Young Driver's Guide to Cheaper Car Insurance

young driver in a car with a though bubble thinking about car insurance

Are you a young driver? Here's how to get cheaper car insurance

If you are a young driver ready to buy a new car then you are probably looking at how to make your car insurance cheaper. Young drivers pay some of the highest insurance premiums on the market and many are paying expensive premiums even with a clean driving record and their best efforts to keep annual insurance costs low. There a ways that to reduce car insurance for a young driver, but lets first understand why premiums are so high in the first place.

Why does car insurance cost more for young drivers?

In a nutshell, young drivers age 17 – 25 are seen as a high risk group for insurance companies. Young people account for just 1.5% of drivers in the UK but are involved in over 10% of all road accidents, and the claim rate for this age group is much higher than any other. As a perceived ‘high-risk’ group by insurers, the average car insurance quote for drivers aged between 17 and 22 years old has been estimated at over £1400. Data from the Association of British Insurers (ABI) also shows that the average claim for 18 - 20 year olds is £3,667, the highest for any age group in Britain.

What affects car insurance for young drivers?

young driver driving a car
young driver driving a car

What car you drive

The type of car you drive will affect your insurance premium at any age, but if you are a young driver looking to insure a powerful vehicle expect to pay expensive rates. Also, vehicles which don’t have built-in security features may be equally more expensive to insure, as will those which have had modifications made to them. 

person completing insurance form on their laptop

Personal Information

Your profile on your insurance application provides your personal details, driving record and vehicle information to your insurer. Your home address, plus where and how your vehicle is kept day and night, can affect your insurance premium. So will your driving record and details of what the vehicle is used for. 

Type of insurance policy

The type of insurance you purchase for your vehicle determines how much cover you will receive for accidents, injuries and vehicle damages that are the result of a situation you have been involved in. How you appear as a driver on the policy will also affect the premium you or any other named driver on the policy will pay. 

15 Ways to reduce car insurance for young drivers

As a young driver there are ways to reduce the premiums you pay to insure your car. The below tips will help make you more attractive to your insurer and reduce the perceived risk of insuring you and your vehicle.

  • Choose a car in a low insurance group

    Every car is categorised into an insurance group ranging from 1 – 50. Cars are grouped based on a number of factors, including engine size, security features, market value, and repair times.

    Vehicles in group 1 are the cheapest to insure with cars in group 50 being the most expensive. Usually, its the cheapest cars to purchase which are the cheapest to insure. This is because they tend to be low specification models with smaller engines that are easier and quicker to repair. Vehicles in higher groups are generally rarer cars which require expensive parts that are in shorter supply.

  • Keep your car safe and secure

    Where and how the car is kept during the day and at night will affect your insurance premium. For example, a car which is kept on a driveway compared to one which is parked on the street poses a lower risk to an insurer and the owner may pay less because of this.

    People living in inner-city urban areas too will typically experience more accidents, thefts and vandalism than those living in rural or suburban areas. So your location can also affect what you pay. If you live in an area susceptible to crime then make sure the vehicle you are insuring is fitted with modern security features like a factory fitted Thatcham approved alarm.

  • Choose comprehensive insurance

    The three different types of car insurance available are: Third party only, third party fire and theft, and fully comprehensive. Full comprehensive insurance provides third party, fire, personal injuries and theft cover. It will cover you for damages done to your car and another car if involved in an accident.

    Don’t always assume that third party is the cheapest option. You may have to pay for future damages yourself without the help of your insurer on this policy.

  • Add an experienced driver to your policy

    Adding a second driver to your policy that has experience and a clean record reduces the posed risk of the vehicle to the insurer. It’s a common method used to reduce insurance for high risk groups like young drivers. You might want to consider adding a parent or guardian to your insurance policy.

  • Be a named driver on another policy

    Adding yourself as a named driver on the policy of an older, responsible adult can help save you money on insurance. You can then driver the insured car and you may be able to build up a discount record with your insurance company that you could then transfer across when you take out your own policy. 

