Car insurance for your first car

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.

• What's in this guide?

  What's in this guide?

  1. Why do I need car insurance?
  2. What levels of car insurance are available?
  3. What other types of car insurance are available?
  4. How to save on your first car insurance policy
  5. Which cars are the cheapest to insure?
  6. Frequently asked questions

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.

Frequently asked questions

• How do I register my new car?

  Depending on whether you’ve bought a brand new or used car, you’ll need to complete a form and send this to the DVLA (the Driver and Vehicle Licensing Agency).

  • For a new car, you’ll need to complete the v55/4 form.
  • For a used car, you’ll need to complete the V55/5 form.

  You’ll also need to have up-to-date vehicle tax and a current MOT certificate, which is an annual safety check performed on vehicles.

• Can I drive without car insurance?

  No. By law, you’ll need at least third party car insurance to be on UK roads. Ignoring this could lead to you being charged with an offence.

• Is it harder to get insurance as a new driver?

  No, not necessarily as you’ll have plenty of options. While some car insurance providers may have higher premiums for new drivers, other providers may actually design car insurance specifically for new drivers, such as a telematics policy, which could help to lower premiums over time if you drive safely. It’s always worth shopping around.

• Should I find a specialist insurer?

  While it’s not necessary to look for car insurance through a specialist provider, some may offer you important cover benefits as standard that other providers only offer as optional extras. Specialist providers also tend to have more knowledge and experience with a particular group, so there’s no harm doing some research.

• Does age affect car insurance premiums?

  Yes, but age is not the only factor taken into consideration when calculating your insurance premium. The make and model of your car, your location and your annual mileage as well as other factors are all assessed. Young drivers are generally considered the most at risk on the road, so they’ll face higher premiums as a result. Even though new drivers may have little experience, not all will be bad drivers. Opting for a telematics policy if you’re a safe and careful driver could actually save you money.

• Should I look for the cheapest car insurance?

  No, not always. The cheapest car insurance policy may not offer you the best cover. Shop around and remember to compare the benefits, features and conditions of each policy rather than looking at the price alone. By understanding what the policy offers in relation to what you require, you could end up saving money.

• How can I pay for my car insurance?

  You’ll usually have the option of paying for your car insurance policy either in one go or in monthly instalments. In can be a tall order paying up front and you may wish to spread the cost out. However, keep in mind that you’re likely to pay more for paying monthly as interest will be added.

• What is black box car insurance?

  Black box car insurance is where your premium is calculated based on your driving habits. A black box device is fitted into your car to measure speed, distance, braking etc. This data is reviewed by your insurance provider to calculate your premiums, based on how safely you drive. This type of insurance could save money for safe and careful drivers. However, it also monitors poor driving, which could mean your premiums actually increase.

• What is car insurance excess?

  Your insurance excess is the amount of money you have agreed to pay towards a claim. Your insurer won’t pay out for a claim that costs less than your excess.

  A voluntary excess is normally an amount set by you when taking out a policy. You’ll have the option of adding or increasing a voluntary excess, which could in turn reduce your premium.

  A compulsory excess amount might vary depending on the age of your car and your driving experience. You’ll find details about any compulsory or voluntary excesses in your policy document.

• Is car insurance more expensive for newer cars?

  Not necessarily. The car insurance premium you pay will depend on which category your car falls into, as assessed by your insurance provider. Insurers use a 1-50 group rating system when assessing how much a car will cost to insure. Several factors are considered including the car’s performance, security and value among others to decide its rating. The lower the rating, the cheaper that car is to insure.

• What is a no claims bonus?

  If you haven’t made a claim on your car insurance, a no claims bonus or discount is applied to your new premium. Over time, it may be possible to build up a no claims bonus over several years, but it’s always worth shopping around when your car cover is up for renewal to ensure you’re getting the best deal available.

• How do I make a claim if I've had an accident?

  If you have an accident, you’ll need to contact your insurance provider. The contact details will usually be available on your car insurance policy document along with the process.

• How do I renew my policy?

  You should be notified when your policy is up for renewal, but don’t just opt to renew. Do your research and shop around to see if you can get the same cover benefits or more for less elsewhere. If you can, go back to your current insurer to negotiate a better deal.