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Car Insurance for Young Drivers

By Kirthana Devaster

If you are under 25, I’m sure you are frustrated with the crazy insurance fees! About the only saving grace is the slight drop in insurance fees because of Covid-19. This is because lockdown has meant there have been fewer claims. However, the average car insurance costs over £900/year for anyone below the age of 25. The premium is highly extortionate! Here’s a guide to help you save money on this, one way or another.

Why is car insurance for young drivers expensive?

The insurance sector is all about calculating risk. Car insurance for young drivers is expensive because statistics prove drivers under 25 are more likely to get into an accident than those over the age of 25. Thus, making them the riskiest drivers.

How to spend less on car insurance if you’re a young driver:

  • Don’t Auto- renew: Loyalty doesn’t always pay

The Guardian once said, policyholders who stay with the same supplier could be overpaying by thousands every decade. Jot dot your renewal date and start comparing comparison sites to see if your insurance provider is giving you the best deal possible. Call up your insurer to see if they can match or better still, beat the best quote you have found. If they can’t, you know what to do - do the classic switcheroo!

  • If you live with your parents or have more than one car, consider a multi-car cover

People don’t know this often enough, but if you have more than one car in your household, this solution could be for you! Don’t worry about having differing renewal dates, this does not affect your solution! Admiral claims you could save £252 with their MultiCar Insurance. The more cars you add, the more discounts you are eligible for. Besides Admiral, Aviva and LV provide multi car policies as well.

If you have different renewal dates, not to worry! All three providers allow you to set up a policy with your first car’s renewal. Once the following cars are up for renewal with their existing insurer, they can make the switch. You can receive a quote for all your vehicles with different start dates. Remember, the time at which you pay for the additional cars and when the discount kicks in is different. Once your multicar policy ends, all cars will be up for renewal at the same time.

If you prefer your multi-car cover to begin at the same time, you will be given one grand total. For different start dates, you will be given a total price to pay and you would just pay however long each car is insured for. Furthermore, you will be given an annual equivalent price as if all vehicles were insured for a full year. This is to help you compare against other providers.

Take advantage of long-lasting quotes. Providers such as Aviva provide quotes that are valid for 60 days. The price is fixed, subject to you not changing any details. This means you get a quote two months ahead of your renewal, allowing you to keep that price.

Some providers allow you to get separate policies with the same insurer, and you can get a discount on the second car. Insurers such as Axa provide up to 15%! Take note that you should insure the car with the cheapest premium first. This is because you will usually get the discount on the following ‘additional’ car(s). Do your research and get on with this!

  • Adding a responsible second driver can reduce your premium.

Whether it’s your father or older sibling above the age of 25 with driving experience, your premium can be brought down significantly. MSE reported an 18 year old’s policy’s premium was cut by around £1,000 because of this.

This is because car insurance is about the rate of risk. If you are considered a high-risk driver, if you include someone who is of lower risk as your second driver, your risk average drops, which allows the premium to be reduced. Thus, you will be eligible for a cheaper policy.

Remember, age is not the only factor that reduces risk, experience does too. The better the driving history, the lower the risk - the higher the impact it will have on reducing the premium. However, different insurers respond differently. One may cut your cost when adding your mother, whilst another may do the opposite. Do your research beforehand.

how to find cheap car insurance
  • Make yourself attractive to insurers

Remember, insurance rates are based on risk. By showing an insurer you are not the typical high-risk young driver, you stand a better chance at receiving a reduced premium.

Here are some ways to prove you are at lower risk:

I. Installing a security device

By installing a security device such as fitting an alarm or immobiliser proves you are serious about taking care of your vehicle. This can help reduce the premium.


II. Extra driving courses

Believe it or not, attending extra driving courses can reduce the premium.

The Pass Plus course is catered to new drivers. It costs about £170, however, this can vary depending on where you live and the driving school/instructor you pick. Some councils in England and Scotland offer a discount of up to 40% for under-25s, whilst in Wales, it only costs £20!. You can check out Pass Plus here for more information.

