>04
Oct
If you’ve just passed your test, you’ll likely be keen to get on the road and get driving. But you’ll first have to sort out your car insurance, as it’s a legal requirement for all drivers to be covered at some level.
Car insurance can be confusing and costly – but in this guide, we explain everything you need to know about car insurance for new drivers. We’ll explain what affects the cost of your insurance, why insurance is so expensive for new drivers, what the different levels of insurance mean, and how you can reduce your costs. We’ll also explain how you can find car finance for new drivers so you can purchase your first car and get on the road.
What affects the cost of car insurance for new drivers?
How much you pay for your car insurance is called a premium. Car insurance providers analyse a range of factors to work out your premium. This includes:
- Your age
- Where you live
- Your job
- Your car
- Your estimated annual mileage
- The level of cover you need
- If you’ve made any car insurance claims previously
- If you have any criminal convictions
All these factors and more will be used to assess how “risky” you are as a driver – that is, how likely the provider thinks it is you will need to make a claim on your insurance. The more likely they think it is that you’ll make a claim, the more expensive your premium will be.
Why is car insurance so expensive for new drivers?
Car insurance is typically more expensive for new drivers than for more experienced ones. According to Go Compare, new drivers aged between 17 and 21 will pay between £1,000 and £850 on average for their car insurance. In contrast, the average cost of car insurance for all drivers is around £450.
The reason car insurance costs more for new drivers is due to their lack of experience. New drivers are statistically more likely to have an accident, and so they’re seen as high risk by insurance providers.
New drivers will also not have had a chance to build up a No Claims Bonus. A No Claims Bonus or No Claims Discount is where a driver gets a discount on their car insurance if they have one or more consecutive years where they haven’t made a claim on their car insurance.
This discount increases every year that the driver hasn’t made a claim, usually capping at around nine years. It can range from around a 30% discount for having one year without a claim, to a 60% discount for five years with no claims made. New Claims Discounts only apply to the main car insurance policy holder, and new drivers typically haven’t had a chance to build this up yet, so they can’t benefit from the reduction.
What do the different levels of car insurance cover mean?
There are three main levels of car insurance cover that most providers will offer. These are:
- Third party – This is the minimum level of cover that you are legally required to have in the UK. It will cover you if you cause damage to other cars or injuries to other people, but not for any damage that happens to your own car. This you’ll have to pay for yourself.
- Third party, fire and theft – This level covers you for damage and injuries you cause to others, and also covers you if your car is stolen or damaged by fire. Some might also include cover if someone attempts to steal your car and damages it in the process. If you have an accident, you will still have to pay for repairs to your own car.
- Comprehensive – Comprehensive cover is the highest level of car insurance. It covers you for all of the above, as well as any damage to your own car in an accident.
You can pick the level of cover that you think you need, although comprehensive cover is usually the advised option. Often, third party insurance can be more expensive than comprehensive – this is because insurance providers found that people who chose third party only were making more claims, and so this group were deemed higher risk.
Comprehensive cover will also give you peace of mind that you’ll be fully covered and won’t have to pay out potentially high costs if your car is damaged in an accident that you cause.
How can new drivers get cheaper car insurance?
There are a few ways new drivers can reduce their premium and get cheaper car insurance.
Add a second named driver who has driving experience
Adding a more experienced driver to your car insurance policy, such as a parent or partner, can help to reduce your premium cost. The second driver should have a good driving record, with no convictions in order to help reduce the price. As this person is deemed as less risk, you could find your premium lowers.
You should remember that you will still have to be the main policy holder on your insurance. It’s illegal to put someone else as the main driver if you will be driving the car most of the time.
Choose to pay a higher excess
When getting your car insurance, you’ll be asked how much excess you want to pay. The voluntary excess will be an up-front cost that you’ll pay if you have to make a claim. If you choose to pay a higher voluntary excess, the insurance company won’t have to pay out as much, so they’ll see it as less risk and lower your premium.
You should calculate how much voluntary excess you could reasonably pay out if you have to make a claim, so you’ll know you’ll be able to afford it if you need to.
Pay annually
You will have the choice to pay your car insurance monthly or annually. Paying annually can often be cheaper, insurance providers typically add interest if you pay monthly. If you have the money available to pay in one lump sum, you will likely end up saving money over the year.
Choose to have a black box fitted
A black box, also known as a telematics policy, can be a good option for new drivers. With this, a black box will be fitted into your car, and it will monitor how safely you’re driving. It looks at things such as your speed and if you stick to the speed limit, if you brake in good time, and if you accelerate gently. Sometimes you might be penalised if you drive late at night. Another benefit of a black box is that they are fitted with a tracking device, which can help to locate your car if it is stolen.
If you think you are a safe driver, a black box can help to reduce your premium. However, you should bear in mind that with a black box, you could also find that your premium goes up if you are deemed to be driving unsafely, at the wrong time of day, or on the wrong roads too much.
Accurately estimate your mileage
You should take the time to accurately estimate your annual mileage. The more you will be driving, the higher a risk you’ll be, so the higher your premium will be. Whilst you shouldn’t lie on your car insurance application, as this can invalidate the policy, you should try to accurately calculate your annual mileage so you’re not overestimating too much.
Increase your security
There are a number of things you can do to increase the security around your car. The more secure your car is, the less likely it will be stolen, and so the less risk of you having to make a claim to your insurance provider. This means you can get a lower premium.
You can look at things like getting an electronic alarm, immobiliser, wheel locks, and vehicle tracking for your car. You should also try to ensure it’s parked in the safest place overnight, ideally in a locked garage or on a driveway rather than on the street.
Choose the right car
The make and model of your car will affect your insurance premium. If you choose to drive an expensive car that has a big engine, for example, you’ll likely end up paying much more than choosing a cheaper car with a smaller engine. This is because there is a higher risk of having an accident when you have more power and speed, plus the costs of repairs will be higher. There is also more risk of expensive cars being stolen.
Cars are split into 50 car insurance groups. Cars in Group 1 will be the cheapest to insurance, whereas cars in Group 41-50 will be the most expensive. These will include high-performance vehicles and luxury, prestigious makes. If you are considering buying a specific make and model, you can check which insurance group it’s in on the Compare The Market website.
GetCarFinanceHere can help you find cheap car finance when you’re just getting on the road. We’ll find you the best car finance deals, whether you’re a new driver at 18 or 48. We have a huge range of brands available, so you can find your perfect first car. You can apply for car finance online today or contact us for more information.