How can young drivers get cheap car insurance?

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Iona Bain

FULLY UPDATED: 2017

Like most teenagers, the minute I turned 17 I wanted to learn how to drive. Little did I know how much car insurance was going to cost!

Getting on the road can be an essential step towards becoming financially and socially independent. Not only does it help students travel to college, university and training schemes, it allows many young people to find and keep work – often it is a skill that employers expect you to have. And for the many who can’t get work or have huge tuition costs to pay, it gives them mobility and allows them to live in cheaper accommodation or even move back home when renting and buying houses is so costly, maintaining a vital sense of independence in the process. In a perfect world, whenever young people have to live under the same roof as mum and dad, a set of wheels ought to be prescribed to them on the NHS just to preserve their sanity.

But in the real world, there’s little compassion for young drivers. In fact, the crippling cost of car insurance reflects a great mistrust towards us.

This is, in many ways, understandable, considering our poor safety record. One in five new drivers has an accident within six months of passing and 74% of deaths among young adults are on the road, according to the road safety charity Brake. The risk that young men pose in particular is very worrying, considering that so many teenage passengers, particularly girls, are being driven to their deaths by testosterone-fuelled lads, some of whom survive when their back seat companions don’t.

But spare a thought for the many young male drivers who can’t get car insurance as result. One young driver, 18 year old Chris Berry from Bolton, sought a quote for his £400 car and was astonished to be given the figure of £17,800 by Quinn Direct, to which he told the company “it’s a Polo, not a Ferrari.”

All the ways that driving could enhance Chris’s personal prosperity count for nothing when he can’t even afford the £5000 “third party only” car insurance.

That is an extreme example – it can slightly vary depending on where you live and there’s a chink of light when you hit your mid-twenties and premiums start falling. But typically drivers between the ages of 18 – 22 are being charged record high premiums of £3,688 per year because of their high risk status.

It seems there isn’t much we can do to get a half-way decent deal on our car insurance. Or is there?

Insurethebox.com, the Co-operative, Admiral, Marmalade and others are tackling the problem head-on with “telematics” insurance, both using a clever type of technology which measures when and how you drive.

There are two ways that telematics can reduce your car insurance premiums;

1. A device is installed in your car, or the car you share with parents, which susses out when you brake or take a corner suddenly, as well as you when you perform excessive g-forces. You will be scored on your policy using this data and be in line for discounts if you drive safely. If you don’t, expect higher premiums. With InsuretheBox, your policy will charge by the mile – drivers pay for 6000 miles initially and can top up thereafter. If you drive safely, you are eligible for free bonus miles. The Co-operative policy will assess your driving performance every 90 days and will hand out a Safer Driving Discount, pushing the next payment down by up to 30%. It even includes access to an online monitoring dashboard, which allows you to see how safely you are driving, marks you on a scale of 1 to 5 (5 being the safest) and provides tips on how to improve.

2. Alternatively, you don’t even have to get a little man out to install the telematics box in your car; you simply download an app and you keep your phone on during your car journey to monitor how you’re driving. Aviva is just one insurer to offer this new more discreet version of telematics technology.

Some commentators believe young drivers should not be subject to Big Brother-style surveillance. But negative perceptions are being put aside now insurance premiums have become virtually unaffordable. Young people will do whatever they can to push down costs and as of 2017, there are now a whopping 751,000 telematics policies live in the UK.

Of course, car insurance premiums do start to come down after a year anyway, providing you make no claims and don’t pick up any speeding tickets. But if young people can’t afford to pay that initial horrible sum, it is little consolation.

Once they have passed, young drivers are fit for the road and many just want the means of transport to get to work, college or simply out of the house. Accidents happen, but most aren’t looking to enact a scene out of the Fast and Furious franchise.

Mobile young people are hugely beneficial to our economy and society. So whilst driving a car is a life-and-death responsibility, it is in all our interests to reward young people if they honour it.

Here are my other top tips for young drivers looking to drive down those car insurance costs (excuse the pun).

  1. If you have already passed the standard driving test, consider signing up for Pass Plus. You take an additional set of lessons called Pass Plus that help you cope with more challenging scenarios and help you drive more safely. Yes, it costs, but it can vary on where you live and what driving school you enrol at. You also get up to 50% off the cost with subsidies from some local councils. You may be eligible for a discount on some insurance policies (although sadly there are few willing to offer this discount now) and sometimes the saving this generates outweighs the initial cost of the lessons. However, the main benefit is that you are a safer driver, so if you take our a telematics policy, you will behave in a way that will guarantee lower premiums.
  2. If you live at home, you might be able to add a parent driver to your policy. If you add an older driver to the policy, you can cut your premiums down significantly. But proceed with caution. There has been a well documented trend in car insurance where a parent insures their child’s car in their own name and names their child as a second driver on the policy. This is illegal if the parent isn’t the primary driver. Although many people don’t realise it, it can have serious consequences should you make a claim. If the insurance provider believes you have been “fronting”, as this practice is called, you can be refused a claim, the policy can be cancelled and you could even be prosecuted for fraud. There are no exact figures as to how many people have been subjected to this punishment and it is up to the insurance company to prove that you have been doing this. Insurance companies have tried periodically to deter “fronting”, but companies appear increasingly reluctant to publicise the behaviour should it give people any ideas, particularly when it seems quite hard to catch “fronters” in the act. But if you fell foul of the law, the long-term cost would definitely not be worth the risk.  Nonetheless, there is nothing wrong with you being named a second driver on a car if you really are the second driver. If you live at home and share a family motor, for instance, you could reduce your premium payments by being added to your mum or dad’s existing policy or having your parents added to yours. Okay, you won’t have the same freedom sharing a car with others. But the compromise could be worth the saving.
  3. By keeping the car either on the drive or in the garage overnight, you can ask for a lower quote from many insurers.
  4. This is especially the case if you’ve only just passed. Try not to drive at night or on busy roads at peak time and in challenging weather conditions like snow and ice. Avoid becoming a late night taxi for friends and absolutely no drinking/drug-taking. As you build your no claims bonus, you will start to see light at the end of the tunnel.

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4 thoughts on “How can young drivers get cheap car insurance?

  • Pingback: Spying on my driving? If it keeps my premiums down, hell yea! | Iona's Young Money Blog

  • June 16, 2015 at 3:55 pm
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    In reality the problem young drivers face is that the 17-24 year old age group are involved in 25% of all collisions and are 50% more likely to crash in their first six months of driving than a 30 year old. I believe the only way to reduce young drivers accident rates is through education. At present there is no pre 17 road safety education in our educational system.

    Reply
    • April 21, 2017 at 3:26 pm
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      I completely agree that prevention is better than penalisation, and educating school children about the risks of driving recklessly are hugely important, but I also think incentivising good behaviour through telematics apps is a powerful way to drive changes – don’t you think?

      Reply
  • June 30, 2017 at 2:54 pm
    Permalink

    Hi there, I understand all of the concerns that people have when it comes to the outrageous cost of young drivers insurance. I am the founder of http://www.MyFirstUK.com and we have recently moved into this area of the market and are offering a much more hands on approach. I am only 22 years of age and so I understand the frustrations more than anyone, having just been through it all. Our pricing is very competitive but what we do so well is to give our customers great advice and guidance through the whole process.
    If your struggling with the number of options etc then do feel free to give us a call on 0333 305 5116 and we can help you every step of the way.

    Reply

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