he latest data shows that average premiums for young drivers aged 17 to 22 are up to £1,771 (AA British Insurance Premium Index July 2017).
And with insurers calculating car insurance premiums based on risk, the cost of young drivers insurance is only heading in one direction.
Why is young drivers car insurance so expensive?
The main reason car insurance for young drivers is so expensive is the risk the insurer takes — statistics show that young drivers are far more likely to be involved in accidents than drivers over the age of 25, with insurance premiums calculated to reflect the stats.
AA research shows that one in eight British drivers is aged 25 and under, with a quarter of all drivers involved in serious traffic collisions within this age group.
As well as being more likely to have an accident, young and new drivers often have to pay more for their car insurance because they haven’t had the chance to build up a no claims bonus over time.
This makes cheap car insurance for young drivers quite difficult to find, but you can compare insurance policies from different providers for new driver cover on uSwitch:
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How to find the best cheap car insurance for young drivers
There are a number of things you can do if you’re struggling with the high cost of car insurance for young drivers:
Find the cheapest cars to insure
Many things can impact the cost of young driver insurance and one of the first places to look at is the car itself.
Insurers place cars into individual insurance groups from 1 to 50. Typically, if the car is in group 1 it will be amongst the cheapest to insure and 50 will be the most expensive. Cars are rated on the following factors:
How quickly the car accelerates and its top speed
The value of the car as new
The security features the car has
How much it will cost and how long it will take to fix if it is broken
How much the individual parts cost
You can learn more about the type of cars which attract the cheapest insurance premiums by reading our guide to the cheapest cars to insure.
Increase your excess
Choosing to pay a higher excess — the amount you have to pay up front if you make a claim – could significantly lower the cost of young driver insurance.
However think realistically about whether you could afford to pay that lump sum if you end up needing to make a claim.
Don’t pay for what you don’t need
With a number of different types of car insurance policy out there, it pays to get an idea of what level you require. Don’t pay extra for what you don’t need.
The minimum level of cover to legally drive in the UK is third party car insurance. This will cover costs in repairs or injuries to any third party affected by an accident you cause. Any costs to your own car however will not be covered.
With a third party car insurance policy you will also not be compensated if your car is stolen or damaged. If you live in an area where theft and vandalism is common then you might want to consider getting third party, fire and theft cover.
As with regular third party insurance however, third party fire and theft won’t cover any injury costs or repair costs to your vehicle in the event of an accident. To get this level of cover, opt for a fully comprehensive insurance policy.
Take some time to consider what level of cover you need. Also, make sure you compare the whole car insurance market as you may be surprised at which level of cover comes out cheapest.
Add an experienced second driver to the policy
Adding an experienced and older named driver to the policy is another effective way to bring down the cost. This way the insurer is reassured that the young person will not be the only one driving the car, which reduces the chances of an accident occurring.
However, be careful of ‘fronting’. The car must be in the name of the main driver of the vehicle, otherwise you are breaking the law and any claims you make will be turned down and your insurance invalidated.
new drivers insurance
Don’t pay per month
It may not be possible for many young drivers to fork out the cost for car insurance in one go, but if this option is open to you, take it, as you could pay less in total by not paying in monthly instalments.
Telematics/Black box insurance
If you’re a careful driver, telematics (or black box insurance as it’s also known) could be the right move for you.
A telematics box will be installed in your car (or an app installed on your phone) that can monitor how and when you drive.
The technology measures factors like speed, mileage and braking and paints a picture of how safe a driver you are. So if you’re a safe driver and stick well within the speed limits then you could get your hands on cheap young driver insurance.
In fact, drivers aged 17-21 with zero no claims could save an average of £1,282 by choosing black box insurance over a standard policy (based on quotes generated by uSwitch between November 2016 and January 2017).
Some black box policies work more like pay-as-you-go mobile phone plans, where you can top up the number of miles you plan to cover.
Read more about black box insurance in our guide.
