover

When it comes to car insurance, one of the first things you’ll need to think about is what kind of cover you want.

There are three levels of car insurance cover:

  • fully comprehensive
  • third party
  • third party, fire and theft.

If you would struggle to replace your car if it was written off in an accident, it’s best to go for the highest level of cover – fully comprehensive.

Third party cover might be the best option if your car is only worth a few hundred pounds.

But fully comprehensive cover often costs less than third party. So it’s worth checking the price of both.

10 ways for young drivers to get cheaper car insurance

Car insurance for young drivers is always going to be expensive. But there are some ways to keep your premiums down:

Your choice of car is important

Each car is assigned an insurance group number from 1 to 50, with 1 being the cheapest to insure and 50 the most expensive.

Driving a car in a low insurance group is the easiest way to reduce your premiums.

Adding a second, low-risk driver can help

Parents are a good bet, but they can’t pretend to be the main driver – this is called ‘fronting’ and is illegal.

Number of miles driven

When applying for insurance, you’ll be asked about how often the vehicle will be used and what distances you expect to cover.

Fewer miles and less frequent use can result in lower premiums.

Shop around for the best deal

Comparison sites are a great place to start, but you can also search online for specialist young person’s car insurance providers.

Ask an expert

When you have a couple of good quotes, call an insurance broker and ask them to beat it. It’s free – and they’ll do the leg work and call you back.

Pay upfront

Monthly instalments might sound more affordable, but insurers will charge interest on those payments. This means they’re more expensive than an annual one-off payment.

Pay a higher voluntary excess

Pay a higher voluntary excess on top of your compulsory excess.

This can keep costs down for any driver. But it means you will end up paying more yourself if you need to make a claim.

Watch-out for unnecessary ‘add-ons’

For instance, while breakdown cover is included in some policies and can be useful, it’s often cheaper to buy it separately.

Drive safely

Not getting into accidents means you’ll start to build up a no-claims discount, driving down premiums.

It also prevents you from getting points on your licence, which can make insurance more expensive.

Advanced driving course

Taking an advanced driving course could push premiums down. But check with your insurer to make sure you would definitely get a better deal.

Black box car insurance

This is a form of technology that rewards safe driving with lower insurance costs.

Sometimes referred to as telematics insurance, these policies involve fitting a device to your car to monitor:

  • acceleration
  • braking
  • cornering
  • miles covered
  • what time of day you’re driving.

The price of your insurance then goes down if you prove you’re a good, safe driver.

There can be a downside if your driving isn’t so good. This is because if your risk level increases, your premiums go up – and your insurance could even be cancelled.

Check up on your insurer

Don’t get scammed. Fake insurers sometimes target young drivers.

Your insurer – and your broker, if you’re using one – must be authorised and regulated by the Financial Conduct Authority (FCA).

It’s also important to read the policy before you buy. It’s the only way to know you’re covered.

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MoneyHelper is the new, easy way to get clear, free,
impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

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Looking for us? Now, we’re MoneyHelper

MoneyHelper is the new, easy way to get clear, free,
impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

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