Find cheaper car insurance for teens
- Accidents involving young drivers are disproportionately high, so insurance can be more costly for them
- A new car has more safety features than an older, second-hand vehicle and may help to reduce a young driver's premium
- Pay-as-you-go policies, or car insurance cover which allows teenagers to be added to existing policies for entire families, will raise the premium for all cars
The driving lessons have been booked, the L-plates are stuck on the bumper and you've perused all the second-hand cars in your county.
But for teenagers getting behind the wheel for the first time, one of the most important aspects to consider is car insurance.
You can avoid high premiums by:
- Carefully shopping for the right car
- Side-stepping modifications which could push up premiums
- Bumping up experience behind the wheel
- Comparing car insurance and different types of policies
Car insurance for teenagers
According to 2016 research by the RAC Foundation, young drivers in the UK between the ages of 17 and 25 account for only 7% of all licence holders, but are involved in 26% of all road traffic incidents which result in deaths and serious injuries.
Teenagers have less driving experience than most other road users - no matter how many hours they've racked up with their instructor, or how easy they found their driving test.
"Passing a driving test means someone has demonstrated a basic competence to drive, but they're most certainly not experienced drivers at this point," says Ian McIntosh, chief executive of RED Driving School.
"During their first year on the road, new drivers are far more likely to have an accident and this is why insurance costs are higher.
"In addition, teenager drivers can be over-confident and hence are at greater risk than an older, new driver."
Separate, multi-car and pay-as-you-go policies
A separate, dedicated policy solely for your teen may be the most beneficial, but it's best to shop around and see what's most appropriate for your circumstances and their needs.
You may encounter the following policies as you shop around:
- Basic car insurance that protects teenagers if they damage another car, property or injure another person, but not injuries to themself or damage to their own vehicle in an accident. These policies are third party only or third party, fire and theft
- Fully comprehensive car insurance covers the above, as well as damage to their own vehicle. They may also offer benefits such as a courtesy car if you're in an accident, personal injury cover and theft of some personal possessions
- Surprisingly, third party car insurance policies are not always the cheapest option, so advise your teenager that whether they shop online, or call an insurer, to compare all the options before making a choice
"A major benefit of the teenager having his or her own policy is that they will start earning their own no claims discount, which will make subsequent years cheaper," explains Alex Johnson from Marmalade, a car insurer that specialises in young drivers.
"It also means that the young driver will not be risking the parents’well-earned no claims if they need to make a claim."
If you're considering a pay-as-you-go policy, or multi-car policies which allow teenagers to be added to existing policies that cover entire families at the same address, be wary that the premium could become a lot more expensive with a teenager on the policy.
"The risk would still be calculated based on the highest risk driver - the teenager," explains Ian McIntosh at RED Driving School.
"It will simply make all the cars more expensive to insure.
"And while pay-as-you-go policies can be useful for customers keen to spread the cost, they'll almost certainly pay more in the long run."
How to reduce the cost of insurance
The good news is that there are various ways to keep car insurance costs manageable, and remember that even if the premium is higher than you would like, the premium cost should decrease if the driver takes extra care within the first year.
Taking extra care
If you have a black box (telematics) insurance policy, you may start to feel the benefits of safer driving within the first year.
"If a young person can manage the first six high-risk months of solo driving without incident, his or her premium should start to come down, and a specialist insurer will make this sure this happens," points out Rodney Kumar at IAM RoadSmart, a motoring charity which campaigns to improve road safety by improving driver skills.†
Be wary that if you plump for a standard car insurance policy, the price is fixed all year.
Take a Pass Plus course
Teenagers should also consider signing up for an advanced driving course, which in an insurer's eyes may reduce your risk of accidents.
One example of these is the government-backed Pass Plus - a six-hour course which can be booked with accredited Pass Plus instructors.
"For drivers aged 19 and over, an advanced driving course will result in a much more competitive quote from many insurance companies," explains Kumar.
Black box, or telematics car insurance, calculates what your car insurance premium should be by fitting a device to your car, collecting data about the speed at which you drive, how frequently you brake and accelerate, when you travel and the type of roads you drive on.
"Fitting one of the black boxes often provided by insurance companies can also help to reward good driving and keep costs under control," says Kumar.
Are teens better off insuring a new or old car?
Parents who believe that splashing out on a new car for newly qualified drivers is a false economy may be mistaken.
"It’s sure to be a compromise, depending on budget, but we would always prioritise safety features such as airbags, anti-lock brakes (ABS) and traction control; this usually means a more modern car. " says Kumar.
"Take some time to research the standard features - this isn't always easy with a second-hand car, but it could be a lifesaver.
On the plus side, anti-lock breaking systems (ABS) are standard on all new cars sold in the EU since 2004 so there's a wide choice out there."
Car modifications may push up the price of the premium
Look beyond the initial the cost of tinted windows or chrome alloys - modifications made to cars insured by new drivers are likely to push up the cost of insurance, too.
Other factors include the vehicle's value and the size of the engine.
As a general rule, the higher the value of a car or individual part, the higher the insurance costs, and it's almost impossible to guess the costs of insurance associated with a certain car.
"For drivers aged 19 and over, an advanced driving course will result in a much more competitive quote from many insurance companies”
For example, a Skoda Citigo hatchback is 11 insurance categories lower than the category for the cheapest Mini.
Teens should get breakdown cover
Browse any insurance policy and you'd be forgiven for thinking it's been written in a foreign language, but it's important that teenagers understand their contracts and know which extras are worth paying for.
Breakdown cover is especially important for younger drivers, who are more likely to have accidents or to break down, and more likely to damage their own cars when trying to fix minor problems - jacking up a car incorrectly can cause thousands of pounds' worth of damage.
"When buying insurance, it is important not to assume less cover means cheaper cover," warns Chloe French at Direct Line DrivePlus.
"Motorists should choose the most comprehensive cover they can afford. When it comes to excesses, they should consider paying a higher excess on top of the compulsory excess. This can reduce the cost of car insurance premiums; however, motorists should ensure they are able to afford to pay the excess if they have an accident."
Will teenagers benefit from no-claims discount?
A no-claims discount (NCD) is a discount which reduces the cost of insurance for drivers who don't make insurance claims.
The amount saved is proportionate to the consecutive number of years that a driver has held a policy without making a claim.
Drivers start with zero NCD, and if a claim is made, the NCD resets to zero - unless no claims protection (NCP) has been purchased at an additional cost.
It's a reminder that driving carefully can reap huge rewards - The Alliance of British Drivers points out that after just one year, a driver with no claims can reduce insurance costs by up to 30%.†
Insurance companies will often cap the discount at five years, although this can still allow for a reduction of up to 60%.