Car insurance for new drivers can be expensive. For the youngest new drivers between the ages of 17-20, annual insurance premiums average around £1,800 and while car insurance for 21-25 years old isn’t as expensive, it still costs on average more than £1,000.
Why is it so expensive for these groups? And what can you do to lower the premiums and get the best price? Read on to find out everything you need to know about car insurance for new drivers.
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Why is insurance for new drivers so expensive?
Car insurance for new and young drivers is so expensive because they’re seen as high risk drivers. According to statistics they are more likely to be involved in an accident on the road due to lack of experience or because of poor standards of driving i.e. overconfidence, drink/drug use or mobile phone use.
This makes car insurance expensive because insurance premiums are calculated based on risk. For example the latest statistics from AA and the Department of Transport show that young drivers are a third more likely to die in an accident compared to more seasoned drivers and that 23% of all young drivers are involved in an accident in their first two years of driving.
Because of these statistics insurance companies raise their premiums to compensate for the fact that they are more likely to have to pay out.
Ways to lower your premiums
Having just paid for weeks (in some cases months) worth of driving lessons, a driving test and the prospect of maintenance, car tax and fuel on the horizon, expensive car insurance is the final nail in the financial coffin. As such, it’s important new drivers try to reduce the financial burden of motoring especially as the majority are young drivers without high income or much in the way of savings. Here are eight ways you can lower your premiums.
Consider black box insurance
Black box insurance, or telematics insurance, can be a great way to reduce your car insurance cost if you’re confident in your driving and don’t mind being monitored. Your insurance provider will monitor your driving behaviour and amend your premium based on how safely you drive. This means that your premium will decrease or even increase depending on your use of the vehicle.
There are three different devices that are used in this type of insurance:
- Black box – this is where your insurance provider installs a black box (like in planes) in your car, which is then used to track your driving through GPS.
- Plug-and-drive – similar to black box devices, plug-and-drive devices track your driving through GPS but rather than being installed by your insurance provider it simply plugs into a charging point/cigarette lighter.
- Mobile App – mobile applications also track your driving through GPS but don’t require any physical hardware installation and aren’t offered by all providers.
As you can see from the table below, black box/telematics insurance can lead to some huge savings for young and new drivers, with an average of over £800 saved for drivers between 17-19 and an average of nearly £400 saved for those between 20-24.
However, black box insurance may not be suitable for you because it could lead to an increase in premiums. As we mentioned before, If you’re deemed to be driving unsafely then your premium will increase and driving unsafely doesn’t just mean reckless driving. Here are three other ways your premiums could increase because of black box insurance:
- Driving at night or unsociable times – insurers can deem regular driving at night more risky due to poor visibility.
- High mileage – more time on the road is seen as higher risk.
- Driving busy roads – busy roads are seen as higher risk.
Look at smaller, less powerful cars
In order to get an insurance quote on your new car, you’ll be asked for details of the vehicle and choosing a cheaper, safer or less powerful vehicle will most likely result in lower premiums. This is because parts won’t cost as much to replace, it’s less likely to be involved in an accident if performance is restricted and it’s likely to be deemed less of a risk for theft as it’s less attractive to thieves.
To help you find a small cheaper alternative, here are some of the cheapest cars to insure in 2020:
- Citreon C1 – avg. £1,181 p/y
- Toyota Aygo – avg. £1,182 p/y
- Volkswagen Up – avg. £1,215 p/y
- Ford KA – avg. £1,225 p/y
- Fiat 500 – avg. £1,270 p/y
- Vauxhall Corsa – avg. £1,342 p/y
Add a named driver
Adding an experienced driver to your policy if you’re a new/young driver will show the insurer that it won’t just be you using the car, so the price will be reduced. This is because an experienced driver is a low risk driver, this will make you appear as a lower risk when calculating your premium as it won’t just be you driving the vehicle.
Remember: check the T&Cs of policies when shopping around online for any exceptions/limitations which may impact your decision.
Increase your excess
Excess is how much you can afford to pay towards the total for any repairs your car may need in the event of a claim.
