Car insurance for new drivers – how does it work?
Bought your first car? Now you need to insure it, but how does it work and what's the cost?
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There’s a lot to consider when exploring the world of car insurance, and quite frankly, the number of options can be a bit overwhelming – especially for new drivers.
Whether you’ve just passed your test and are looking to buy a cheap car for beginners, or you passed a while ago and are now looking at the options, this simple guide should help you get the best car insurance deal possible.
How does new drivers’ car insurance work?
Once you've found the first car of your dreams, the next thing to consider is car insurance.
For new and young drivers, insurance can be costly, largely because statistically, one in every five new drivers is likely to make a claim in their first year of driving.
How much does car insurance cost for new drivers in the UK?
The cost varies depending on a lot of factors, including where you live, your history, your occupation, the car you drive, where you park it overnight, and – ultimately – the type of car insurance you take out.
This means we can’t give you an exact figure, but we can say that it’s often more expensive for new drivers because they have less experience on the roads, which often leads to a higher risk of an accident.
A study conducted by the AA and the Department of Transport shows that young drivers are a third more likely to die in an accident compared to more experienced drivers – don’t let the statistic scare you, but it does show why the insurance premiums are higher.
The research also showed that 23% of all young drivers are involved in an accident in their first two years of driving.
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When does new drivers’ car insurance go down?
Such high premiums can be off-putting, but you should also note that the cost of car finance deals drop over time thanks to no-claims bonuses and years of experience.
As a rule of thumb, if you pass your test soon after turning 17 and drive until you’re 25, your car insurance should see a significant drop – this depends, however, on factors including your driving history, which insurance company you’re with, and the car you drive.
How can I pay less for my car insurance?
There are ways to reduce the premiums, such as buying a car in a low insurance group – the lower the group, the lower the cost of insurance (1 being the lowest, 50 the highest).
New vehicles registered from 1 August 2024 are ranked under the new 'Vehicle Risk Rating' system, rather than the older insurance groups. These vehicles will be given a group correlating with insurance prices, based on things like desireability and security.
Another way to lower the cost of your insurance is to drive less. If you drive fewer miles, then you’re less likely to be involved in an accident. Your premiums will be rated accordingly, so the less you use your car, the less – in theory – you will pay.
Alternatively, drivers can agree to have a higher excess, which is the amount you must contribute if you have to claim. A higher excess means lower premiums, but a larger bill if you do make a claim.
Adding an older, experienced person as an additional driver can also lower premiums, but don’t be tempted to make that person the main driver. This is known as ‘fronting’ and is illegal.
A popular way to reduce premiums is to have a telematics 'black box' fitted that monitors how the car is driven, with the data being sent to the insurer.
If you drive safely, the cost of insurance will come down, but if you drive badly, your premiums will rise.
What are the best cars for new drivers?
When it comes to choosing your first car, there are a few things you should consider, including:
How big is it? – Smaller city cars tend to be favourable
What insurance group is it in? – The lower the group number, the better
How much is it? – We’d advise being sensible with the purchase cost, and don’t overstretch your budget. Your insurance costs reflect the market value of your car, so you can expect to pay higher premiums for a more expensive car. Hire Purchase and Personal Contract Purchase can be a helpful way to spread the cost of a car
Manual or automatic – This depends on your personal preference and which type of licence you hold. For example, if you’re a beginner who’s keener on a more faff-free driving experience, an automatic first car could be the right solution.
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Five affordable cars for new drivers to consider:
On a budget but can’t wait to get on the road? Some of the most affordable first cars for teenagers and new drivers include the Ford Fiesta, Toyota Aygo, Fiat 500, Citroen C1 and Skoda Citigo.
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