A Guide To Young Driver’s Car Insurance And Why It Is So Expensive
Getting on the road for the first time, when you are 17 or maybe 18 is a real challenge to say the least; first there is the driving test itself, with all the lessons that are required and where a tiny mistake can mean a big fail… But once you finally pass and get your license, that’s where the real challenges start. Getting car insurance as a young driver is notoriously difficult, very expensive and full of pitfalls too. Worst still, on average the costs seem to be getting higher. Why Is It So Expensive? Well quite simply, insurance companies take a risk when they sell you a policy – it is effectively a gamble. If you pay your premium and you don’t crash all year they get to keep that premium as profit. But if you do crash, they have to pay out, and some times that amount can be many times higher than the premium that you have paid – so the insurance company makes a loss. Young drivers are statistically more likely to crash, as are inexperienced drivers. So if you pass at a young age, you will be a young and inexperienced driver, and that means that you insurance company is more likely to have to pay up. Why Are Prices Going Up? You might be surprised when you get an insurance quote that is more than the value of your car. But remember that if you do crash, your insurance company will have to pay for every last bit of damage. That can include:
- Damage to your car
- Damage to the third party’s car
- Damage to any other cars involved
- Damage to council property (bus stop etc)
- Damage to people
This last one is perhaps the biggest cause of price rises lately, as the advent of no-win no-fee solicitors means that everyone is suing for whiplash. So in a small collision you might only do £500 worth of damage to your car, but manage £3,000 damage to the third party’s car, £2,000 compensation to each of the occupants and £2,000 in legal fees for their solicitors – total bill £7,500. How To Keep Your Car Insurance Cheap First of all, whatever the cost, don’t drive without insurance, doing so can get you in a lot of trouble and the government and police have sophisticated ways of checking that any cars on the road are insured. Get caught and you will get 6 points or more, which within 2 years of passing means that you’ll lose your license. On top of that you can be fined up to £5,000. Another common technique is to get your mum to insure herself and add you as a named driver. This is fine if she genuinely is the main user of the car. But if it is actually your car and she barely (or never) drives it your insurance could be void. Insurance companies are getting ever hotter on this and if you are in an accident and the insurance inspector sees a big stereo, chrome alloys or any other ‘mods’ you have made his suspicions will most likely be raised. Here are a few legal and sensible ways to save money though: Get a sensible car Certain types of car are typical ‘boy racer’ cars and these are going to be more expensive to insure simply because they are more likely to be involved in accidents. Get a small car with a low insurance group and put up with not being able to race around for a year or two. Have a high voluntary If you have a higher excess on your policy you will have more incentive not to crash, insurance companies know this and they reward you with a lower premium. Of course this strategy only saves you money if you manage to not crash. Go fully comp You would expect third party insurance to be cheaper because it doesn’t cover your vehicle, but insurance premiums are worked out based on claim statistics and since people who have third party insurance generally care less about their vehicles, they tend to drive more recklessly. As a result, fully comp is often cheaper +it gives you more cover. Pass plus Pass plus is a scheme for new drivers to take additional training – it is an extra 6 hours of lessons that include night time driving, motorway driving and some other extra bits. It costs about £135 with most instructors and you can’t really fail it. Some insurance companies will give you up to 35% off your premiums in the first couple of years, so it will certainly save you more than it costs to do.