Increasing your excess reduces your premiums because not only will the insurer have to issue less money when it comes to paying for repairs, but because it also increases your trustworthiness as a customer.
By setting a higher excess, it’s almost guaranteeing that you won’t make any superficial or false claims as you are more likely to be negatively impacted because you would have to pay the excess and see your premiums increase.
Remember: only set the excess to a figure you are certain you can afford. If you can’t afford your excess because you only setit high to reduce your premium, your insurer could refuse to process your claim.
Use a comparison site
Just like any savvy shopper would go to different stores selling the one item they need in order to get the best price, insurance comparison websites do this for you by working with multiple insurers and showing you the cost of each one after you’ve inputted your details.
Here are a few comparison sites you can use to get some quotes on your insurance. We recommend running quotes on them all to be sure that you get the cover you need for the price that best suits you.
When comparing quotes remember that the best value for money isn’t always the one with the cheapest price. Make sure to also compare the terms of the policies as some will differ in extent of the cover.
Remember: while comparison sites are good places to start your search, not all insurers are listed on them. DirectLine for example prides itself on not being listed on comparison sites.
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Store your car somewhere safe
Where you say you store your car impacts how much you will pay for insurance and you will be asked this when filling out your quote. An insurer will want to know whether or not the car is parked safely overnight and will ask questions relating to physical address and facilities.
If your address has off-street parking such as a driveway or a secure garage, you’re likely to receive a lower quote than if you’ve got to park your car on the street or away from the property because this will be deemed as a higher risk.
In the event that you have to park your car on the street, the insurer will likely use your postcode to quantify the risk of the area. This means you’re likely to be negatively impacted if you live in a city or a notoriously rough part of town.
Remember: safe always means lower risk and lower premiums. If you’ve got a garage but it’s too full to store your car, it might be worth having a good clear out to help reduce prices.
Drive fewer miles
Another question your insurance provider will ask you when filling out your quote is how many miles per year you drive on average. This will affect your insurance because the more miles you drive, the more likely you are to be involved in an accident. As a result your insurer will likely quote a higher premium.
However, driving fewer miles will have the opposite effect and reduce your premium. Find ways to save mileage by car sharing to work, walking/cycling when possible or taking public transport for longer journeys.
Remember: it’s important to be honest when starting your expected mileage or you may risk reducing your claim amount or even voiding your insurance.
If you can, pay upfront
How you pay for your car insurance can also affect how expensive your premium will be. You’ll be given the option to pay monthly or for the year once you’ve decided on a policy, and it’ll be cheaper overall to do the latter. However, this is only advised if you have enough saved up and can afford to do so, especially as the premiums are much higher for new and young drivers.
Monthly payments are more expensive than the flat annual amount because they are similar to finance payments where you receive the full cover but don’t pay for it all until the final month of your policy. This means for the months up to the final payment you will be paying interest. However, monthly payments can be beneficial because it spreads out the cost which is convenient if you have a lot of outgoings or simply can’t afford to pay all at once.
Will a driving course lower my premiums?
Advanced driving courses seek to further train drivers and help them become safer and more observant while on the roads. Examples of driving courses include the government backed Pass Plus and IAM RoadSmart.
While some insurers will recognise an advanced driving course as a step towards becoming a lower-risk driver and adjust your premiums accordingly, not all insurers are alike and others may not reward your effort.s
We recommend that you weigh up the cost of the course and the insurance together before making a decision. It might also be worth contacting the insurer beforehand to see where they stand or researching online to see if others have received a discount having completed a driving course.
Remember: even if the course doesn’t result in short term savings with a reduction in insurance, it may aid long term savings by helping you reach your no claims bonus.
How long will it take before my insurance price drops?
Unfortunately there’s no magic number when it comes to seeing insurance price drops, but usually the first three years of driving are the most expensive. With your first three years out of the way, you should notice your premiums steadily going down each year as you build up a no-claims bonus. This could even come as early as your first renewal, provided you don’t upgrade to a beefier car or change any details of your application that will negatively impact your quote.
