BROOKE Donnelly, 17, is looking forward to getting her first car but not so excited about paying the astronomical premiums faced by young drivers.
She and dad Brett, 41, were shocked to find that many of the cars they were looking at buying would mean insurance premiums of around £4,000 or £5,000.
2
The pair, from Hitchin, Hertfordshire, are now hunting for solutions to bring the cost down to an affordable level, but believe that in the best case the policy will cost around £2,500.
Company director Brett, 41, said: “My older daughter’s car insurance at the same age was about £1,800, and that was four years ago, so it seems to have gone up about 120 per cent since then. It’s not right.
“We’re looking at cars at the moment and every registration we type in the premium is coming out at £4,000 or £5,000.”
The pair worked out that to bring the premium down the car needs to be a minimum of 10 years old with a small 1.1litre engine, such as a Citroen C1 or Kia Picanto.
Brett added: “We’re also looking at getting a black box to monitor her driving as well as putting both me and her mum Sasha onto the policy, which will help to drive down the cost.
“But even then it looks like we’ll be paying around £200 per month for Brooke’s insurance.”
Brooke, who as well as studying at school also has a catering job at a private hospital, added: “It will make a big difference for me to be able to drive to work and not rely on lifts.
“After I finish school I’m planning to get a job, which might well involve driving so it’s something I think I will need. I don’t mind having a black box fitted if it helps get the cost down.”
Mum-of-three Anita Randen Green and her husband Neil have also found that the cost of insurance for young drivers is painfully expensive.
The parents spent £3,800 on a second-hand Fiat 500 as a birthday present for their seventeen-year-old daughter Nyla.
They also covered the cost of her driving lessons, £1,500, while the driving test, theory test, and provisional licence added up to £119.
The family managed to get Nyla insured for £1,112 annually with insurer Ticker, which specialises in young drivers, after shopping around for quotes on MoneySuperMarket.
Nyla, from Bristol, said: “I know loads of people who aren’t able to learn to drive because they simply can’t afford it. Everyone I know around my age with a licence has had financial help from their parents.
“I’m a college student and I do part time housekeeping at a local Premier Inn. Public transport links aren’t great where we live so being able to drive is a necessity for me.
“Each month I earn around £300 and I have to spend about £60 to £90 on fuel, which feels like a considerable chunk of my paycheck. I definitely wouldn’t have been able to start driving without a lot of help from my parents.”
2
Anita, a finance business partner, added: “Getting your first car is becoming like stepping onto the property ladder – tougher and tougher for young people these days.
“We covered about 80 per cent of the costs of getting Nyla on the road – around £5,000 – so I don’t know how young people could manage without help.”
Brooke and Nyla are just two of thousands of young drivers who face huge premiums that often cost more than their first car.
A study from the Go.Compare comparison site found the average cost of first-year car insurance was £1,466, but that’s an average for drivers aged between 17 and 21-year-olds. For 17-year-olds it’s much more expensive.
Tom Banks, of Go.Compare, said: “Car insurance for younger drivers will always cost more than those motorists who have been driving for longer, making it important to look around and make sure you’re not paying any more than you need to for a policy.”
We’ve spoken to industry experts to find ways of cutting the cost for teen drivers.
1.Check the engine size
Greg Wilson, a car insurance expert at comparison site Quotezone.co.uk says checking what kind of engine you have is important.
He added: “Be sure to check your vehicle’s engine size and horsepower, both can impact the cost of your premium. Also, some small engines are turbocharged and that can give them more power than might be expected, which will likely cause the premium to increase.”
2. Pay in one go
Another of Greg’s top tips is to pay the annual premium all in one go, rather than pay monthly, to avoid paying interest.
3. Look at the insurance group
Car insurance groups run from 1 to 50, with Group 1 cars being the cheapest to insure.
Graham Conway, managing director of Select Car Leasing says: “You really need to investigate the car’s insurance group long before you consider purchasing it and driving it.
