Car insurance for your first car

If you've just bought your first car, consider your options and how to save money on your car insurance.

Updated

If you’ve just shelled out a fair amount on your first car, you’ll want to keep your car insurance premiums to a minimum. But as a new driver, you probably have little experience at driving, which means you’ll probably pay much higher premiums. As a first-time driver, understand what your options are and how you might be able to pay less.

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Why do I need car insurance?

All drivers are legally required to have car insurance to be on UK roads as it provides financial protection if you’re involved in an accident. It can cover against injuries that other people involved sustain as well as damage to property. Car insurance can also offer financial protection if your car is vandalised, stolen or damaged by fire.

What levels of car insurance are available?

The minimum level of cover for all drivers in the UK is third party car insurance.

  • 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 it will also provide protection against any fire damage to your car or the theft of your car.
  • Comprehensive. This gives the same protection as the lower levels as well as protecting your vehicle against accidental damage and vandalism. It might be cheaper than third party or third party fire and theft, so always check.

What other types of car insurance are available?

  • Telematics car insurance. Having a “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. Your insurance provider will assess this data to calculate your premiums, based on your driving habits. However, be careful as black box technology monitors how well or how badly you drive. If you have been driving poorly, your premiums could go up.
  • Temporary 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.
  • Pay-as-you-go insurance. Your car could be fitted with a black box device, which specifically tracks how many miles you drive. You’ll then pay based on how much you use the car or “pay-as-you-drive”.

How to save on your first car insurance policy

  • 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. This is because of the risk profile of many people who typically get TP.
  • Increase security. If your car is not currently fitted with an alarm, think about adding one to reduce your premium.
  • Have a secure location to park your car. Cars kept in a garage or on a secure driveway are usually cheaper to insure.
  • 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.
  • Increase 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.
  • Add experienced drivers. Adding an older and more experienced driver to your policy could help to lower the premium.
  • Limit optional extras if you don’t need them. Think carefully about which optional extras you really want as adding extra protection to your policy will generally push the price up too.
  • Advanced driving skills. You could be in line for a discount with certain providers by taking an advanced driving course such as those offered by the Pass Plus scheme.
  • 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.
  • Pick a smaller car. Choosing to drive a small, safer car is likely to lower your premium.
  • Limit modifications. Any modification 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.
  • 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.

Which cars are the cheapest to insure?

Among the ways to lower your car insurance rate is to pick a car that is less expensive to cover. There are many factors that car insurance providers consider – the biggest one being the kind of car you drive. Insurers use a group rating system of 1-50 when assessing how much a car will cost to insure. The lower the rating, the cheaper that car is to insure.

These cars fall into category 1 and 2 in the group rating system.

  • Ford KA+
  • Nissan Micra
  • smart forfour
  • Kia Rio
  • Volkswagen up!
  • Volkswagen Polo
  • SEAT Ibiza
  • Hyundai i10
  • Vauxhall Corsa
  • Ford Fiesta
  • Fiat Panda
  • Skoda Citigo

Frequently asked questions


*Based on independent online research by Consumer Intelligence (March ’20). 51% of car insurance customers could save £285.88.
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