Reducing car insurance premiums for new drivers is essential due to their limited driving experience, which insurers view as a higher risk. This detailed guide provides various strategies and relevant data to help new drivers lower their insurance costs and make premiums more manageable.
Why is Car Insurance Expensive for New Drivers?
Insurance premiums for new drivers are higher primarily due to their lack of driving experience and the fact that many are young drivers aged 17 to 24. Insurers view young drivers as a higher risk, supported by statistics showing that in 2021, a significant portion of serious car accidents involved young drivers.
Additionally, new drivers haven’t had the opportunity to build a no-claims bonus, which rewards claim-free driving with discounts. Each year without a claim earns a discount, but new drivers must find other ways to reduce their premiums initially.
Opt for a Higher Excess
Agreeing to a higher voluntary excess can significantly reduce your insurance premium. The excess is the amount you agree to pay out-of-pocket if you make a claim. For instance, setting your excess at £200 instead of £50 can lower your premium. However, ensure you can afford this amount should you need to make a claim.
Black Box Insurance
Black box insurance, also known as telematics insurance, involves installing a small device in your car that monitors your driving habits. This device records data on speed, braking, acceleration, and the times you drive. Demonstrating safe driving habits can result in lower premiums upon renewal. This type of insurance is particularly beneficial for new drivers, as it provides evidence of responsible driving to insurers.
Add an Experienced Named Driver
Adding a more experienced driver, such as a parent, to your policy can help reduce costs. Insurance companies view this as lowering the overall risk, as the experienced driver will occasionally use the car. However, ensure the named driver genuinely uses the vehicle to avoid invalidating your policy.
Choose a Less Powerful Car
The make and model of your car significantly affect your insurance costs. Opting for a less powerful car in a lower insurance group can make a substantial difference. Cars are categorized into groups from 1 to 50 based on their performance and repair costs, with group 1 being the cheapest to insure. Generally, cars in lower groups are cheaper to insure due to their lower repair costs and reduced risk of accidents.
Here is a list of cars with the lowest insurance groups, providing affordable insurance options for new drivers:
- Skoda Citigo – Group 1
- Volkswagen Up! – Group 1
- Hyundai i10 – Group 1
- SEAT Mii – Group 1
- Kia Picanto – Group 2
- Fiat Panda – Group 2
- Ford Ka+ – Group 2
- Suzuki Alto – Group 4
- Peugeot 108 – Group 6
- Toyota Aygo – Group 6
- Citroen C1 – Group 6
- Vauxhall Corsa – Group 6
- Nissan Micra – Group 6
- Renault Clio – Group 7
- Dacia Sandero – Group 2
Here are the cheapest electric cars to insure in 2024, focusing on models in the lower insurance groups”
- Smart EQ ForFour (Group 9)
- Volkswagen e-Up (Group 10)
- SEAT Mii Electric (Group 12)
- Renault Zoe (Group 14)
- Volkswagen e-Golf (Group 15)
- Hyundai Ioniq Electric (Group 16)
- Volkswagen ID.3 (Group 18)
- Kia Soul (Group 18)
Car Insurance Groups
Using tools like the car insurance group checker from MoneySuperMarket can help you understand which insurance group your car falls into. This tool allows you to enter your car’s make and model or registration number to determine its insurance group. Cars in lower groups are generally cheaper to insure due to lower repair costs and lower risk profiles.
| Age of Policyholder | Average Premium | Average Claim |
|---|---|---|
| 18-20 | £972 | £3,667 |
| 21-25 | £649 | £2,905 |
| 26-30 | £502 | £2,520 |
| 31-35 | £426 | £2,274 |
| 36-40 | £378 | £2,279 |
| 41-45 | £343 | £2,199 |
| 46-50 | £326 | £2,265 |
| 51-55 | £306 | £2,233 |
| 56-60 | £277 | £2,216 |
| 61-65 | £252 | £2,180 |
| 66-70 | £241 | £2,225 |
| 71-75 | £255 | £2,495 |
| 76-80 | £291 | £2,572 |
| 81-85 | £352 | £2,886 |
| 86-90 | £415 | £3,690 |
| 91+ | £478 | £3,656 |
Improve Your Car’s Security
Enhancing your car’s security can lower your insurance premiums. Installing alarms, immobilizers, or other security devices makes your car less susceptible to theft, reducing the risk for insurers. Additionally, parking your car in a secure location, such as a garage or a driveway, rather than on the street, can further decrease your insurance costs.
Practice Defensive Driving
Defensive driving involves anticipating potential hazards and taking proactive steps to avoid them. This practice not only keeps you safe but also helps maintain a clean driving record, which can lower insurance costs over time.
Understand Policy Terms
Make sure you understand all the terms of your insurance policy, including what is covered and what is not. This knowledge helps you avoid unexpected expenses and ensures you have adequate coverage.
Compare Multiple Quotes
Always compare quotes from multiple insurers. Prices and coverage can vary significantly, so shopping around can help you find the best deal.
Consider a Driving Course
Completing an advanced driving course can sometimes qualify you for insurance discounts. These courses teach skills beyond the basics, improving your driving and reducing your risk profile.
Avoid Modifying Your Car
Car modifications can increase insurance premiums. Insurers see modified cars as higher risk due to potential increased performance and attractiveness to thieves.
Use Public Transport Occasionally
Reducing your annual mileage can lower your insurance costs. If possible, use public transport for some journeys to keep your car usage and associated insurance premiums down.
By considering these points, new drivers can better manage their insurance costs and ensure they are adequately covered.
Maintain a Clean Driving Record
Building a no-claims discount (NCD) is one of the most effective ways to reduce your insurance over time. Avoiding accidents and claims helps you accumulate NCD years, which insurers reward with significant premium discounts. This discount increases with each consecutive year without a claim.
Consider Short-term Insurance
If you need insurance for a short period, consider temporary car insurance. This type of insurance provides comprehensive coverage for durations ranging from one hour to 30 days. It’s a flexible and cost-effective solution if you don’t need annual coverage, and it won’t affect the primary policyholder’s no-claims discount if you’re driving someone else’s car.
Review Your Policy Regularly
Ensure your insurance policy still meets your needs. If you have named drivers who no longer use the car or if your annual mileage has decreased, updating these details can reduce your premium. Being truthful and accurate with these updates is crucial to avoid invalidating your policy.
Select the Right Type of Insurance
Choosing the appropriate level of coverage can also affect your premiums. While comprehensive insurance offers the most protection, third-party or third-party fire and theft policies might be cheaper initially. However, comprehensive insurance could be more cost-effective in the long run, especially for new drivers, as it covers a wider range of potential incidents.
Types of Car Insurance
- Comprehensive: Covers damage to your car and others, theft, and fire.
- Third Party, Fire, and Theft: Covers damage to others, and your car in case of fire or theft.
- Third Party Only: Covers damage to others but not your car.
Here are three insurance companies in the UK that offer policies specifically designed for new drivers:
- Marmalade – Marmalade specializes in insurance for young and new drivers, offering telematics (black box) insurance, named driver insurance, and pay-as-you-go options. These policies allow new drivers to earn no-claims discounts and enjoy flexible coverage (We Are Marmalade).
- MyFirst – MyFirst provides affordable insurance options tailored for young drivers, including hybrid policies that transition from learner to new driver insurance without additional costs. They offer telematics options and focus on fair pricing based on driving behavior (MyFirst).
- Go Girl – Go Girl offers comprehensive car insurance for new drivers with benefits like coverage for personal belongings and a courtesy car during repairs. They also provide the option to add RAC breakdown cover and offer policies without telematics (Go Girl Car Insurance).
