How to save money on your car insurance as a young driver

A young female driver

July 16, 2021

Car insurance can be a big expense for new or younger drivers. In fact, according to Compare the Market, the average car insurance price for drivers aged between 17 and 24 is a whopping £1,154!

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Why is insurance so expensive for younger drivers?

Put simply, it is because new drivers are statistically more likely to have an accident and may need to make an insurance claim compared to older or more experienced motorists. The RAC has reported that:

  • Nearly 40% of drivers in the UK have been involved in a crash by the time they reach 23
  • 23% of drivers aged between 18 and 24 have had a collision while driving within 6 months of passing their test

This may be because of a number of factors, but it can predominantly be put down to having less driving experience on the road.

While it is unlikely that insurance for young drivers will become cheaper anytime soon, there are some easy ways to save money on your car insurance if you’re a new driver.

In this guide, we've listed some of the simpler ways of doing this that are likely to help bring your premiums down. Of course, it is largely dependent on the insurance provider you choose and your individual situation (driving history, claims, age, location, type of vehicle, etc.).

What car insurance do young drivers need?

Before we get into how you can save money on your car insurance, it’s worth going through what types of insurance you actually need as a young driver. In the UK, it’s against the law to drive without the right type of insurance, so it’s really important that you get the right cover for your needs.

Third Party Only

This is the most basic type of car insurance and the minimum type of insurance required by UK law.

Third-party only insurance covers the cost of any damage caused to other drivers' vehicles in the event of a car accident. It does not cover the policyholder if they were injured and/or their car was damaged in the accident, and they're not covered if their car is stolen or damaged by fire.

Read more: What does third-party insurance cover?

Third Party Fire and Theft

This offers a bit more protection than Third Party Only cover, covering you in the event that your car is fire damaged or stolen.

If you cause damage to another person’s vehicle and/or cause them to sustain an injury, this policy would cover the cost of this, but it will not pay out to cover any damage done to you or your own vehicle.

Fully Comprehensive

Fully comprehensive cover is the highest and most extensive level of car insurance, giving drivers full protection if their vehicle is damaged or they sustain injuries, another vehicle is damaged or your car is stolen or damaged by fire.

Additional extras can be added to this type of policy, too. For example, a fully comprehensive insurance policy might insure you if you drive another car or drive abroad. Not every fully comprehensive policy is exactly the same though, so it is worth finding out what your chosen policy offers and knowing what it does and doesn’t cover you for.

At Bobatoo, we always highly recommend getting fully comprehensive car insurance for peace of mind and full coverage. It's worth bearing in mind that, despite being the highest level of cover, fully comp insurance is often the cheapest type of cover.

Read more: Is comprehensive car insurance cheaper than third party?

How to save money on your car insurance as a young driver - 8 ways

There are a number of things you can do to reduce the cost of your car insurance premium when you first start driving. It’s a good idea to consider some of these before you actually buy your first car:

1. Choose your car very carefully

The car insurance industry uses a Group Rating Table, which assigns different car models to different groups. Depending on what group your car is in, you are likely to pay either more or less on your insurance. The Group Rating Table ranges from 1-50, with 1 being the cheapest to insurance and 50 being the most expensive.

So if you want to get the cheapest policy and save on cover, we recommend getting a car that’s cheap to insure and comes with low premiums.

Read more: Car insurance groups explained and 10 of the cheapest cars to insure

3. Think before you modify

Car modifications can have a big impact on your car insurance premiums. Even additions like expensive alloy wheels can raise how much you pay because these may be more attractive to thieves, making a claim on your policy more likely.

On the other hand, some modifications can lower the cost of your insurance premium. For example, adding parking sensors or security devices to your car may lower how much you pay. If you're thinking of doing this, however, we recommend checking with your insurer first before you make any modifications to see how it may affect your insurance policy. Additionally, if you have already modified your car, be sure to tell your insurer. If you don’t, it may invalidate your car insurance policy and leave you without cover altogether!

Learn more: How do car modifications affect car insurance prices?

4. Build up your no claims bonus:

A No Claims Bonus, sometimes referred to as NCB or NCD, (No Claims Discount), basically refers to whether or not you have made any claims on your car insurance.