Although a lot of people think insurance costs suddenly drop at the age of 25, this is not guaranteed. While it’s true that insurers may no longer classify you as a young driver and that insurance costs decrease in line with experience, what’s most important is that you continue to build up a no-claims bonus.
What’s a no-claims bonus?
So what is a no-claims bonus (NCB)? A NCB is something you build up over time as you continue to drive without claiming on your insurance policy. For example, an insurer may offer a five-years no-claims bonus where drivers who have driven for the last five years or more without claiming on their insurance will be eligible for a reduction in their insurance costs.
A NCB reduces your insurance premium because insurers will see you as less likely to make claims in the future. This means that the longer your streak continues the cheaper your premiums will become and a high NCB has been known to more than halve the costs of insurance.
Should you have a minor accident where repairs are perhaps less than the excess price you volunteered in the contract, you don’t have to make a claim and can keep your no-claims bonus. However, you’ll still need to report the accident for the insurer’s records otherwise you risk voiding your insurance.
However, if you were to be unfortunate enough to have an accident where you needed to claim on your insurance, your bonus would be reduced or completely cut depending on how long your NCB is. In the event of a claim, your no claims bonus will be reduced by two years as you can see in the table* below:
*figures shown may not be representative of all insurers’ conduct.
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FAQs
Is car insurance cheaper at 18 than 17? ›
Younger drivers - and teenagers in particular - pay more for car insurance simply because they're statistically more likely to be involved in a road accident. Less experience on the road means you're a higher-risk driver – so you'll be more expensive for insurers to cover.
Which insurance is cheapest for new drivers? ›MoneyGeek found that GEICO is the cheapest for new drivers in their early 20s; Allstate, GEICO and State Farm are cheapest for new teen drivers and State Farm is cheapest for adults who are new to driving.
What is the average cost of car insurance in the UK? ›Quickly compare over 100 UK insurance providers. Powered by QuoteZone. In the second quarter of 2022, the average cost paid for car insurance in the UK was £419 a year according to the ABI.
Why is new driver insurance so expensive? ›Young drivers are more expensive to insure because they're statistically more likely to have an accident — around 25% of all claims are made by drivers under the age of 25. Insurers also look at lots of other things when working out how much you should pay for a policy, including your: Vehicle. Job title.
Can I put my 17 year old son on my car insurance? ›Insurers typically allow you to add up to three named drivers to your policy, so you can add your child and keep your partner as a named driver. Adding a child as a named driver can be cheaper than taking out a separate car insurance policy for that child.
Can a 18 year old get insured on a 2 Litre? ›In a word – yes. Your 18 year old can be added to the family car insurance policy.
Which type of car insurance is cheapest? ›State-minimum liability coverage is the cheapest type of car insurance. Liability-only insurance is $1,333 cheaper on average than a full-coverage policy. Liability-only car insurance could help you save if your car isn't worth much and you don't have a car loan or lease.
Can I get car insurance without a car? ›You can get car insurance without a car by buying non-owner car insurance. To get this policy, you must have a valid driver's license and you cannot own a car. Most insurers also mandate that you don't have regular access to a car, such as a car owned by another member of your household.
Are newer cars cheaper to insure? ›Is it cheaper to insure a new or old car? Unfortunately, there's no clear answer to this. The cost of your premium will depend partly on your car - generally the newer the car, the better its safety and security.
How much does car insurance cost for a 19 year old UK? ›How much does car insurance cost for young drivers? Car insurance premiums have always been relatively high for young drivers – in the first three months of 2022, drivers aged between 17 and 19 paid over £1,800 a year for cover, while those aged between 20 and 24 paid over £1,200 a year.
Why is my car insurance so high UK? ›
Risk factors
Insurance is based on risk, so if an insurer thinks you're high-risk, they're likely to charge more. Some risk factors are obvious. If you get points on your licence you're likely to see your insurance costs rise - but others like where you live or your occupation are less so.
Age and car insurance
As a general rule of thumb, you can expect to pay the most for your car insurance when you're under 25. Once people are over 25, they tend to find that the cost of their car insurance starts to fall. The price usually declines gradually between the ages of 25 and 60.
