As a young or new driver, finding affordable car insurance can be difficult, especially right now in the UK. Average insurance prices have reached eye-watering levels, with some annual policies for new drivers costing well over £2,000.
So, before you start searching for an insurance policy, it's important to know about the things that affect your costs.
Keep reading to learn more about the average costs for new drivers, the factors that influence those costs, plus a few practical tips to help you pay less for your policy.
The average cost of young drivers' insurance
The average cost of car insurance for new drivers in the UK ranges between £1,500 and £2,000 a year. The figures vary depending on things like your age, driving experience, location, and your vehicle. Source:NimbleFinns.
The youngest drivers — those aged 17 or 18 — tend to pay the highest prices. The average cost of a car insurance policy for a 17 year old in the UK is now £2,877. Source: The Guardian.
Car insurance for young drivers is more expensive due to their lack of experience on the road, and also because they’re statistically more likely to be involved in an accident. So, insurers charge higher premiums to cover this increased risk, at least until young drivers gain a few years’ experience and a safe driving record.
Things that affect young driver insurance costs
Age and driving experience
Age is one of the most significant factors affecting car insurance costs for young drivers.
Statistically, drivers under the age of 25 are more likely to be involved in accidents due to their lack of experience behind the wheel. Insurance companies have to cover this higher risk with higher insurance premiums.
As you gain more driving experience and build a clean driving record, you can expect your insurance costs to go down over time.
Location and postcode
Where you live plays another important role in determining your insurance costs. Large urban areas — including London, Manchester and Birmingham — typically have higher insurance costs compared to rural regions. This is due to the increased likelihood of accidents, theft and vandalism in densely populated cities.
Even within the same city, insurance prices can vary significantly from one postcode to another, depending on crime rates and claim statistics in each area.
Vehicle type and insurance group
The make, model and specifications of your car have a large impact on your insurance premiums. Vehicles are categorised into insurance groups ranging from 1 to 50, with lower numbers indicating cheaper insurance costs.
Things like your car's value, repair costs, safety features and engine size affect the insurance grouping. Choosing a smaller, less expensive and less powerful vehicle in a lower insurance group can help you keep your insurance costs in check.
Level of coverage
The level of cover you choose for your car insurance also affects the overall cost. In the UK, there are three main types of car insurance:
- Third Party Only (TPO)
- Third Party, Fire and Theft (TPFT)
- Comprehensive
TPO is the minimum legal requirement and provides coverage for injury and damage to other people's property. TPFT includes TPO coverage along with protection against fire damage and theft of your vehicle. And, you guessed it, Comprehensive offers the highest level of cover, including damage to your own car.
While comprehensive insurance is typically more expensive, it provides greater peace of mind and can be more cost-effective in the long run, especially for young drivers with higher risk profiles.
Excess amount
The excess is the amount you agree to pay towards any claim you make on your insurance policy. Choosing a higher voluntary excess can lead to lower premiums, as it shows insurers that you’re willing to cover a larger portion of the costs in the event of a claim. However, it's important to select an excess amount that you can realistically afford, as you'll need to pay this sum upfront when making a claim.
Additional drivers and named drivers
Adding an experienced named driver to your policy, such as a parent or older sibling, can help lower your premiums. Insurance companies view the addition of an experienced driver as a risk-mitigating factor, assuming that the named driver will spend some time behind the wheel and provide guidance to the young driver.
However, it's essential to be honest about the main driver of the vehicle, as fronting (falsely claiming that an experienced driver is the main user) is illegal and can lead to penalties or your insurance not being valid.
Driving history and no claims bonus
Your driving history and no claims bonus (NCB) significantly influence your insurance costs. A clean driving record without any accidents, claims or points on your licence will usually result in lower insurance costs over time.
Similarly, building a no claims bonus by driving safely and avoiding a claim can lead to substantial discounts over time. For every year of claim-free driving, you can accrue a year's worth of NCB, with some insurers offering big discounts for five or more years of claim-free driving.
Ways to reduce young drivers' insurance costs
Choose a car in a low insurance group
Selecting a car in a lower insurance group is an effective way to reduce your costs. Smaller, less powerful vehicles with good safety ratings and low repair costs are typically classified in lower insurance groups. Some examples of cars that are cheaper to insure include the Volkswagen Polo, Ford Fiesta and Vauxhall Corsa.
Before buying a car, always try to research its insurance group to gauge the potential impact on your premiums.