Make your car secure
Make your car more secure by adding security features such as an alarm and try to keep it out of harm’s way as much as possible. If you can park your car off the street, or even better — in a garage, then you will very likely see the quotes fall in price.
New drivers insurance
It is not just young drivers that are faced with sky-high premiums, new drivers insurance is similarly expensive. Ultimately, it comes down to the providers taking a risk on your inexperience.
New drivers of any age are often cited in statistics that show them being more likely to have an accident than their more experienced counterparts.
This often means that new driver insurance is likely to have the high premiums often associated with car insurance for young drivers.
You can read our guide to cheap car insurance for new drivers to learn more.
Car insurance rates have been climbing over recent years, and 2018 will see the continuation of that trend. If you’re in the market for car insurance for new drivers, say teens, or car insurance for college students, that isn’t good news, as rates are super high for inexperienced motorists. But you’re in the right place to learn how to lower car insurance costs, even though finding cheap car insurance for young drivers is challenging, it’s not impossible.
But, first, you may be wondering: Why is car insurance is so expensive?
Federal research shows people are driving more — the average miles driven per year is on the rise — and more motorists on the road means more accidents. The cost to repair newer model cars with high-tech safety devices and sensor technology is also increasing, as are medical costs for injuries. And don’t forget about the hurricane and hail damage from recent severe weather storms. Insurers are passing on some of these higher expenses to you in the form of higher car insurance rates to recoup their losses.
5 tips to get cheap car insurance for young drivers
To help you trim costs, Penny Gusner, CarInsurance.com consumer analyst, advises the following:
1. Take a defensive driving course or driver training course
Defensive driving classes go beyond the basics taught in driver’s education by having motorists learn how to drive in hazardous conditions, anticipate dangerous situations and avoid accidents. The best part? The cost is usually only $25 to $75 and you’ll typically snag a discount of five to 15 percent for three years. Note, however, that insurer and state law requirements for these discounts vary a great deal. For example, 21st Century Insurance offers a discount to drivers under the age of 21 who take a state approved defensive driver course but with Esurance the discount is not age-based and is available to all drivers in New York, New Jersey, North Dakota, Georgia and Oklahoma.
Another option, though it also comes with exceptions, is to take a driver training course. Some car insurance companies will offer a discount between five and 15 percent, for driving training courses, while others do not since it is part of the licensing process.
2. Stay on your parent’s policy
If at all possible, stay as a named driver on your parent’s policy as long as you can. This is usually the cheapest way to get insurance if you are a young driver. You and your parents can net a multi-car discount of up to 25 percent.
3. Be sure you are assigned to the cheapest car in the household
If your household has several cars, it can save money to have you assigned to a specific one — the one that’s cheapest to insure. Check your policy and be sure to double-check this with your insurer, as some companies will automatically assign young drivers to the most expensive vehicle unless you tell them otherwise.
4. Cash in on distance discounts
Car insurance for college students can be pricey for sure, but you can capitalize on certain discounts. One that can reap up to 20 percent off is the “Student Away” discount. Typically, you qualify if you are listed on your parent’s policy and drive one of their cars they keep at home but attend college 100 or miles away. Some insurers may also require that you are under age 26 and unmarried to receive the discount.
5. Compare car insurance quotes online
We fooled you, as chances are you thought we’d list the “good student discount,” which usually gives up to 15 percent off for those who maintain a “B” average, but most folks are aware of that. While it’s a bonus that’s good to get, and one we recommend you look into, you can likely save way more by simply doing a car insurance comparison to see who offers the lowest rates. Here’s why: Rates for the exact same coverage vary by hundreds of dollars, depending on which insurer you choose. That’s because each insurance company assesses risk differently and uses its own formula when deciding how much you pay. If you don’t shop around, you won’t save. You can see how much you can save by using our average car insurance rates tool, which shows rates by ZIP code for six age groups and three coverage levels, as well as the highest and lowest rates fielded from up to six major insurers.
Which auto insurance companies have the best rates?
To help you buy the most affordable coverage, in the chart below you’ll see average rates by company for each state for drivers age 20 for state minimum liability limits.