Car insurance options for young drivers
Most young people can`t wait to get behind the wheel for the first time - but that spirit can quickly be dampened by excessive car insurance premiums.
According to the AA British Insurance Premium Index, published in January 2010, third party, fire and theft policies, typically bought by young drivers, now average £1,252 a year after rising by 8.9 per cent over the previous quarter. So what should young drivers look for in a policy and how can they find the cheapest premium?
Before you shop for car insurance.
Finding a good deal on car insurance begins before you even start shopping around, with the car you choose. Typically, new cars with high performance engines face the stiffest premiums because they cost more to repair/replace and are more likely to be driven at fast speeds.
For young drivers therefore, it`s sensible to choose a conventional, older car with a smaller engine. Also steer clear of making modifications to the car or choosing non-standard specifications as these too could cause premiums to rise.
Choose the right level of cover.
There are three levels of car insurance available - third party, which protects you against liability for injuries and damages caused to third parties and liability while towing a caravan or trailer; third party, fire and theft which incorporates third party cover plus protection for your own car against theft, fire damage and attempted theft; and comprehensive, which covers loss or damages to your own car, subject to exclusions, plus a range of additional features dependent on the provider.
Whilst gaining as much cover as is affordable is advisable, young drivers may find it more cost effective to take out a third party policy particularly if they drive a relatively inexpensive car which they could afford to repair themselves. If you can afford comprehensive cover then avoid adding options you don`t need - such as a courtesy car if you already have access to a second vehicle.
Pay attention to the terms.
Anyone shopping for car insurance should read the terms and conditions and watch out for exclusions - circumstances in which they will not be covered.
Young drivers should also be mindful of the `excess` - this is your contribution to a claim. Increasing the excess can lower premiums, but keep it at a level you can afford. Also see if your provider offers a no-claims discount - some insurers offer rapid bonus schemes to young drivers during their first year of motoring.
Look for ways to save.
Saving money on car insurance revolves around reducing the risk you pose to an insurer. Here are some tips:
- Agree to a mileage limit: The less you drive, the less likely an accident will occur.
- Avoid fronting: Many young drivers ask their parents to `front` a policy for them, i.e. put the insurance in the parent`s name with the young driver as a `named driver`. This is illegal however and could invalidate a policy.
- Increase security: Consider parking your car in a garage overnight and adding insurer-approved security devices such as an alarm, immobiliser or tracking device.
- Pay annually: You can avoid monthly interest charges by paying premiums upfront.
- Take the Pass Plus: This advanced driving course could offer savings as high as 35 per cent with some insurers and assistance with the cost of the course may be available from your local authority.
- Use a comparison website: Most insurers offer their cheapest deals online due to the savings they make on overheads. Comparison websites offer a fast way to compare young drivers car insurance so you can be confident you are receiving value for money.