Increase your voluntary excess
Opting for a higher voluntary excess can also help lower your insurance costs. By agreeing to pay a larger sum towards any claim, you show your insurer that you’re less likely to make a claim. However, it's crucial to choose an excess amount that you can comfortably afford in the event of an accident, as you'll need to pay this amount upfront when making a claim.
Consider telematics or black box insurance
Telematics (also known as black box) insurance policies use a device to track and measure your driving behaviour, including things like speeding, braking and acceleration. By showing that you’re a safe and responsible driver, you can earn discounts on your insurance.
This type of insurance is particularly good for young drivers. It allows you to prove that you’re a safe driver, so you can get better prices much sooner than you would with a no claims bonus.
Pay annually instead of monthly
While paying for your insurance monthly may seem more manageable, it often results in higher costs over the course of a year. If you can afford to pay your car insurance in one lump sum, you could save a significant amount of money over the long run. Some insurers even offer discounts for annual payments, making it an even more attractive option.
Maintain a clean driving record
Keeping your driving record clean usually helps to keep your insurance costs low. Accidents, claims and driving offences can all significantly increase your renewal costs. So try to avoid these by driving as carefully as you can. Also, by avoiding claims and building up a no claims bonus, you can earn even bigger discounts on your premiums over time.
Take an advanced driving course
Completing an advanced driving course, such as the Pass Plus or IAM RoadSmart, can show your insurer that you’re committed to safe driving, helping to potentially lower your insurance premiums. Some insurers offer discounts for drivers who have completed these courses, recognising the additional skills and knowledge gained. However, it's important to weigh the cost of the course against the potential savings on your insurance to determine if it's a worthwhile investment.
Shop around and compare quotes
One of the best ways to find affordable young drivers' insurance is to check and compare quotes from a few insurers. Each insurance company uses its own criteria to assess risk and calculate your premiums, so prices can vary significantly between providers. Use comparison websites to get a broad overview of the market, but also consider contacting insurers directly for personalised quotes. Don't automatically opt for the cheapest policy — instead, look for a balance between price and the level of coverage you need.
Explore additional discounts
Insurers often give various discounts to help lower your costs. Some common discounts include:
- Multi-car discount: If your family insures multiple cars with the same provider, you may be eligible for a discount.
- Student discount: Some insurers offer discounts for students who achieve good grades or attend college away from home.
- Low mileage discount: If you drive fewer miles than the average driver, you may qualify for a low mileage discount.
- Loyalty discount: Staying with the same insurer for multiple years can sometimes result in loyalty discounts.
Be sure to ask your insurer about any available discounts and see if you qualify.
Summary
Insurance for new and young drivers can be very expensive. However, by understanding the things that affect your costs, and following a few tips to reduce them, it is possible to find more affordable cover.
Remember to choose a car in a low insurance group, consider telematics insurance, maintain a clean driving record, and shop around for the best deals. As you gain experience and build up your no claims bonus, you can look forward to more manageable insurance costs in the future.
Frequently asked questions
At what age does car insurance become cheaper for young drivers?
Car insurance costs typically start to decrease once driver's reach the age of 25, especially if they’ve kept a clean driving record. However, the most significant reductions come with more years of on-road driving experience and a healthy no claims bonus.
Can I drive my parents' car if I'm not insured?
No, it’s illegal to drive a car without valid insurance. If you want to drive your parents' car, you’ll have to be added to their insurance policy as a named driver, or you can take out a separate policy for yourself.
What is fronting, and why is it illegal?
Fronting is basically claiming that an experienced driver, such as a parent, is the main driver of a vehicle when, actually, the main driver is a young or high-risk driver. This is usually done to try and pay lower insurance costs. Fronting is illegal because it misrepresents the risk associated with the policy, and it can lead to policy cancellations, legal charges, and difficulty buying insurance in the future.
How can I build up my no claims bonus?
You can build up your no claims bonus (also known as no claims discount) by driving safely and avoiding any claims on your insurance policy. For each year of claim-free driving, you accrue one year of no claims bonus.
The longer you go without making a claim, the higher your bonus will be, which means potentially bigger discounts on your insurance each year.
Is it better to pay car insurance annually or monthly?
Paying your car insurance upfront for the year is often more cost-effective than paying monthly. When you pay monthly, insurers typically charge interest on top of your premiums, resulting in higher overall costs. If you can afford to pay your premiums in one lump sum, you can save money in the long run and may even qualify for additional discounts.
Find out more about paying for insurance monthly vs annually.
