motoring guide

Young drivers need to be 'sensible' when seeking better value car insurance

Amid an era of tightening belts to cope with rising costs and the effects of the credit crunch, young drivers can keep tightening their seatbelts too with a range of ways to cut back on car insurance costs without avoiding it altogether.

Statistically, young drivers are one of the most likely groups to be involved in a car accident, with more than a quarter of all drivers killed in crashes being in this age group, according to the Times.  The Association of British Insurers (ABI) advises individuals concerned about costs that while they are bound to have to pay more for their cover due to their age and experience, there are ways to reduce this expenditure.

Expert Malcolm Tarling says while it is tempting to purchase "the car of your dreams" when people first qualify, they need to think about the vehicle they are purchasing and how much it may cost in the long-run.  He claims there is no point in spending all the cash at their disposal if they cannot afford to run their perfect car and this includes how much it will cost them on car insurance.

"Insurers work by putting cars into twenty groups. The factors they take into account are the cost of the vehicle and spare parts. So a BMW will be at the top end of the range, whilst a Ford Escort will be at the lower end. I think that is the number one priority," Mr Tarling argues.

The specialist suggests young drivers should shop around in a market which is competitive, with policies having various aspects tailored to reward them for certain steps and behaviour, such as not driving at night or taking extra lessons.

For example, computerquoteinsurance.com offers new drivers a 30 per cent discount on cover if they hold a Pass Plus certificate, which is a training scheme accredited by the Driving Standards Agency, building on existing skills and improving safety and confidence.

The ABI points out young drivers who attempt to cut costs on their insurance where they should not could prove damaging later on.  For example, putting themselves down on their parents' car cover - known as "fronting" - can result in lower insurance premiums because they are typically based on the mothers' and fathers' claims record, age, driving history and occupation rather than the children's.  However, Mr Tarling states this technically constitutes fraud and is a "false economy" as it could cost everyone covered under the policy dear in the long term.

He notes: "If the insurer thinks you are, in fact, the main user when you have led them to believe that you are an occasional user, they could turn down a claim for damage and theft and their insurance will be more expensive in the future."

Younger drivers are ten times more likely to be in an accident if they are between 17 and 21 years old than if they were over the age of 35, which is why the policies are set as they are.
 
Every Investor confirms there are reasons for the fact under-25s pay 22 per cent of the total car insurance market, ranging from serious accidents to dangerous driving, of which 34 per cent is made up of people aged 21 and below.

Basing its comments on research from uSwitch.com, the website backs up the ABI's belief young drivers should think carefully when choosing a car, as engine size and performance can affect premiums alongside the actual value of the vehicle.

Other advice from the news provider is to avoid altering features on the motor, securing cover online and shopping around, with extra attention to detail to be paid on the application form to avoid small errors which can potentially cost more in the long run, as amendment fees can be charged in this instance.

Paying upfront as opposed to monthly instalments can also cut costs, avoiding any interest applied by some insurers.

The ABI has stressed on numerous occasions the risks of evading car insurance altogether as around one in twenty uninsured motorists are currently on British roads today.  A spokesperson from the company recently commented there are a number of reasons why the statistic is so high, but partly because "some people think they can get away with it".  The representative argued that historically the detection rate of offenders has been low but the police and the government are currently "very vigorously" coming down on the problem.

Automatic number plate recognition technology used in conjunction with a central database is responsible for around a thousand vehicles being confiscated in the past year alone, the representative said, which suggests an incentive to avoid committing crime and choosing alternatives to get the best deal instead.

He also pointed out: "Actions involving these drivers costs in excess of £500 million a year. That is a cost which is borne ultimately by the honest majority."

It was recently revealed teenage drivers may be able to cut costs in the future, should a call by the ABI into limiting the number of teenage passengers which can legally be carried in the first six months after qualifying be heeded.  According to the Times, findings in a report due for release from the association have revealed teenage drivers are at triple the risk of being in a fatal crash if they are travelling with a group of friends than they would be travelling alone.  The group have therefore asked the maximum number of passengers under the age of 20 be restricted to one for the first half-year after passing a driving test, which could avoid 270 deaths or serious injuries per year and cut premiums as a result of a drop in multi-million pound claims.

On the subject of speed and young drivers, the publication said on October 8th the Metropolitan Police are to appear at this year's Miles Per Hour show in Earl's Court, London, with their specially adapted Caparo T1 vehicle.  They will speak to motorists of all ages about fast cars - as is the theme of the show - but also the implications speed can also have on public roads, with their eagle-eye especially on impressionable young drivers.

Hence with the ABI urging young drivers to be "sensible" in choosing the type of car they are going to drive, the behaviour they adopt on the roads and the police cracking down on both speeding and uninsured drivers, it will be interesting to see how young drivers respond and how insurance premiums will look in future.

22 Jun 2009