Car insurance for young drivers
As a young driver, car insurance is never going to be ultra-cheap, but we can help you keep costs to a minimum.
There’s nothing quite like the feeling of getting behind the wheel for the first time after you’ve passed your driving test. But nothing can slam the brakes on your driving dreams quite like the cost of car insurance for young drivers.
As a young, inexperienced driver, you’re likely to pay more for insurance than any other age group. But there are ways you can save on your cover. Use our guide to find out how to pay less for car insurance.
What is car insurance for young drivers?
“Young driver car insurance” isn’t a separate type of car insurance policy – after all, young drivers’ car insurance needs are usually no different from those of older drivers. But when car insurance experts talk about young drivers, they typically mean people between the ages of 17 and 25.
While the cover they need is the same as older drivers, younger drivers are considered much higher risk than other groups. This means they’ll usually pay more for the same level of cover. In fact, according to the latest figures from the Association of British Insurers (ABI), drivers aged 18-20 pay 3 or 4 times as much as those in their 50s and 60s.
The good news is that, as with any other age group, there are plenty of ways for young drivers to cut the cost of car insurance.
Why is car insurance for young drivers so expensive?
Government data shows that young drivers are disproportionately likely to be involved in a car accident. Accidents mean expensive car insurance claims. Insurers seek to offset the risk of high payouts by increasing premiums. It follows that a higher risk of claims means higher premiums for younger drivers.
Even if you’re a careful driver from day one, it will take time for you to build up the years of claim-free driving that prove to insurers that you’re the exception to the rule.
There are, of course, other factors that affect how much you’ll pay for car insurance, such as where you live. City dwellers will usually pay more than those living in rural locations, for example. But the higher risk of accidents among young drivers is by far the biggest cause of high insurance premiums. Our guide on how car accidents affect car insurance explains why.
What else affects the cost of car insurance for young drivers?
As well as the higher risk of accidents for young drivers, there are several other factors that affect the cost of your car insurance. Some of these include the following:
- Age. A 17-or 18-year-old will typically pay higher premiums than a 25-year-old. Once you turn 26, you can expect premiums to steadily decline.
- Driving experience and history. For new drivers, it’s difficult to prove you’re a safe driver without a record to speak of. Providers will typically class you as high-risk, pushing your premiums up. But as you build up years of having a no claims bonus, your premium will start to drop.
- Claims history. Conversely, if you need to make a claim, this can push your car insurance premiums up.
- Where you live. Where you live can affect your premiums, especially if you live in a high-crime urban area where the risk is greater compared to rural areas.
- Make, model and value of your car. If you drive a sporty, powerful or high-value car, expect to pay more. Driving a smaller and safer “budget” car is likely to work in your favour.
- Car use. If you have a daily commute in “rush hour” through busy roads, you’re more likely to see higher premiums than if you only use your car for leisure.
What is the cheapest car insurance for young drivers?
Unfortunately, there is no individual policy that will be cheapest for all young drivers. Insurance providers have their own criteria for determining the price of insurance, and no two drivers have the same profile.
As a young driver, black box insurance may prove to be cheaper than regular car insurance as long as you maintain a good driving record. If you don’t drive regularly, you may also be able to save money by using temporary or short-term car insurance.
What are the cheapest cars to insure for young drivers?
For drivers of any age, one of the biggest factors affecting the cost of insurance is the car you drive. As a general rule, bigger, powerful and/or more expensive cars will cost more to insure than compact run-arounds with small engines.
If you’re looking to buy your first car and want to avoid it being prohibitively expensive to insure, check what insurance group it’s in. There are 50 official insurance groups; cars in group 1 will typically be the cheapest to insure, while those in group 50 will incur high insurance premiums.
To give you an idea of what difference this can make, in March 2021, we got quotes for a 21-year-old living in an average risk postcode. In our scenario, a 21-year-old would pay £1,355 to insure a Volkswagen Polo (1.2 S 5d), a car in insurance group 1. The same 21-year-old would pay £2,191 to insure a more powerful Volkswagen Golf (1.8 T GTI 5d 2002) in insurance group 29.
How much does car insurance for young drivers cost?
We’ve crunched the numbers to work out how much you can expect to pay to insure cars in insurance groups 1-10 at each year of a driver’s age between 17 and 30, the period over which typical premiums decline at their fastest rate. After age 30, insurance costs will continue to decline, but more gradually, until you reach your 60s.
Across the scenarios in our analysis, our hypothetical 17-year-old received an average quote of £2,142. The average quote for a 30-year-old was less than a third of this, at £611.
The steepest year-on-year drop happens between ages 25 and 26. Our 25-year-old received quotes averaging £1,241 for cars in insurance groups 1-10, while just one more birthday could see a 26-year-old paying more than 40% less, with an average quote of £730.
Cars in higher insurance groups will be more expensive to insure for drivers of all ages. The cost is likely to be particularly prohibitive for most young drivers. A 17-year-old living in an average priced postcode area and aspiring to own a Tesla Model S (insurance group 50), for example, could expect to pay nearly £4,000 for annual insurance.
|Age||Average premium for cars in insurance groups 1-10|
- Third party. If you are responsible for causing an accident, you’ll be covered for damage to third party vehicles or property. However, it won’t cover any damage to your own car.
- Third party, fire and theft. This will give the same level of cover as third party but will also provide protection against any fire damage to your car or theft of your car.
- Comprehensive. Comprehensive cover gives you the same protection as the lower levels and also protects your vehicle against accidental damage and vandalism.
