Though not quite as extortionate as they once were, car insurance premiums for young people can still be prohibitively expensive. However, there are a number of ways you can keep costs down. In this article we’ll take a look at the steps you can take to ensure you’re not paying more than you need to.
All insurance pricing is based on the perception of risk. Unfortunately, young drivers are seen as a high risk group. Whilst you may drive with all due diligence, unfortunately, many of your peers will wind up in traffic accidents as a result of their inexperience.
To avoid being lumped in with this high risk pool, you should demonstrate to insurers that you are far less likely to actually require their services. One way of showing your high level of competence behind the wheel is to take the Pass Plus course. This is an optional course which builds on the skills you learn in the process of gaining your driver’s license, and is a widely accepted among insurers as cause for a discounted rate.
Of course, no matter how well you drive, whenever you’re on the road there’s a chance you’ll have the misfortune to cross paths with a driver much less careful than yourself. As a result, one of the best ways to bring down your premiums is to spend less time on the road. Put simply, the less you drive, the less you pay.
It also needs to be remembered that your vehicle isn’t the only thing at risk when you’re out driving. The possibility of theft or damage from vandalism will also drive up the price of your insurance. As a result, where you keep your vehicle, assuming it’s a safe place, can help you save. For instance, if your car is kept in a garage or driveway you can expect to pay 3%-7% less than if it’s out on the street. Having a security device fitted can also drive down your bills.
Finally, consider the fact that the vehicle itself will, in the eyes of the insurer at least, reflect on you. If you’re driving a suped-up Vauxhall Nova that screams ‘boy racer’ or an SUV with a huge engine, you’re going to have to pay more than if you’re driving a modest second hand motor.
Think About the Excess
One of the paradoxes of car insurance is that, despite the large sums people pay for the privilege of their coverage, when they do have a scrape, a lot of the time their priority is to try and maintain their no-claims bonus and keep their future premiums down. As a result, it’s not unusual for folks to fork over fairly hefty sums for repairs out of their own pocket, leaving their insurers none the wiser as to the mishap.
On the one hand, having to pay for insurance but being scared to actually use it is an annoying state of affairs, however, if you know that you’re unlikely to claim unless you have no other way of staying on the road, you have less to fear from having a high excess (the portion you have to pay when making a claim). This is to your advantage in that, the higher you set your excess, the lower your premiums will be.
Make Use of New Legislation
If you’re a man and you’ve already got a policy, you could be paying too much. A recent EU ruling now makes it illegal for insurers to discriminate according to sex. (In the past men were seen as being more reckless and were therefore expected to pay substantially more.) Get a quote elsewhere and see what you could save. As long as you haven’t claimed on your current policy you should get a pro-rata refund when cancelling, though you might have to pay an exit fee.
Consider a Specialist Policy
To tackle the problem of unaffordable premiums, some insurers have come up with innovative new pricing structures. With a pay as you drive policy, for example, a monitor is placed in your car which records how far you drive and at what times of day (accidents more frequently occur during rush hour). Just as with a PAYG phone, you’ll be only charged for the time you actually spend driving.
There are also insurance policies that use monitors to analyse how well you drive. They’ll record your speed, how well you anticipate traffic and other factors. Whenever you hit the road you’ll be scored on how well you drove and your premium will track these scores. Of course, this can just as easily be a minus as a plus point, as it means even if you never have an accident, if the software deems that your driving isn’t up to scratch, you’ll have to pay more. Indeed, if you drive in a manner judged to be extremely dangerous your policy can be cancelled. As it’s illegal to drive without insurance this effectively means you’ll be taken of the road until you obtain a new policy.
Finally, remember to check out insurers who have specific policies for students and young drivers.
There are now a number of insurers who offer multi-car policies to those living at the same address. So if you are still living with your parents, see if they would be willing to insure all the cars together under one policy – this can substantially reduce the bill compared to insuring each car separately and their no-claims discounts are still protected even if you have an accident.