Drivers aged between 17 and 25 are forced to pay more than twice the national average for their car insurance, research from price comparison site uSwitch has found.
While the average premium for all motorists is £459, younger drivers pay a hefty £989, meaning they spend a total of £940 million more for their cover.
The disparity means that, even though under-25s make up less than 7% of the total car insurance market, they pay an astonishing 22% of the total premiums.
Paying for the risk
But before young drivers start complaining about unfair treatment, it’s worth remembering that these sky high premiums are not without justification.
Consider the following: Despite constituting less than a 10th of the market, young drivers account for 16% of motoring offences, while under-21s are responsible for 34% of dangerous driving offences. Furthermore, young male drivers are statistically ten times more likely to be involved in a motoring accident, according to uSwitch.
That said, safe drivers should not be punished for other people’s mistakes, so here are a few tips to reduce the cost of your premiums.
How to get a better value deal
Choose your car carefully: The car you drive will have a dramatic impact on your insurance premiums. And it’s not just the value of your car that determines your cover costs, but various other factors like performance, engine size, and so on.
For example, an 18-year old looking to insure a 2003 Golf GTI 180T that is worth £4,795 would have to pay a whopping £5,726 for a comprehensive policy at Endsleigh. However, had he purchased a 2003 Mini Cooper S, value £8,994, the same policy at Endsleigh would cost £5,430.
So even though the second car is worth twice as much, it still nearly £400 cheaper to cover than the first, at the same insurer. Take the time to gather a number of quotes for each of the various car models you are considering buying to get an idea of what you’ll have to pay for insurance.
With the average young driver’s premium costing 69% of the value of their car (according to uSwitch), it should be a central factor in deciding which car you go for.
Keep it standard: Regardless of the car you choose, avoid modifying it in any way. If a car is no longer a “standard model”, then insurers will hike premiums notably.
Shop online: Insurers offer hefty discounts of up to 20% when you buy your cover online. For young drivers this can translate into hundreds of pounds of savings for absolutely no extra effort.
Just make sure you fill out your application form carefully, as small errors can be costly to fix. For example, many insurers charge an ‘amendment fee’ of up to £25 just to correct a spelling mistake in your name or address on the policy.
Shop around: As with any insurance, the only way to make sure you get a competitive premium is to compare prices. So shop around for quotes – it doesn’t take much time or effort online, but the savings could be massive.
Pay up front: When you buy insurance, you will be given the choice between paying for the year’s cover up front, or by monthly instalments.
While the latter may be tempting - especially when you consider the size of young drivers’ premiums – but it’s also far more expensive, as most insurers will charge you an obscene rate of interest on the outstanding debt (often above 20%).
If you can’t afford to pay it off in full immediately, you can always pay for the policy with a credit card that charges no interest on new purchases, such as the HSBC credit card, and pay it off over a year.
Drive carefully: It’s stating the blindingly obvious, but the rewards are so great it’s worth mentioning that drivers who don’t claim can save loads of money.
In fact, uSwitch research shows that young motorists with a no claims history can cut their premiums by more than 90%, as the table below shows.
| Age | No claims bonus | Cost | Saving (year on year £) | Saving (year on year %) |
| 17 | 0 | £2,312 | | |
| 18 | 1 | £1,134 | £1,177 | 51% |
| 19 | 2 | £705 | £429 | 38% |
| 20 | 3 | £487 | £218 | 31% |
| 21 | 4 | £375 | £111 | 23% |
| 22 | 5 | £319 | £56 | 15% |
| 23 | 6 | £287 | £32 | 10% |
| 24 | 7 | £238 | £48 | 17% |
| 25 | 8 | £222 | £16 | 7% |
Source: uSwitch.com correct as of 25th June 2008Show no loyalty: Now that you’ve managed to locate a competitive policy, it’s important you remember the golden rule of insurance: Never simply renew. Just because your current policy is a great deal, don’t assume the renewal quote you get from your insurer is going to be equally competitive.
Insurers are famous for reserving their cheapest quotes for new customers, whilst bulking up on those already ‘in the net’. So when your policy is about to expire, take the time and do it all over again.
