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How young drivers are saving £257 a year on car insurance

The cost of driving rises for 17-24-year olds

The annual cost of running a car has jumped by £60 over the past six months for young drivers, pushing their driving bill to more than £2,400 a year, according to new data. 

Drivers aged 17 to 24 now pay, on average, £2,442 a year to run their cars, compared with £2,381 in February 2018.

We take a look at why young drivers are facing a hike in their car bill and reveal one nifty trick that could shave around £257 off of your annual car insurance bill.


Why have driving costs increased for young drivers?

The price of car insurance has jacked up the rising cost of running a car for young drivers, according to Compare the Market’s latest Young Driver Index.

Since 2016, the average premium for young drivers has risen 5.4% on average; jumping from £1,257 to £1,324 today.

Overall, car insurance premiums account for over half the cost running a car for 17-24-year olds.

The table below shows a breakdown of how much it cost younger drivers to run a car over the past six months alone.

Expense Cost % of total cost
Insurance £1,324.69 54.24%
Fuel £891.41 36.50%
Road tax £115 4.71%
MOT £54.85 2.25%
Breakdown cover £56.41 2.31%
Total cost per year £2,442.36

Source: Compare the Market

Why is car insurance so expensive for young drivers?

Insurance companies calculate your premium according to how risky they think you are to insure.

As a general rule, the higher your risk profile, the more expensive your premium is likely to be.

Statistically, young drivers are more likely to be involved in accidents than drivers over the age of 25 and, according to the AA, a quarter of drivers under the age of 25 have been involved in a serious traffic collision.

On top of that, the fact that young drivers won’t have had much time to build up a no-claims bonus, also contributes to them having to foot a higher bill, too.

Can young drivers save money on their car insurance?

Savvy drivers who shop around have been found to benefit from cheaper car insurance premiums according to Compare the Market’s research.

The figures showed that 17-24-year olds who shopped around for car insurance saved a whopping £257 on average, compared with drivers in the same age range that did not.

Dan Hutson, from Compare the Market, said: ‘For those paying unaffordable premiums, it is essential that young people shop around for the best deal to minimise the cost.

‘Switching to the cheapest premium on the market would save a young driver an average of more than £250, which could well be the difference that makes driving possible.’

Black box insurance (or telematics insurance) could also help young drivers to save on their premium.

Black box insurance works by an insurer installing a small GPS box in your car which monitors your driving to measure your performance behind the wheel. Some car insurance providers may measure how you drive through a smartphone app instead.

Certain insurers will reward you for good driving by returning a portion of your premium at renewal, giving you a bonus based on low mileage or giving you a reward at renewal. While black box insurance could help you to cut costs as a young driver, you can also be penalised for bad driving.

Penalties include anything from providers increasing your premium to cancelling your cover altogether.

Finding cheap car insurance for young drivers

Finding a reasonably priced car insurance deal can be tricky for young drivers, but these tips could help you save money on your premium.

1) Find a cheap car to insure

The type of car you have will affect the cost of your premium. Insurers rank cars on a scale of 1 to 50 – 1 being the cheapest car to insure and 50 being the most expensive.

An insurer will take the security features on the car and the cost of fixing it if it breaks down into account. Ultimately, the cheaper a car is for an insurer to repair, the cheaper your premium is likely to be.

2) Shop around

Comparing quotes from different insurers can help you save hundreds on your car insurance, especially as a young driver. Using price comparison websites is a great way of seeing whats on offer.

While price is an important factor to consider, avoid just going for the cheapest policy as it may not give you the cover you need.

3) Add an experienced second driver to the policy

Try adding an older more experienced named driver to your policy, if you can, as it could bring down the cost of your premium.

This is because, for insurers, the fact that a more experienced driver will also be using the car, reduces the chances of an accident concurring.

However, be careful here. ‘Fronting’ is a term used to describe someone falsely claiming to be the main driver on a car insurance policy to reduce the cost for their child.

Most commonly, a higher-risk driver – such as a younger person who has only recently passed their driving test – is added as a named driver to a car insurance policy, when they are actually the main driver or owner of the vehicle.

If a driver is found to be fronting after being involved in a car accident or making a car insurance claim, they may have all or part of the insurance claim refused.

In addition, their policy could be cancelled and they could face prosecution for fraud, which can lead to a criminal record.

Check out our car insurance guide for more help and tips on how to find cheap car insurance and for impartial car insurance company reviews.

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