There’s nothing quite like getting on the road for the first time in your own car. Behind the wheel, there’s an unparalleled sense of freedom knowing that the world’s your oyster.
But if you’re a young driver, the high cost of insurance feels anything but liberating. Many new drivers can expect to pay thousands of pounds a year for their insurance — and that could go even higher if you have to make a claim.
Thankfully, there are ways to reduce your premiums to make driving a little more affordable. Here are some top tips to help you get cheaper car insurance, even if it’s your first policy!
Why is car insurance so expensive for young drivers?
Car insurance is famously expensive for new drivers. The reason? It comes down to inexperience.
Motorists with years of driving under their belt have evidence that they’re a safe driver. For example, a person with five years’ no claims has proven that they are at a low risk of claiming. Insurers can reward this with lower prices on their policy.
New drivers, on the other hand, don’t have a driving history that can share with an insurance provider. Instead, insurers have to work with the market data, which shows that drivers under the age of 25 are statistically more likely to make a claim (Source: MoneySuperMarket).
To manage this high level of risk, insurance providers have to quote high premiums for first-time drivers.
How to save money on your car insurance
While you may not be able to prove you’re a safe driver if you’re a first-timer, you can increase the likelihood of getting a cheaper policy with the following tips.
1. Add another named driver to your policy
While it seems counter-intuitive that adding someone else to your insurance to get a cheaper quote, including another named driver can actually bring down the price of your premiums.
Choose an experienced driver like a parent to add as another named driver to your policy. Doing so tells your insurer that someone with a proven track record of safe driving will be taking the wheel every now and again, thus lowering your overall risk of a claim.
If you’re thinking about adding another named driver to your policy, make sure you’ve considered the following:
- Only pick someone who will actually drive your car — Don’t choose someone to add to your insurance for the sake of it. Insurers base their quotes on the understanding that your additional driver will be behind the wheel at least some of the time.
- You MUST still list yourself as the main driver — Listing yourself as an additional driver despite being the one who will drive your car the most is an act of fraud known as ‘fronting’. Not only will this invalidate your policy, but you’ll be breaking the law, which could land you in court.
- Don’t add a driver with a bad claims history — Adding an experienced driver will be of no help to you if they have an extensive list of previous claims. In fact, it’s likely to increase your premiums. Only choose to add someone you trust to drive your car. As the main driver, it’s your No Claims — not theirs — that’s at risk if they need to make a claim.
2. Check comprehensive policies as well as third-party insurance
Many young drivers are taught that insurers will only offer third-party insurance to first-time drivers, or that third-party insurance is the only affordable option.
But did you know that sometimes a comprehensive policy can actually be cheaper than third-party insurance?
This might seem counterintuitive because third-party insurance offers less cover than comprehensive. However, many high-risk drivers go for third-party cover to lower their insurance costs. This means the number of claims (and therefore the cost to an insurer) for this group has increased over time. Comprehensive drivers, on the other hand, are often more likely to have a no claims history.
Get a black box
One of the best innovations in car insurance over the last two decades has been the introduction of telematics devices, or ‘black boxes’
A black box is a GPS transmitter that you attach to your car which tells your insurer about how you drive. They monitor things like:
- Your speed
- How hard you brake
- How quickly you turn
- How often you drive
Black boxes offer you a way to prove to your insurer that you’re a safe driver without needing an extensive driving history. Best of all, you’ll be rewarded for it with cheaper premiums when you renew if you drive well. Drive erratically, though, and you could see your prices go up instead.
Choose a car in a low insurance group
Your insurance isn’t just influenced by the type of driver you are, but by the type of car you drive. It goes without saying that insuring a brand-new Mercedes Benz will cost far more than a policy for a second-hand Citroen C1.
But even cars within a first-time driver’s budget can differ significantly on their insurance premiums. This is because insurers put models and makes of cars into what are called “Insurance Groups”. They go from a scale of 1 to 50, with 1 being the cheapest.
If you haven’t bought a new car yet, it might be worth paying slightly more if it means you’ll be in a lower insurance group, as you could save more than the difference on the cost of your premiums.
Learn more about car insurance groups with our in-depth guide or check out our guide to the best cars for young drivers.
See if advanced driving courses could help
Your education behind the wheel doesn’t have to stop as soon as you get those ‘P’ plates. In fact, taking advanced driving courses after you’ve passed has been known to help young drivers get cheaper quotes on their insurance.
Some of the most popular courses are:
- PassPlus — A practical training course designed to improve your driving skills and help you be safer on the road. It takes around 6 hours and can be completed any time once you have your driving licence, though it’s most beneficial to do it straight after you’ve passed. Find out more on the Government website.
- Drive iQ — An online driver safety and well-being programme that provides you with important habits to improve your driving. Drive iQ starts with an assessment of your current driving knowledge, before assigning you to coaching modules with a final test. Learn more about Drive iQ on their website.
One thing to note is that advanced driving courses are less effective at driving down insurance costs than they have been in the past. There’s no guarantee that you’ll get a cheaper quote even if you have a PassPlus or a Drive iQ certification.
Reduce your mileage
Your mileage is the number of miles you expect to drive in a year. It’s one of the factors that affect the cost of your insurance. The more miles you drive, the more time you’re on the road, which increases the likelihood that you’re involved in a collision. Therefore, drivers with low predicted mileage are often able to get more affordable insurance quotes.
Think about ways to reduce your mileage legitimately. For example, if you need to use your car to commute, make a car-sharing agreement with a colleague that means both of you cut your mileage (and your fuel costs) in half.
If there’s no feasible way to reduce your mileage, do NOT deliberately under-quote it on your insurance policy. Underreporting mileage can make your insurance premiums a lot more expensive when it comes to renewal because you force your insurer to work with inaccurate data.
One of the best ways to get more accurate mileage information is with a black box. It’ll record your mileage for you as part of your telematics data, meaning you won’t need to worry about misreporting it.
Pay a voluntary excess
An excess is a payment you make out of your own pocket if you need to make a claim. Your insurer agrees to cover the rest.
Most policies have a compulsory excess of a few hundred pounds. However, you can add what’s called a ‘voluntary excess’ to your policy: an extra payment you agree to make on top of your standard excess.
But why would you choose a voluntary excess? Essentially, insurers reward customers who are willing to shoulder more of the risk by giving them cheaper premiums.
Suppose you’re a safe driver who doesn’t need to claim throughout your policy. In that case, you could save a few hundred pounds a year by adding a voluntary excess, depending on how big that excess is.
However, you should not agree to a voluntary excess that you won’t be able to afford if you need to claim. If this is the case, you may be better off sticking with your compulsory excess and paying more for your insurance in the long term.
Pay annually rather than in monthly instalments
You might think that by paying monthly, you’re getting cover monthly. But this isn’t the case; instead, you’re paying off a year’s worth of cover over 12 months.
When you choose to pay your premium in monthly instalments, you’re entering into a finance agreement with a third party lender, much like you would with a new laptop or phone. Many insurers charge interest to take on a monthly finance agreement. That means you can end up paying 10-20% more for your insurance by choosing to pay it off monthly.
If possible, save up to pay for an annual policy rather than just going for the monthly option.
Start saving today
While insurance will always be pricey for first-time drivers, it’s good to know you can make it more affordable.
Reducing your mileage, adding a confident driver, and installing a black box are all ways that you can chip away at those steep quotes. The good news is that responsible drivers are rewarded with cheaper premiums when it comes to renewal. Stay safe while you’re on the road, and you’ll reap the financial benefits.
Not passed yet? Read about the UK driving laws for learner drivers while you practice for your test.