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Top tips to help your child get affordable car insurance

How to cut the cost of insurance for younger drivers, from black boxes to haggling

Top tips to help your child get affordable car insurance

A third of parents have contributed to their child’s car insurance over the past 12 months with an average spend of around £320, according to new data. 

That’s according to research into younger drivers by comparison site Compare the Market.

With the average annual premium for 17 to 24-year-old drivers hitting £1,281, some parents could be paying a quarter of this annual expense.

While it can be pricey to get on the road, there are ways to ease the burden.

Here, Which? explains how younger drivers can get affordable car insurance and the hidden costs to watch out for.

1. Don’t just look at the premium

You may sometimes think you’ve found a good deal for your child, but look out for extra charges that can drive up their costs.

In particular, look at the excess – the amount they’ll need to pay in the event of a claim. If they’re willing to fork out more money for this, their insurer will reward them with lower premiums. But it’s important they select their excess carefully.

Which? research has found that rising excesses mean drivers could pay more than £200 to claim on insurance.

Also watch out for admin and cancellation fees which have become more common and expensive.

Your child should also check to see if there are any setup and renewal fees, which are separate from the premium.

2. Consider a black box policy

Black box policies – which allow insurers to base premiums on actual driving behaviour – are generally aimed at younger drivers with higher premiums.

Also known as telematics insurance, this involves the insurer installing a small GPS box into the car which transmits information back to them so their performance behind the wheel can be measured.

If a driver’s day-to-day driving passes criteria laid out by the insurer they’ll be rewarded with discounts on their premium.

3. They may be better off paying annually

Insurers will give your child the option of either paying monthly or yearly. While it can be tempting to pay monthly to spread out the costs, it’s usually much cheaper to pay it all in one go.

By paying monthly installments your child is, in effect, taking out a loan from their insurer. Most will charge interest and these rates are not cheap.

Instead, your child could pay for the full year using an interest-free credit card, and repay their debt monthly without incurring interest.

Alternatively, your child could choose an insurer that allows them to pay monthly without being charged interest.

4. Haggle, don’t just auto-renew

If a driver wants to renew their car insurance with the same insurer, they might be able to get a cheaper renewal premium – and for the same amount of cover – by haggling.

Cost comparison sites are an excellent way to get an impression of what an insurer’s rivals will offer, putting a renewal quote into context.

The best prices will generally go to switching customers or to existing customers who have picked up the phone to negotiate.

We have put together a tried-and-tested script to haggling.

5. Think about the level and type of cover you’ll need

There are three different types of car insurance: comprehensive, which is the top level of insurance you can get on your car, followed by third party fire and theft, and third party.

If a driver chooses a lower level of cover it may mean they can get a more generous quote for their insurance.

However it’s worth checking the prices of each level of cover as sometimes comprehensive cover costs less than third party or third party fire and theft.

Younger drivers should assess how often they plan to drive, what they can afford to cover and the type of damage to their car they would be willing to live with.

6. Add a named driver

As younger people are generally considered to be higher-risk drivers, as a parent, putting your name on the policy as a ‘named driver’ can shrink the overall premium.

However, you must never put the policy in your name with your child as a named driver when they’re actually the main driver. This is known as ‘fronting’ and is a type of insurance fraud that can lead to your policy being invalidated.

You could also consider multi-car insurance if more than one member of your family drives. The more experienced drivers are included in the policy, the more potential there is for cheaper insurance.

7. Boost security but be wary of modifications

All drivers could enhance the safety and security of their cars by, for example, installing an alarm, tracker or immobiliser to reduce the premium.

But if your child is going to make any changes, they should always discuss them with their insurer first because sometimes making modifications to a car, such as changing the alloys, can increase the premium.

They should also stick with a cheap-to-insure car if they can, as the type and model can have a significant bearing on the premium.

How do I know if my child is covered?

It is really important to ensure your child has read the policy before they buy.

They should watch out for insurance scammers, who target more vulnerable drivers such as those who are younger and less experienced.

Make sure to check your insurer is authorised by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).

The Financial Services Register lists details of the firms, individuals and other bodies that are currently regulated by the FCA and PRA. Check the register, and only trust those who have been authorised or approved.

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.

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