    When adding yourself onto the policy of another driver, make sure you follow the guidance of the insurance company on how you may use that vehicle as a named driver. ‘Fronting’ is a type of car insurance fraud where experienced drivers claim to be the main driver of a car when in fact it is driven more regularly by someone else named on the policy.  

  • Buy a telematics insurance policy

    A telematics policy (commonly known as a ‘black box’) is a type of personalised insurance popular with young drivers and other high risk groups.

    A 'black-box' telematic gadget is fitted to your car and your annual premium is then calculated based on your driving habits which are recorded by the gadget – or ‘black box’. It will record when and where you drive, how fast you drive, how often you drive and your driving habits like acceleration, braking and cornering. 

    Telematics policies are useful to high risk groups as they let drivers prove their driving behaviours are safe and responsible, and premiums can be reduced because of this.

  • Increase the excess on your policy

    Choosing to pay more excess on your policy can help lower your insurance. Excess is the amount of money you have to pay upfront in order to make a claim. Make sure to set your excess at an affordable value, so in the instance you do have to make a claim you can afford to do so. 

  • Take out a multi-car policy

    If you live with your parents are another adult with clean driving records, you may see a reduction in your insurance premium with a multi-car policy. Discounts are often around 10% but can be as high as 20-25% and will benefit all people listed on the policy.

  • Build your no claim discount

    Sensible driving will reduce your risk on the road and you can start to build your no claims discount. In the long term as you build your no claims discount, which increases every year you don’t claim on your insurance, then you will start to see a reduction in your car insurance premium. 

  • Take your pass plus test

    Pass plus is an additional driving qualification available after you qualify to drive in the UK. The pass plus test covers more complex driving situations, including motorway driving, night time driving, driving in poor weather conditions and driving in heavy traffic.

    Not all insurers recognise the pass plus test so not all with offer discount on insurance premiums with this qualification. Check first with comparison website for which companies offer discount for pass plus drivers.

  • Avoid adding modifcations to your vehicle

    Adding any modifications to your vehicle that are not factory fitted are both a security and safety risk to insurers. For example, adding a body kit to your vehicle or a modern entertainment system will increase the risk of the car being stolen or increase the risk of more damage to the vehicle in the event of a crash. Insurance companies will likely charge higher premiums for cars with lots of modifications.

  • Limit how much you drive

    Limiting the amount of miles you drive can help reduce your insurance premiums. This may mean only using the vehicle on weekends and commuting to places mid week i.e work or college.

  • Change your job title on your insurance policy

    A person's job title is used by insurance companies to calculate the risk of their driving. You don't have to lie on your application, but you may be able to find an alternative job title that better describes your employment position that may reduce your insurance premium.

  • Pay annually

    Avoid monthly payments if you can as you will probably end up paying more over the course of 12 months. Most car insurers will charge interest on instalments, unless you pay with a credit card which may avoid additional charges.

  • Use a comparison website

    Comparison websites are an excellent place to start finding cheaper insurance. You can compare quotes from a large selection of insurers and see what benefits each will offer for things like your no claims discount. Remember thought, not all major insurance companies are listed on comparison websites.

What age does car insurance go down?

As we've seen car insurance premiums are affected by a range of factors. As you get older you are likely to pay less for your car insurance but only if other factors like the car you drive and the safety and security of the vehicle don't pose additional risks to your insurer. Drivers with 5+ years no claims discount typically receive the best discounts on their annual insurance premiums and prices will continually fall between the ages of 25 - 65 for drivers that have clean driving records.

The annual premiums for comprehensive insurance get cheaper from the age of 25 as statistics show that drivers 25+ are less likely to be involved in an accident and will be up until they are 75+ when the risk will increase again. If you build your no claims discount at a young age then you'll start to pay less quicker. Those who have a criminal record for a driving offence or for anyone who has a record of multiple claims will undoubtedly continue to pay a higher premium whilst they rebuild their NCD and a cleaner driving record. It doesn't always pay to be loyal too and insurance companies are always on the look out for new customers. Shop around every time your insurance renewal is due and you are more likely to find cheaper rates and a better deal from another insurer as you get older.

Cheap Cars to Insure for Young Drivers