The AA provides the driving course, Drive iQ. It combines online learning with practical lessons, aimed at learner drivers. They claim once passed, you are eligible for exclusive insurance deals. Check out these quotes though before signing up for the course.


III. Avoid license points

That’s right, say goodbye to the prospect of living your Fast and Furious dreams if you want to have a clean driving history. If you have points on your licence, your premium cost will be higher. Whilst speeding points remain on your record for four years, insurers check for convictions in the last five years. A speeding conviction is said to affect the price of cover by over 30% whilst a vehicle with defective tyres (CU30) can affect it by more than 60%. It is a serious offense to use a mobile phone whilst driving, and can double your quote and get you three points on your licence. These points will stay on your record for four years! Avoid any of these if you want to pay less of a premium.

  • What is telematics?

This policy is a policy which prices your premium based on how you drive. A device known as a black box will be installed in your car to monitor your driving. Therefore, the better you drive, the less you will pay for the cover.

If you are confident of your driving, you can earn £100s back on your cover through a telematics policy. However, if you are a bad driver, avoid this policy for it could increase your premiums.

Here’s a list of telematic policy providers to check out:

Drive Like A Girl - this policy is aimed at 17-25 year olds who avoid driving between 11 pm and 4 am. It’s not just for girls and it is open to all ages too.

Drive Line (Drive Plus) - This is available to full licence drivers aged 25 and under. A discount will be given upfront.

Co-op - These are aimed at motorists aged 17-25. Download the co-op young driver app to your smartphone and drive 200 miles over at least 10 different days to receive a driving ‘score,’ You will then receive a link via email and a discount up to 20% will be automatically applied to your online quote.

  • Always compare car insurance

Do your research on quotes on comparison sites such as Compare The Market, Gocompare and Confused.com.

Here is what you should look out for:

  1. Check how many times each comparison site offered the cheapest or within £5 of the cheapest quote.
  2. Assess how often each site gave you an unbeatable quote.

A lot of the time comparison sites offer incentives. For example, according to Money Saving Expert, Confused.com gives the cheapest quote for the majority of people, whilst Compare the Market is the next best at returning a cheap quote after MoneySupermarket.

Make sure to double check quotes on insurance provider’s websites just to be sure, this is because some sites make assumptions instead of validating the data.

  • Get Your Quote From an Insurer

Whilst comparison sites can be great, some insurers only offer their products directly. Therefore, it’s important to benchmark your cheapest comparison quotes to the ones you can get from direct providers.

Covid-19 measures.

Many of us are not using our cars as much as normal due to lockdown.

If you don’t plan on using your car for a long period of time and you are allowed to keep your car on private land such as a garage or driveway, you can declare it off the road via the statutory off-road notification (Sorn). Once this is confirmed, your vehicle tax will be cancelled, which may net you a pro-rata refund for the rest of the year. You can then cancel your insurance.

You will however not receive the year’s no-claim bonus and you will often need to pay an admin fee for cancelling. It is really up to you. Whilst you may not save money on the insurance, you will however tentatively save money on the tax.

If you don’t plan on using your car as much,  be sure to read your insurance policy to see if it includes business use. If it does, you are in luck and may be able to reduce this to just social  and commuting purposes. If you have lost your job, you will need to let your insurer know about this.

If you are struggling to pay your insurance premiums because your income has been affected by the pandemic, your insurer should be able to help you with this. You may be eligible for a payment deferral. This is likely to be a short-term measure only.

If you can make part-payments and not full repayments, your insurer may agree to reduced payments, though it may be short-term only.

Remember, these are not guaranteed, and up to the insurer.

If you’re also looking to save some money by purchasing a new car don’t forget to read our ultimate guide for buying used cars.

I hope you find this guide simple and most importantly, helpful! In the meantime, take control of your personal finance in order to attain financial freedom! Good luck 💪😎

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Nova Money (former Cash Coach)