“You’ll still find great little vehicles within that first insurance group, with entry-level versions of best-selling hatchbacks like the VW Polo, Kia Picanto and Hyundai i20 falling into that category.”
Be aware that more desirable trim levels of those very same cars will push them into higher insurance groups.
Graham adds: “Do your homework and really figure out what you can and can’t afford before you get behind the wheel.”
4 Add a named driver
A named driver will also make a difference to your premium, says Liz Hunter, commercial director at comparison site Money Expert.
She explained: “A named driver is an additional person that you add to your car insurance policy, that will then have permission to drive the insured vehicle.
“Adding a more experienced driver to your policy (such as a parent) can reduce the cost of your premium significantly, as it may reduce the overall risk in the eyes of your insurer.”
4. Don’t wait to the last minute
Timing when you take out a policy can pay off.
You’ll likely get a cheaper quote if you sort out your car insurance two or three weeks before the start of the policy, according to Liz.
5. Drive safely
If you claim on your car insurance you’ll see costs become even more expensive.
Julie Daniels, motor insurance expert at comparison site Compare the Market, recommends young drivers to take care when driving and be aware that an accident could push up the cost of premiums year on year.
She added: “There are many factors that influence the pricing of a premium including the driver’s age and address, the make and model of the car and its annual mileage. Having a no claims discount, however, could make an additional difference to the price of your insurance premium.”
Another great way to save on insurance premiums, if you’re a reliable and responsible driver, is through ‘black box insurance’ or ‘pay as you drive insurance’.
Graham says: “These policies allow you to minimise costs by monitoring driving behaviour from a small device discreetly installed in the car, rewarding ‘good’ driving with cheaper insurance.
“Be wary of who else is driving the car, as their bad habits could affect the score you are given, which is updated every seven days and dictates the cost of your policy. Equally, any bad driving on your part will cost you.”
Other metrics taken into consideration are time, place and distance, suggesting that how far you drive and areas with a higher risk of accident or theft could affect premiums.
How to get cheap car insurance
CAR insurance is an essential cost that you hope to never use but will need to cover the costs of theft or damage to your vehicle.
It’s a legal requirement to have car insurance, and going without it could land you with a £300 fine, six penalty points on your licence and even a criminal conviction.
But there are several ways to slash your premiums.
Pay upfront
Insurers give you the choice of paying for insurance monthly or upfront.
Paying monthly spreads the cost of your cover but the insurer adds interest charges which means the average motorist pays around ten per cent more overall.
If you pay for your car insurance annually you don’t pay any interest.
A typical motorist can save up to £225 a year by paying in one go, according to comparison site MoneySuperMarket.
Increase your excess
The excess is what you agree to pay each time you need to make a claim on your policy.
You can usually choose your own excess when setting up a policy and it can be as low as £100 and as high as £500 or more.
The higher your excess, the lower your premium and vice versa.
This means you could bring the cost of your insurance down by agreeing to pay more if you do need to make a claim.
But before you hike your excess, make sure you would be able to pay in the event that you do need to make a claim.
Tweak your job
Certain jobs are seen as more risky than others for insurance purposes.
Making small but accurate changes to your job title can save you money.
For example, swapping your role from “chef” to “caterer” can save you £20, comparison site GoCompare found.
And changing your role from “fast food delivery driver” to “delivery driver” could save you £40.
But lying about your job could invalidate your policy so make sure any changes are legitimate and accurate.
Shop around
Not all comparison sites have the same range of insurers so to get the best price it’s a good idea to check two or three from Go Compare, Comparethemarket, MoneySupermarket and Confused.com.
Insurer Direct Line is also not on comparison sites so check its prices directly.
You can also get a free cash bonus by going via a cashback site such as Topcashback or Quidco.
Save the date
Renewing your car insurance sooner rather than later could save you some cash.
New cover becomes more expensive the closer you get to the renewal date.
But you can buy your car insurance up to 29 days before the policy start date and ‘lock in’ the price you’re quoted on that day.
A typical driver can save up to £265 buying new cover at least 27 days before their current policy ends, according to Go Compare.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.