On average, drivers will see their premiums begin to fall around age 25. This reflects the lower risk posed by drivers in their mid-20s as they gain driving experience and maturity, compared to a 17-year-old who has just passed their test.
Does car insurance go down after first year? ›How much will my car insurance go down after 1 year? That depends entirely on you and your driving. If you've banked one year of no claims, its likely your insurance premium will be lower after twelve months, provided no other circumstances have changed.
Does car insurance reduce at 21? ›Turning 21 could mean cheaper car insurance! 21 is the magic number for young drivers' insurance. Statistics show that you're less likely to be involved in an accident if you're 21 and over. It means insurers now view you as a lower-risk driver so you can save valuable pounds on your insurance!
Why is it so expensive to add child to car insurance? ›Some of the biggest factors are age and length of time licensed. As teens are new drivers, insurance companies consider them high-risk and rate policies based on this. There are many carriers who do offer programs and discounts to offset the rate increase caused by adding a teenager to your policy.
Is it cheaper to add my daughter to my insurance? ›No. You don't have to add your child to your car insurance policy. But it will be less expensive than the child getting their own policy. “You're not required to add a teen driver to your car insurance, but it's more cost-effective to do so,” says Melanie Musson, a car insurance expert for CarInsuranceComparison.com.
Is it cheaper to get insured on parents car? ›It's cheaper than buying your own car
These include monthly insurance for learner drivers, Pay as You Go Insurance which allows you to pay by the mile, or annual cover up to 10,000 miles per year (provided you're not the main driver, of course).
| Car Insurance Company | Annual Cost Estimate | Monthly Cost Estimate |
|---|---|---|
| Geico | $3,161 | $263 |
| State Farm | $3,340 | $278 |
| American Family Insurance | $3,641 | $303 |
| Nationwide | $4,132 | $344 |
You need your own insurance as a learner driver if you're practising in a car you own. Your family member or friend will usually be covered on this. If you're practising in someone else's car, you need to either: make sure you're covered by the car owner's insurance policy as a learner driver.
How can I get cheap insurance at 18 UK? ›
- Choose a car in a low insurance group. ...
- Add a parent or experienced driver. ...
- Add a voluntary excess. ...
- Choose a black box policy.
- Liability coverage. Protects you if you cause damage to others and/or their stuff. ...
- Collision coverage. Covers your car if you hit another car, person or non-moving object (like those darn ornamental rocks cousin Todd has at the end of his driveway). # ...
- Comprehensive coverage.
Among the factors which will determine the premium you pay for your car are your gender, age, marital status, where you live and a financial background check. These factors have a bearing because the statistics collected by insurers show that they have an effect on the likelihood of accidents or other incidents.
Is driving without insurance illegal? ›Auto Insurance
You cannot legally drive in any state without demonstrating financial responsibility for damages or liability in the event of an accident. In most states auto insurance is mandatory as proof of this responsibility.
No. There was a time when many fully-comp policies automatically gave you third-party insurance to drive any car, but those days have gone. So even if you're fully covered for your own car, don't assume you're insured to drive other people's cars otherwise you risk breaking the law.
How much is non owner car insurance? ›How Much Is Non-owner Car Insurance? Non-owner car insurance is typically cheaper than a standard liability policy. According to our market research, costs range from $200 to $600 per year. Typically, a non-owner car insurance policy does not include a deductible.
Can 2 people insure the same car? ›You and your partner can both take out separate policies for the same car. Car insurance policies are for both the vehicle and the driver, so it's perfectly fine, legal and common for two people to be insured on the same vehicle under separate policies. There are a few reasons why you might consider doing this.
Is insurance higher on a new or used car? ›You'll likely pay less for insurance.
Insuring a used car is usually cheaper than insuring a new one. Newer cars are more expensive to repair. New vehicles have newer technology, which drives up loss costs and how much insurers dole out to cover claims.
