Steep car insurance premiums for young drivers in the UK mean a quarter of their overall budgets could go to car insurance alone. So we were surprised to find that the most recent data has the median price for a 19-year-old driver with a telematics policy at just £864 per year. Yet even as drivers get older, their car insurance premiums can drop significantly — especially when they learn to follow these wise tips. For instance, at age 23, the difference between telematics and non-telematics policies narrows to just £21: £636 for telematics and £657 without.
This article provides useful tips for new drivers. These benefits will empower them to take control of the confusing car insurance landscape and save money. With prudent decisions and the use of a few key strategies, young drivers can save a lot of money on an auto insurance policy.
Understanding the Impact of Telematics Policies
Telematics policies have become a trending telematics use case among cost-conscious young drivers seeking discounted premiums. These usage-based insurance policies use devices to track driving behavior in order to determine rates based on individual driver performance. The average premium for a telematics 19-year-old driver is £864. This serves to illuminate the potential for cost savings relative to conventional insurance offerings.
Experts caution that when it comes to these new policies, safe driving is more important than ever.
“If you don’t drive carefully, or within pre-arranged limits of your policy, you could end up paying more,” – Tom Banks.
Young drivers can reduce their premiums a further 70% by improving their driving record. Safe driving habits can help them receive rewards, such as lower premiums or cashback upon renewing their policies.
As these teens age into their twenties, the difference between telematics and traditional policies becomes much smaller. By age 23, the expenses start to balance out. Maintaining a clean driving record can earn you hundreds, if not thousands over the life of the policy.
Choosing the Right Vehicle Matters
One crucial factor that goes into how much a young driver will pay for insurance is the type of vehicle they choose to drive. Some models are much more affordable to insure, as they fall into lower insurance groupings. For younger drivers aged 17-25, the up! by Volkswagen is the best choice, costing an average of £576. Other budget options are the Suzuki Alto at £597 and the Fiat 500 at £604.
Apart from model choice, buying used can save money even more dramatically. These cars typically have lower up front purchase prices and tend to result in lower insurance costs. On top of that, cars with smaller engines and fewer customizations are generally cheaper to insure.
Insurers don’t like vehicles parked on the street, instead of a driveway.
“Make sure you can afford to pay the excess amount you have stated,” – Lee.
Drivers with access to a private driveway are able to receive a more favorable rate. Insurers like driveways because they are a safer parking option.
Smart Strategies for Reducing Premiums
There are a number of ways young drivers can save money on insurance without compromising their safety. One of the most effective, though, is adding an underage driver as a named driver on their parent’s or guardian’s policy. This practice sometimes results in a lower premium because insurers like experience and a clean driving record.
Moreover, what one chooses to publicly announce as their profession can have a drastic impact on insurance premiums. In addition, some titles can command a higher premium simply because they are seen as more risky based on the professions’ assumed risk exposure. Thus, young drivers need to be aware of how the particulars of their job descriptions can affect pricing.
Another great way for young motorists to find a cheaper deal is by using comparison sites. By considering different quotes from different providers, they can save hundreds of pounds. Industry professionals advise getting quotes at least three to four weeks prior to a new policy starting, if not more, to get the most savings.
“The most common excess chosen by our customers is £250,” – Rhydian Jones.
Don’t add things to your vehicle or change their placement. Even simple modifications such as installing an aftermarket exhaust system or a custom paint job may raise your insurance premiums.
The Long-Term Benefits of Safe Driving
By instilling safe driving habits, we keep young drivers safe out there. Besides saving lives, it’s a doggone good long-term fiscal policy, too. It’s not a one-time discount either, the car insurance rate relief continues to grow for every year a driver is accident-free. For example, after five years of not making a claim, some insurers will cut their premium by at least 60 percent.
Young drivers should remain mindful of the implications of monthly payment plans. While spreading out payments may seem convenient, it often involves paying interest on the premiums, sometimes as high as 30% APR, which can lead to higher overall costs.