New drivers: Combating the higher costs of car insurance

If you are looking forward to passing your driving test in the next few months, you may have been a little miffed to hear that the theory test has just got harder. Instead of having to correctly answer 30 out of 35 questions on the Highway Code, you will now have to successfully score 43 out of 50, before you can move on to take the practical test. And even when you’ve overcome all the obstacles to receive your well deserved driving licence, you may be further frustrated to find you have to pay significantly more for your car insurance.

However, there are good reasons for both a thorough test and the higher insurance premiums. Most new drivers are not only inexperienced, but they are also young. According to research by road safety charity BRAKE, one in eight drivers on Britain’s roads are under the age of 25, but a quarter of drivers who die in traffic collisions are also in this age group. In addition, statistics from the Association of British Insurers (ABI) show that male drivers aged under 21 are ten times more likely to have a car accident than those aged 35 or over. This is twice the rate for female drivers of the same age, who are five times more likely to have an accident than women aged 35 or over. Even if you fall into an older age bracket, if you are a new driver, you are still likely to face higher insurance premiums because of your inexperience on the roads and your higher likelihood of making a claim.

But there are steps you can take to get cheaper car insurance, even in that first year of driving, when you’ve had no chance to yet build up your yearly no-claims bonus/discount. The extended driving test should put you in good stead, by providing you with the most comprehensive introduction possible to driving safely. But you can also add to that a ‘Pass Plus’ course. This is specifically designed for new drivers, who have just passed their driving test. Pass Plus consists of six practical modules that will improve your experience of driving in town, on rural roads, at night, and on motorways and dual carriageways. Not only will this course improve your confidence and safety on the roads, but it may also win you cheaper car insurance, with several insurance providers offering anything from 10% to 30% discounts on your first year premiums, if you have undertaken the course.

Some car insurance providers are also offering discounts to new drivers who agree to drive between the lower risk periods of, say, 6am to 11pm, as more accidents happen when there is reduced night time visibility. You may also find a provider, such as Norwich Union, that offers a speedier access to a no-claims discount. Its Rapid Bonus policy, for example, runs for nine, instead of the usual 12 months, meaning that you can gain your no claims discount earlier, providing you haven’t made a claim of course, and that you renew your insurance with Norwich Union.

You may also want to have a think about the type of car you drive in those early years. Something sporty may well seem more exciting, but you’ll seriously reduce your insurance premiums if you choose a small car with a low engine size instead. You can search the ABI database (www.abi.org.uk) to work out which cars may have cheaper car insurance premiums.

The location of your car will also make a difference. If you live in a built-up area and park your car on the road, your premiums are likely to be higher than if you live in the country and keep your car locked in a garage. But don’t think of lying about the location on your insurance application form (perhaps saying you keep the car at your family’s country address when, in fact, it’s been parked outside your London pad for the past six months). If you need to make a claim and your insurance company discovers the truth, you may find you’re not covered at all.

And, of course, it’s worth remembering that in the long-term you can significantly reduce the costs of your car insurance. Drive safely and observe the Highway Code at all times. Think about security, especially if you live in an urban area - installing an immobiliser or a car alarm will not only please your insurers but will also make it less likely that you will have to make a claim. By taking such measures, you can look forward to quickly accumulating your yearly no-claims discounts. Make it to five years without a claim and you may even be offered a discount as high as 75% on your car insurance.

As a final note, always remember that car insurance providers all offer different premiums for different circumstances. If you shop around now and find the best deal for your needs as a new driver, don’t forget to look around once again in a year’s time to ensure you’re still getting the best, most affordable deal that still gives you the level of cover you need.

**This material is for information purposes only and should not be considered financial advice. We strongly encourage our readers not to rely solely on this content, but to seek independent advice when making financial decisions.**