- Add yourself to a parent’s policy. You could be added as a named driver onto your mum’s or dad’s policy if you’re not the main driver of a car. However, be aware that a young driver added as a named driver when they’re really the main driver is known as “fronting” and is illegal in the UK.
- Learner driver car insurance. If you’ve started having driving lessons and want to practice in a friend’s or your parents’ car, you’ll need this type of insurance. You’ll likely have the flexibility of short-term cover. And if you need to make a claim, it won’t affect the no claims bonus of the car owner’s own annual car insurance policy.
- Temporary car insurance. It is possible to get car insurance cover for a short period of time, usually between 1 and 28 days. This may suit young drivers home from university or if you’re visiting friends or family and need to borrow their car.
- Cover level. The more comprehensive your policy, the more expensive it is likely to be, but the better it will protect you from damage. If you wouldn’t be able to cover the cost of expensive repairs to your own car, a comprehensive policy may be worth considering.
- Benefits and features. Compare which benefits and features are included in a policy carefully – breakdown cover or replacement key cover, for example. You may find that one provider only offers what you need as an optional extra, while another may include it as standard.
- Payment options. If you can afford to pay your annual premiums in one large sum, it usually works out cheaper overall than paying on a monthly basis.
- Pick a smaller, less powerful car. Choosing to drive a small and safe car that is in a low insurance group is likely to lower your premium.
- Limit modifications. Any modifications made to your car to make it look better or drive faster are likely to increase your premiums, so think carefully before making any changes.
- Choose a cover level that suits you. Contrary to what you might expect, comprehensive cover can be cheaper than third party (TP) or third party, fire and theft so it’s always worth checking.
- Add experienced drivers. Adding an older and more experienced driver to your policy as a named driver could help to lower the premium.
- Advanced driving skills. You could be in line for a discount with select providers by taking an advanced driving course, such as the Pass Plus scheme.
- Increase the excess. Agreeing to pay a bigger voluntary excess could make your overall premium cheaper. But remember that your insurer won’t pay out for a claim that costs less than your excess. So be careful about making it too high, as it could leave you out of pocket if damage occurs.
- Avoid paying monthly. If you can, try to pay for your premium in one go as you’ll pay interest if the premium is spread out over the year.
- Limit optional extras if you don’t need them. Think carefully about which optional extras, such as breakdown cover, you really need. Adding extra protection to your policy will generally push the price up too.
- Increase your car’s security. If your car is not currently fitted with an alarm, think about adding one to reduce your premium.
- Limit your mileage. If you start working part time or your long commute becomes much shorter, letting your insurer know about a reduction in your mileage could result in cheaper insurance.
- If possible, park your car off-road. Cars kept in a garage or on a secure driveway are usually cheaper to insure.
- Consider telematics insurance. Having a “black box” fitted to your car to monitor your driving could result in discounts if you drive safely.
- Shop around. Don’t simply choose to renew your car insurance when it’s up for renewal as you could end up paying more than you need. Shop around and compare your options to find the best deal. Keep in mind that the cheapest policy isn’t always the best policy so check the cover details carefully.
What levels of car insurance are available to young drivers?
All drivers are legally required to have at least third party car insurance to be on UK roads. Young drivers can take out the same levels of car insurance cover as any other driver.
Is basic third party cover cheaper for young drivers?
Not necessarily. In practice, comprehensive cover can often be cheaper than third party, or third party fire and theft. This might sound counterintuitive, but it’s in part because many inexperienced drivers automatically opt for third party cover under the assumption it will be the cheapest.
Don’t fall foul of this Catch 22. Researching all your options could net you a better premium and a better policy.
Could a telematics policy save me money as a young driver?
Having a telematics or “black box” policy can help you save on your car insurance if you’re a safe driver. A black box is fitted into your car to measure how well you drive. This data is then assessed by your insurance provider to calculate your premiums based on your driving habits.
However, be careful because black box technology will also capture any bad driving habits. If your driving is poor, your premiums could go up.
What are the alternatives to an annual car insurance policy for young drivers?
What should I be looking for in a policy for young drivers?
No matter what your age, it’s worth considering each aspect of your insurance policy carefully. If you’re new to driving, you may want to consider the following:
How can young drivers reduce the cost of car insurance?
Adding yourself to your parents’ policy
If you share a car with a parent and they’re happy to include you in their cover, you could ask them to add you as a named driver to their insurance policy.
This will likely cause their premiums to rise, but the added cost may be cheaper than if you were to take your own policy out. Even if you have to pay towards their overall premium, you might still save money.
What is car insurance fronting?
Adding yourself as a named driver on your parent’s policy is fine, and a good way to keep insurance costs down, if they’re the person that drives the car most often (the “main driver”).
What you mustn’t do is put your parent, or another experienced driver, down as the main driver of a car and yourself as a named driver (no matter who owns the car) if you, the younger driver, will be driving it more often.
This is a type of insurance fraud known as “fronting”. It’s illegal and could invalidate your insurance policy and even lead to a driving prosecution.
There’s no getting around the fact that car insurance is expensive for younger drivers. If you’re 20 or younger, you can expect to pay upwards of £1,000 a year – or much more if you own a bigger, more powerful car or live in a part of the UK with a higher risk of car crime. But drive safely and avoid making claims, and you’re likely to see premiums drop over time, particularly when you reach your 26th birthday. Until then, shop around and use our cost-cutting tips to avoid paying more than you need to for insurance.
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