Why are young drivers’ car insurance premiums so high?
Insurers decide how much you'll pay for car insurance based on how likely they think you are to make a claim.
Drivers considered more of a risk pay more and drivers considered less of a risk pay less. However, the way risk is measured can be crude, especially when it comes to your age.
The reason for this is that drivers at each age extreme - ie those under 25 and those well into their retirement years - are statistically more likely to be involved in serious accidents
So, regardless of how conscientious you are a driver, you’ll be viewed as a higher risk.
As the chart below shows, a driver in their early 20s is likely to be paying about four times more, on average, than a driver in their 60s.
And just to make things a little more painful, policies for drivers under 25 often come with steep compulsory excesses and restrictions in some areas of cover.
How can I get cheaper insurance as a young driver?
If you’re a younger driver, there are ways to reduce the cost of your insurance.
Stick with a cheap-to-insure car
Insurance is a significant cost in running a car, and in turn, the type and model of car has a significant bearing on the premium.
For example, for younger or inexperienced drivers, cars with lower horsepower engines are likely to be much cheaper to insure than high-performance models.
So before you purchase a car, it’s sensible to run an insurance quote for it as part of your decision-making process.
Read Which?'s car reviews to find the right new or used car for first-time drivers.
Add a voluntary excess
The excess should reflect the amount you can afford to pay without the insurer’s support. The higher this is, the lower your premium will be.
Remember, though, that policies almost always come with compulsory excesses beneath the voluntary one you can choose. So check that you're comfortable with what the total of these is.
Add a named driver to your policy
Add an older and more experienced named driver to your policy and the cost of cover is likely to fall.
Bear in mind, however, that it's illegal to put someone down as the main driver if this is not the case.
This practice is known as 'fronting', and if your insurer finds out they may refuse to pay out on a claim and you may lose your no-claims bonus. The insurer may also take legal action against you for fraud.
Consider black box car insurance
With telematics policies - often referred to as ‘black box car insurance’ - your insurer tracks your driving in real time. Depending on the policy and model of car, this may involve the fitting of a GPS device (or ‘black box’) to the car.
If you can prove that you are a good driver you're rewarded, usually with cheaper cover. Drive badly, however, and you can lose any discounts you are entitled to and – if your driving doesn’t improve – your policy can be cancelled.
There are different types of policies available. Some focus solely on how you drive, others help lower your costs by restricting your mileage (which can be ideal if you're an infrequent driver) and some will give you other types of rewards, such as free gifts and high street vouchers.
Find out more in our full guide to how black box car insurance works.
Avoid monthly repayments - if you can
Most car insurers charge interest if you want to pay your insurance monthly - a bit like loaning you the full annual cost of your insurance and having you pay back the loan over the course of 12 months.
If you can afford to pay for your insurance all in one go, you could get a cheaper premium and avoid interest charges.
If not, you could pay an interest-free credit card, and repay your premium monthly without incurring interest. Some insurers might charge you for using a credit card.
Alternatively, you could choose an insurer that allows you to pay monthly without hitting you with interest. Discover who these are in our car insurance fees and charges guide.
Play around with your job title
One of the ways insurers price is through your job title - it is another factor they use to judge the riskiness of a driver and how likely they are to make a claim, according to the insurer's vast bank of statistics on claims.
You can, however, play around with your job title to find one that accurately describes what you do for a living, but results in cheaper premiums. Don't lie - as this will be considered as fraud, but see what fits to secure you the cheapest deal.
Moneysavingexpert.com has a useful tool to help you figure out what could get you a cheaper premium.
Find ways to reduce risk
Let's face it - insurers think that because you're young, you're going to have prangs left, right and centre. So take steps to show them that you aren't as risky as they think. This could include:
- Avoiding modifications to your car
- Taking driving courses, such as Pass Plus
- Adding an immobiliser and extra security
- Cut down mileage
If you live with your parents who also have cars, take a look at multi-car insurance. This enables you to insure all the cars in your household under one single price, and with more experienced drivers in the mix, this could cut down costs.
There aren't many providers offering multi-car insurance, so it's worth checking out the following. This is not an exhaustive list, and the links will take you off to Which?'s unique reviews of car insurers:
- Direct Line
- Hastings Direct
- Sheila's Wheels
Contact a broker
If you’re still having trouble finding suitable car cover, use the British Insurance Brokers' Association's Find a Broker service.
Call them on 0370 950 1790 or check biba.org.uk for more. You can also contact the Which? Money Helpline for advice on finding cover.
How do young drivers buy cheap car insurance?
ALWAYS shop around
This is the golden rule - there is absolutely no reward for loyalty when it comes to car insurance. Never, ever accept your insurer's renewal offer before doing some research and shopping around for the latest prices.
You might find you're being offered a great deal - in that case, accepting your insurer's offer will be right. But most insurers will jack up your premiums in the second and third year - so arming yourself with quotes from competitors will help you challenge your insurer to offer you a better deal.
If you're buying car insurance for the first time, or looking to renew, follow these three essential steps:
Step one: use price comparison sites
Price comparison sites are a great place to start. Punch in your personal details and see what quotes are returned from insurers.
There are four main price comparison sites for car insurance: MoneySuperMarket, Go Compare, Compare the Market and Confused.com.
Try and use all four, and see which returns the cheapest quote. You might find that the same policy from the same provider might be cheaper on one site.
Of course, it's vital to make sure the policy you're getting quotes on is right, including the things that might be added on to your cover and that the excess is at the right level.
Step two: Check insurers not on comparison sites
Step three: Use a cashback website
Cashback sites pay you part of the commission they get from car insurers for clicking on the links on their sites to buy your insurance. You could get cashback worth hundreds of pounds if you buy your insurance through one of these sites.
Only use cashback sites once you've find the right policy at the right price.
Find out more in our full guide to cashback sites.
Do I need to be insured if I'm not driving?
All cars need to be insured, even if they're not being driven.
The only way to avoid paying for car insurance on a vehicle you're not driving is to get a Statutory Off Road Notification, or Sorn.