In February, The Sun reported that 18- to 21-year-olds were shelling out over a tenth of their yearly pay on car insurance. The Association of British Insurers claimed that, for drivers in this age group, the average premium had reached £973; however, their average salary is merely £9,319.
These eye-opening figures show how big a financial burden car insurance has become for these drivers – as, on average, drivers in other age brackets spend no more than 2% of their pay on car insurance. However, young drivers can still resort to using various tricks to lower their premiums.
The three types of car insurance available are third party; third party, fire and theft; and fully comprehensive. As the third-party-only option offers the lowest level of cover compared to the other two types, you might understandably assume it to be the cheapest.
However, this isn’t always strictly borne out; insurers deem drivers with just third party cover a higher risk, MoneySavingExpert.com warns. In one instance of a low-risk young driver, the site found that they could yearly save £1,500 by choosing comprehensive rather than just third party cover.
Here’s another peculiar paradox: while you might expect adding a second driver to inflate an insurance policy’s price, doing so can actually have the opposite effect.
However, this depends on the second driver having a record of more responsible and safer driving. Furthermore, you might need to experiment by adding a range of drivers in turn, as logic does not always come into play concerning how a second driver will affect the price.
Why do young drivers face such prohibitively pricey premiums, anyway? It’s because they are often perceived as relatively risky drivers and, therefore, likelier to make claims compared to drivers from other age groups. Still, you could show an insurer that you aren’t as risky as other young drivers.
There are various means of doing this, including installing an alarm or immobiliser in the car and reducing your mileage. Both methods could help you lower your premiums.
You might not have realised how many different ways you could phrase your job description. Furthermore, it may have eluded your notice how much these ways could cut your premiums.
For example, you could lower your financial burden by, on the insurance form, calling yourself an illustrator instead of an artist or an editor, not a journalist. If you are a secretary, specifying your job as a PA could work well – but remember never to lie, as you would be guilty of fraud.
Even if you do find a cost-effective policy, it could rather rocket in price without your notice if you simply have it automatically renewed rather than shop around at renewal time.
Many policyholders don’t act to look for a new policy as it is about to expire. Many insurers know this, which is why they will hike the price for people who simply renew their existing policy with them without a second thought. Don’t allow yourself to fall into this trap!
If you lack time to visit various insurers’ sites to discern the most value-for-money policy for you, why not arrange for an insurance broker to compare quotes for you instead? The Money Advice Service advises that you choose one regulated by the Financial Conduct Authority. Call Wiser is a good example of such a broker.