Cheapest car insurance for new drivers

Do you feel like you're being quoted far too much for car insurance? Find out how to find cheap car insurance as a new driver.

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As someone new to driving, insurance companies will hit you with higher premiums. That’s because you’re seen as being more likely to have an accident and make a claim. However, there are ways to find discounts and policies that can lower your insurance costs, while giving you the cover you need. Read on to find out how to get the cheapest car insurance for new drivers.

What is new driver car insurance?

There are no special policies that are only available to new drivers, and of course you can pass your test and become a “new driver” at any age. But when many insurers refer to new drivers, they’re often thinking about young drivers (between the ages of 17 and 24, say) who have only recently passed their test and are therefore less experienced drivers.

Why is new driver insurance so expensive?

There are a couple of factors that drive up the cost of new driver insurance.

Firstly, official stats show that young, inexperienced drivers are more likely to be involved in an accident, and therefore to make a claim. Insurers therefore bump up premiums to account for a new driver’s greater likelihood of needing to make a payout.

Secondly, new drivers won’t have had a chance to build up any years of no-claims driving that prove they’re safer drivers than the age-related stats might suggest. This means they won’t qualify for a no-claims discount.

How much does new driver insurance cost?

It’s difficult to give a categorical answer to this, as the cost of car insurance is heavily influenced by age – and you can become a new driver at any age.

What we can tell you is that, on average, young drivers (under 25) pay significantly more for their insurance than over 25s. This will at least in part be down to their typical lack of driving experience, which can result in a higher statistical chance of younger drivers being involved in an accident, and needing to make a claim.

For example, someone that passed their test as soon as possible at age 17, and who wanted to insure a car in insurance groups 1-10, would face an average annual premium of £2,142, according to Finder data.

A 21-year-old insuring an equivalent car would pay a lower, but still pricey, average premium of £1,563.

  • What affects the cost of new driver car insurance?

    There are a number of things that can make car insurance more expensive for one new driver than another. These can include:

    • Age – unfair as it may seem, older newly qualified drivers are likely to pay less than those that pass their test in their teens
    • Car make and model
    • Where you live
    • Average yearly mileage; more miles typically equate to higher premiums

    What type of insurance is best for a new driver?

    As with any driver, new drivers can choose between three levels of cover. These are third-party cover, third-party, fire and theft cover, and fully comprehensive cover.

    Logic should dictate that third party insurance is the cheapest type of policy. This is the most basic type of deal on offer and it’s the minimum level of cover you need to legally drive in the UK.

    It pays out for any damage you cause to someone else’s vehicle or property. Unlike comprehensive cover, it won’t offer any financial help should your car need repairs or replacing.

    However, insurance companies have clocked that younger and less experienced drivers are the main buyers of this type of policy. As a result, many insurers don’t necessarily offer cheaper premiums for third-party cover.

    It’s definitely worth getting quotes for third party, fire and theft and comprehensive insurance too. These might work out cheaper and offer you higher levels of protection to boot.

    What other insurance options are there for a new driver?

    If the cost of buying a traditional, annual car insurance policy makes your eyes water, there are alternatives it’s worth taking a look at. Whether they’re right for you will depend on whether you own your own car and how often you plan to drive.

    • Black box car insurance. This tracks how well you drive using a small device or “black box” installed in your car and adjusts your premiums accordingly.
    • Pay-as-you-go car insurance. These policies charge you according to how much you drive. You pay a basic set rate each month or year, plus a small an additional charge for each mile or hour of driving. Your insurer will usually use a black box device to record the data.
    • Named-driver car insurance. If you’ll be driving a parent or sibling’s car, rather than your own, you can ask them to add you to their policy as a named driver. You can only do this if you aren’t the main driver of the car, though.
    • Temporary car insurance. If you only get behind the wheel occasionally – at weekends, or during university holidays, for example – a policy that covers you every day for a full year may not be worth it. Temporary policies can insure you for a few days or weeks at a time.

    Can ‘black box’ car insurance save new drivers money?

    Potentially, yes. This is dependent on you driving carefully and safely, though.

    Black box insurance is designed to give good drivers cheaper car insurance. Its official name is telematics insurance. A small device is fitted to your car that records your driving performance and sends these details back to your insurer.

    Safe, careful driving will be rewarded with lower premiums over time. But watch out; bad habits such as speeding will see your premiums shoot up.

    How long are you considered a new driver?

    There’s no fixed definition across insurers of how long they’ll consider someone to be a “new driver” after they’ve passed their test. But once you’ve gained a year or two of driving experience and started to build up an insurance no-claims bonus, you should see your premiums start to drop.

    This may happen faster if you passed your test when you were older, as in general drivers aged under 25 pay higher premiums than older drivers.

    Will adding another driver to my policy reduce the cost?

    Danny Butler

    Finder insurance expert Danny Butler answers

    Just as a new driver can add themselves to a parent’s policy, if you have your own car (and therefore need your own insurance), you can add another driver to your policy as a named driver.

    Whether this will save you money depends on the driver in question. But generally, adding an older, more experienced driver is likely to reduce a new driver’s car insurance premiums.

    That’s because insurers regard experienced drivers as lower-risk. If an insurer thinks that your car will be driven by a low-risk driver some of the time, it is likely to reduce the premiums accordingly.

    One word of warning. If you’re the person that will be driving the car the most, don’t be tempted to put a parent or another experienced driver as the main driver and add yourself as a named driver. This is a form of insurance fraud known as fronting.

    What can new drivers do to save on their insurance?

    Car insurance can be a major drain on young drivers’ wallets. While you might see yourself as a responsible road-user, insurance companies will see you as being a higher risk. That’s because younger drivers are statistically more likely to be involved in a collision.

    But there are ways to get a decent deal on car insurance as a young driver. These include:

    • Buy a lower-risk car. Cheaper, less-powerful cars are more likely to fall into a lower car insurance group, which typically means lower insurance premiums.
    • Avoid paying in instalments. Insurers often charge interest on monthly instalments, which means higher costs. If you can, paying an annual lump-sum will save money.
    • Opt for a higher excess. When you make a claim you generally have to pay a certain amount (an excess) before the insurer starts contributing. Agreeing to a higher excess can lower your premium – though make sure you don’t opt for such a high excess that you can’t afford it if you need to claim.
    • Add an experienced named driver. Adding an older or more experienced driver to your policy if they use your car occasionally can lower costs.
    • Consider a telematics policy. Having a black box in your car which monitors your speed, distance travelled and the times you drive can lower costs. Bear in mind it can raise them too if you fall into bad driving habits.
    • Build a safe driving record. Drive responsibly and avoid making any claims, and you will start to earn a no claims discount after a few years.
    • Get an additional driving qualification. Taking an advanced driving course might convince the insurance company you’re safer on the roads and provide you with a cheaper premium.
    • Park in a secure location and up your car’s security. Leaving your car in a garage overnight, if possible, can make insurance much cheaper, as can installing antitheft or other security features in the car.
    • Don’t blindly auto-renew. Car insurance companies often don’t reward loyalty. Each year you should compare car insurance quotes and shop around, it could save you hundreds of pounds. Particularly if you’ve had a change in your personal details, getting married for instance.

    Bottom line

    As a new driver, insurers consider you more of a risk than experienced drivers. But this doesn’t mean you should pay over the odds for car insurance.

    Even though you might not have a lot of experience on the road, you may be a safe and careful driver. If so, choosing a telematics insurance policy could help to lower your premium.

    As any driver should, before deciding on a policy do your research and compare the deals on offer.

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