This amount may be very different from what you originally paid due to factors like use, damage, and depreciation. But even with depreciation (which can be as much as 20% after the first year), it usually costs more to insure a new car than a used one, because it will likely have a higher actual cash value.
Why do older cars have higher insurance? ›Consider repair and replacement costs: Older vehicles can cost more to insure because they can be more expensive to repair due to hard-to-find parts. Consider how much you'll need to spend to make repairs to your older car.
What age is car insurance cheapest? ›
Experienced drivers are less likely to have accident claims, which means they cost less to insure. At Progressive, the average premium per driver tends to decrease significantly from 19-34 and then stabilize or decrease slightly from 34-75.
What age does car insurance go down? ›On average, drivers will see their premiums begin to fall around age 25. This reflects the lower risk posed by drivers in their mid-20s as they gain driving experience and maturity, compared to a 17-year-old who has just passed their test.
How can I get cheap insurance at 18 UK? ›- Choose a car in a low insurance group. ...
- Add a parent or experienced driver. ...
- Add a voluntary excess. ...
- Choose a black box policy.
How much will my car insurance go down after 1 year? That depends entirely on you and your driving. If you've banked one year of no claims, its likely your insurance premium will be lower after twelve months, provided no other circumstances have changed.
What gender pays more for car insurance? ›Men tend to pay more for car insurance overall, though the difference is slight — about 1%. The difference is most pronounced for teens and young adults.
Is it more expensive to insure a new or old car? ›And getting insurance on a new car often will cost more simply because it's more valuable than an older one. One factor that goes into setting your auto insurance rates is the type of car you're buying. Generally, pricier cars cost more to insure because the cost to repair or replace them is higher.
Does credit score affect car insurance? ›Your credit score is a key part of determining the rate you pay for car insurance. Better credit often gets you a better rate, and worse credit makes your coverage more expensive. Poor credit could more than double insurance rates, according to a nationwide analysis of top insurers.
Is car insurance cheaper for females? ›Women's car insurance is generally cheaper than men's because insurers have found a statistical correlation between a driver's gender and the cost and frequency of car insurance claims. Men, on average, simply drive more than women.
Why is my car insurance so high? ›Among the factors which will determine the premium you pay for your car are your gender, age, marital status, where you live and a financial background check. These factors have a bearing because the statistics collected by insurers show that they have an effect on the likelihood of accidents or other incidents.
How much does insurance go down after 1 year no claims? ›It can save you money. Even after just one year of claim-free driving, you can earn a discount of up to 30 per cent on next year's car insurance costs. After five years this could be as much as 60 per cent.
How much does car insurance cost for a 19 year old UK? ›
How much does car insurance cost for young drivers? Car insurance premiums have always been relatively high for young drivers – in the first three months of 2022, drivers aged between 17 and 19 paid over £1,800 a year for cover, while those aged between 20 and 24 paid over £1,200 a year.
Can a new driver get temporary car insurance? ›Temporary car insurance for newly qualified drivers is the easiest and simplest way for new drivers to be able to drive a car. You won't have to worry about having to search through car insurance quotes and the cost of car insurance.
Can a learner driver have their own insurance? ›You need your own insurance as a learner driver if you're practising in a car you own. Your family member or friend will usually be covered on this. If you're practising in someone else's car, you need to either: make sure you're covered by the car owner's insurance policy as a learner driver.
Does car insurance reduce at 21? ›Turning 21 could mean cheaper car insurance! 21 is the magic number for young drivers' insurance. Statistics show that you're less likely to be involved in an accident if you're 21 and over. It means insurers now view you as a lower-risk driver so you can save valuable pounds on your insurance!
Does car insurance lower after 6 months? ›In most cases, a six-month policy is going to be cheaper than a 12-month policy because you are paying for coverage over a shorter period of time. However, if you compare your car insurance price on a monthly basis, it may not be much different between a six-month policy and a 12-month policy.
How much does car insurance go down after 2 years no claims? ›How much discount will you get? All insurance companies have their own no claims discount scale, but a typical example might be: 30% discount after 1 year's claim-free insurance. 40% discount after 2 years.