“What? We are not paying £2,000 on car insurance for our son.”
This is what you would have heard me grumbling when John shared the outcome of his enquiry to our car insurance provider. I’d have to say as well that this is what we were quoted after procuring an older, smaller, less powerful and cheaper car which our son can use to learn to drive.
Just to save some drama, we did find cheaper insurance; approximately £1,300 cheaper. We did it by shopping around and having our son insured as a learner driver.
Soon, after our son passes his driving test, we’ll have to look for car insurance again. Hence, to be prepared, I researched ways to keep car insurance for young drivers low. Some are identical to the general ways to pay less on car insurance I shared with you last week so I won’t be repeating myself.
Here are five ways to keep car insurance for young drives low that are, more or less, specific to seventeen years olds.
Shop around for insurance
This is as common sense as common sense goes.
Still, in many cases our laziness, or confidence in our current insurer, prevails and we fail to shop around for insurance.
Shopping around for car insurance, and car insurance for young drivers, can save you hundreds of pounds. Also, today comparing prices is no rocket science and takes little time; you just ought to use one of the comparison websites.
Get a cheap car to insure
Do you know what was one of the mysteries of car insurance for young people John and I were puzzling over?
Here it is:
When we looked, it was an issue to find affordable insurance for a small, older car. Our friend insured her son on her old BMW. How does this work?
What I found is that, when it comes to cars, the level of premium depends on many factors including: cost of the car, how powerful/fast the car is, cost of maintenance, cost of parts etc.
(If nothing else, now I know why ensuring a Mercedes will always be expensive – the maintenance cost of these things is rather large.)
What I also found is that, based on the premium factors, there are ‘car insurance groups’. Before buying a car for your teen offspring, it’s an idea to check the cheapest cars to insure. We are pleased to say that our son is learning on a ten years old Hyundai i10 which is one of the ten cheapest cars to insure. And it is a pleasure to drive; at least in town.
(Oh, and I always find it problematic that to keep the costs of car insurance for young drivers low, they end up driving small cars that are not always the safest in traffic. Still, this is life, and life is not always fair. Just, next time you are on the road, remember to be extra careful when you see a small car – very likely it is driven by a young driver.)
Use technology as proof of competence
Driving competence is one of the factors affecting the level of car insurance premium. This is a bit of a conundrum for young drivers: to keep insurance costs down you need evidence of driving competence and you can’t prove driving competence before having driven for some years.
This ‘catch 22’ is broken using technology to collect evidence of driving competence.
For instance, many insurance companies offer reduced car insurance rates when customers select to use black box technology. Makes sense since even the knowledge that driving behaviour is monitored makes one more careful driver. As I see it, the only problem with black box insurance is that a device must be installed on the car and this is a bother.
Another technical way to provide evidence of driving competence is to use a Dash Cam. There is a saving to be made here: using Aviva’s Drive app transforms any smart phone into a dash cam and can save one the cost of buying a dedicated Dash Cam (one can get a decent one of these for £50 or so). On top of that, getting a decent score on one’s driving proficiency (between 3 and 10 points) means that motor insurance premium may be reduced substantially.
Some insurers offer, what looks like, a cheaper option when you take out car insurance for certain number of miles (let’s say 5,000) per year.
This is not always a good thing because were you to exceed this mileage the costs increase very steeply.
Have the young driver as a ‘named driver’
A ‘named driver’ is a person insured to drive a car in which another person does most of the driving. Insuring a young driver as a named driver on the policy of an experienced driver certainly keeps the costs down.
Where is the snag?
Well, the primary policy holder, or experienced driver, really must do most of the driving and own the car. Otherwise, they may be complicit in ‘fronting’ which is a form of insurance fraud.
It is well worth exploring ways to keep car insurance for young drivers affordable. Estimates show that the average yearly car insurance premium for drivers under the age of 25 in the UK is approximately £1,500 – not a trivial amount of money by any accounting.
As tempted as I am to agree with prominent members of the FIRE (financial independence and early retirement) movement that cycling trumps cars any time, realism prompts me to accept that we live in a country, and age, where life is that much harder when you don’t drive.
Have you insured a young driver recently? What was your experience?
Editor’s note: While this post was developed in collaboration with Aviva, The Money Principle takes full responsibility for the research, ideas and opinions shared here.