Young drivers

Why is my car insurance so expensive?

There are a large number of different rating factors used in setting the price for motor insurance.  Average premiums for motorists are closely linked to the average claim for all ages

The main reason car insurance for young drivers is so expensive is because statistics show that young drivers are far more likely to be involved in accidents than drivers aged 25 and older. Drivers aged 17-24 only make up 7 per cent of UK licence holders and drive fewer miles than the average but are involved in 24 per cent of all fatal collisions.

Young drivers are more at risk and more likely to make a claim, which is why car insurance tends to be more expensive than for older drivers.

For more information on age and motor insurance, click here.

What can I do to reduce the cost of car insurance?

There are a number of things you can do drive down the cost of car insurance:

1. Pick the right car

All cars are classified into insurance groups. Before buying your car, do some research to find out which cars are cheaper to insure. The more powerful your car is, the more likely it is to be involved in an accident. As a rule of thumb, the greater your engine size, the higher the insurance cost. The value of your car will also impact on your premium – if it’s more expensive to replace or repair, the premium is likely to increase.

2. Shop around

The UK’s motor insurance market is fiercely competitive and it always pays off to shop around to get the best price.

In addition to checking price comparison sites, it’s worth getting quotes from insurers who only offer their products directly and getting in touch with an insurance broker.

Make sure that you get the policy that is right for you – which may not always be the cheapest option. Remember, car insurance is here to give you peace of mind and there’s no point in buying a policy that doesn’t suit your needs.

3. Drive safely

Ensuring you drive safely is a guaranteed way of keeping costs to a minimum in the long term. If you have no accidents you’ll build up a no claims discount (NCD), which will help keep costs low in the future. Penalty points on your licence can also negatively impact your premium so don’t speed, get behind the steering wheel after having one too many or use your mobile phone while driving.

4. Set the right excess

Paying a higher excess is one way that could lower your car insurance costs. Your excess is a fixed amount that you have to pay if you make a claim. For example, if your excess is £300 and you make a claim for £1,000, your insurer will pay out £700.

As a young driver, you may already have a higher compulsory excess than someone who has been driving for a while. In addition to your compulsory excess, you can set a voluntary excess.

Remember that you’ll have to pay both the compulsory and voluntary excess if you make a claim. If you choose a higher voluntary excess, your premium may go down. But always make sure to choose an amount you can afford to pay.

5. Consider telematics

'Pay how you drive’ motor insurance policies, also known as telematics or ‘black box’ insurance use a device installed in the car to measure how a car is being driven. These policies can help cut the cost of insurance if you are a ‘safer’ driver.

6. Secure your car

Adding extra security features, such as an immobiliser, may help reduce your premium as it’s likely to deter thieves. Keeping your car in a garage or car park may also reduce your premiums as it’s more vulnerable to theft if parked on the street.

7. But steer clear of modifications

Any changes to your car that aren’t safety-related are likely to increase the cost of insurance and should be avoided.

8. Never lie

Even just making a few ‘tweaks’, such as saying your car is kept on a driveway when it is actually kept on the road, can be considered to be insurance fraud. And while adding an experienced driver can result in cheaper insurance, you should never add them as the main driver unless they actually are the main driver. If you lie to your insurer, you risk invalidating your insurance and a criminal prosecution – and as a proven fraudster, you may struggle to get cheap insurance in the future.

What is the ABI doing to reduce the cost of car insurance?

The ABI has long campaigned for reforms to help stem rising motor insurance premiums caused by factors such as the current way compensation pay-outs are calculated and a resurgence in whiplash-style claims.

However, insurers cannot solve this problem alone.

More than any other sector of the driving population, young drivers need the Government to act to help them manage their motor insurance bills and we continue to make the case for introducing reforms to personal injury compensation, freezing the rate of Insurance Premium Tax and implementing Graduated Driver Licencing (GDL)  to protect both young drivers and those already on the road.