There are few rites of passage as exhilarating as passing your driving test. The shackles of public transport, or worse yet getting a lift off mum and dad, are cast off and the world is yours to explore.
Of course, things like insurance don't seem that big a deal, but young drivers' car insurance can end up costing more than your first car. And even if you passed your test a few years ago and have been accident free, the cost of insurance can still be high for the under-25s.
It seems unfair, but the reality is, the expense is grounded in sound statistical research.
The young and the reckless
It may sound condescending, but there is a lot of evidence that younger people take more risks than older people. According to research by the Transport Research Laboratory teenage drivers account for just 1.5% of motorists in the UK, but 12% of all accidents.
Younger drivers are more likely to take risks when driving because of their lack of experience, and they are also less likely to spot potential hazards. It all adds up to more expensive premiums. Other factors that affect young drivers' car insurance costs include:
- Your car. There are many elements about your car that will be taken into consideration when calculating your premium: its age, value, engine size, and the time and cost that repairs to the model typically cost. New, powerful cars will tend to be more expensive.
- Who you are. We've already seen that being young results in young drivers' insurance being higher, but where you live, your occupation and whether you have any no-claim discount also play a part.
- The cover you want. Car insurance comes in three flavours: comprehensive, third-party, or third-party fire and theft. Higher risk drivers often opt for third-party cover, resulting in more claims against this type of policy, which can make third-party cover more expensive. So check each option, and also keep in mind whether the more limited cover of a third party policy is appropriate for you.
- Your excess. When you take out your car insurance you will be asked to choose your excess. This is the amount of money you have to pay before the insurance company picks up the bill. The more excess you're willing to pay the cheaper your premium will be. But remember to only choose an excess you can realistically afford.
Driving down costs
What can you do to bring down the cost of your car insurance if you're a young driver?
"Telematics lets you see how well you're driving based on hard facts"
Personalise your policy with telematics
Like all car insurance, the cost of young drivers' insurance is based on generalised data and statistics. However, you can get a more personalised premium if you opt for telematics insurance, commonly known as 'black box insurance'.
It's a simple enough proposition:
- Your insurer gives you a plug-in that attaches to your car.
- This provides real-time data on how you drive, including things like acceleration, braking and cornering.
- If you drive responsibly you save when it's time to renew your policy.
Telematics lets you see how well you're driving based on hard facts, so you can see if you really are a safe driver and if not make the necessary changes.
Insurance costs for students will typically be high because they tend to be younger drivers. So, for the reasons above their premiums will be higher than older drivers.
Coupled to this is the fact that universities are located in cities (where crime rates are higher compared to small towns and rural areas), which means insurance claims are statistically higher. Areas that students live in often have higher crime rates than surrounding areas too. This puts their cars at increased risk of theft and vandalism.
For students, the best way to get lower insurance premiums is to make sure their cars are secured with anti-theft devices, and consider telematics insurance to prove that they are safe drivers. Then as you continue to prove that you're a responsible driver you should see the benefits as your no-claim discount racks up and your insurance premiums come down.