Many insurance companies offer a no claims bonus or discount to customers who have not had to claim in a certain period of time, usually 12 months. Having a No Claims Bonus is likely to reduce how much you pay on your premium in the long-run. Of course, this isn’t much help for young drivers who are buying insurance for the first time but it’s worth bearing in mind for when you renew your policy and remembering that making a claim on your policy will make your car insurance go up.

5. Think about getting a black box (telematics) policy

Black box (or Telematics) insurance has become very popular in recent years. Essentially, it’s a device (usually in the shape of a black box!) that is fitted to your car and monitors how you drive.

It works by using GPS technology, like your Sat Nav, and monitors your speed, time of driving and braking speed. When these devices are fitted, it can help to significantly reduce your premium as a young driver providing you drive sensibly. If you drive well, you are likely to reap the rewards.

It’s worth bearing in mind that the black box can work in the opposite way too. If the insurance company feels that you aren’t driving well, your premium may increase. In addition, Telematics insurance can have curfews attached as a policy condition, but many insurers have stopped doing this, so just be sure to check the exact terms with them. This means that you may not be allowed to drive between the hours of 11pm and 5am typically – so check that the policy terms are right for your lifestyle.

To learn about the benefits and drawbacks of a black box policy, read our guide for more information: The pros and cons of black box insurance.

5. Keep your car safe

This is perhaps the most difficult thing to change if you want to save money. Insurance companies often look at where you keep your car in the day and at night and may increase your premium if it looks like your car is at risk of being stolen or damaged.

While you’re unlikely to change where you live to save on car insurance, there are a few things you can do to reduce your premium. If you can, keep your car in a locked garage or private driveway and make sure that it is secure at night. Failing that, you could fit good quality alarm systems or immobilisers (from a provider recognised by your insurance company) to your car.

If you are thinking about taking your car to university, it’s worth checking what the area is like where your student accommodation is situated. If it is known to be unsafe, it may be better to leave your car at home. The greatest risk is having your car in public places for long periods of time.

6. Think about getting extra driving qualifications

You know the phrase that “you don’t really learn to drive until you’ve passed your test”? Many insurance companies recognise that new drivers may not have experienced driving in all situations yet. With this in mind, your premium may be reduced if you take recognised extra driving qualifications.

One of these is the Pass Plus Scheme, which is run by the DVLA. This qualification helps to improve your skills in areas like night driving, driving in hazardous conditions and on the motorway.

Read more: All you need to know about advanced driving courses

7. Become a named driver or add a more experienced driver to your policy

Another way in which you can lower your car insurance premiums is to add an older, more experienced driver with a no claims bonus to your policy as a named driver, such as a parent.

Due to them being a sensible driver with a clear driving history, this will help to bring your premiums down, and it also means they can use the car from time to time if they ever need to.

Alternatively, you could always be added to your parents’ car insurance policy as a named driver. This is likely to increase their policy’s premiums, but it could be a lot cheaper than getting a new young driver policy.

Important: You must make sure that the named driver does not drive the vehicle more than the main driver (the policyholder), otherwise you are committing car insurance fraud known as fronting, which comes with serious consequences. So if you want to drive a lot, you won’t be able to be a named driver on your mum’s or dad’s policy.

Read more: The implications of being a named driver

8. Pay more voluntary excess

When you get car insurance, every motorist must pay excess in the event of a claim on their policy. 

There are two types:

  • Compulsory excess: You must pay this set amount if you ever need to make a claim - it is set by the insurer and cannot be changed, so bear this in mind when comparing quotes.
  • Voluntary excess: You can choose to pay voluntary excess on top of the compulsory excess in the event of a claim, and the higher the amount you choose, the cheaper your policy will be. It is important, however, that you set it at an amount you would be able to afford to pay if you had an accident and needed to claim on your policy, on top of the compulsory excess. 

Read more: A complete guide to insurance excess

Compare prices and get a cheap quote today

It might seem unfair that younger drivers have to pay more on their premiums, but insurance companies set the premiums according to the level of risk that the driver poses to them. And, statistically, younger drivers are more likely to claim, which is the reason why car insurance can be so expensive.

By following the steps listed above, however, you could shave a good amount of money off your premiums. And don’t forget, the best way to get the cheapest price is to compare quotes online with different insurers - if you do this, make sure you’re getting the right policy for you and your situation, don’t just get cover based on a really cheap price.

You can get started with Bobatoo today (tap the button below) or find out more with our helpful guides below.

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