By Jack Sheppard - Last updated:
It’s no secret that car insurance for first time drivers is very high, but with some people under 22 having to pay as much as £1,500 to insure their car, it is becoming increasingly difficult for first time buyers to afford to their own car at all. Car insurance doesn’t need to be this expensive though, and there are many things you can do to drastically reduce the price of your insurance premiums.
Telematics, most commonly known as a black box, smart box, or pay as you go system, is a small black device that is fitted to your car after your insurance policy begins. This records data from your driving habits and feeds this information back to your insurance company, taking into account things like speed, acceleration, braking, and cornering.
If you drive well while this is installed, your insurance premiums are likely to substantially decrease. However if you are considered a reckless driver your insurance premiums will probably increase, or your policy could be cancelled altogether.
These schemes also come with a number of restrictions, which vary depending on the policy you take out. For example some black boxes come with an 11pm curfew. However in the past this has led to a number of collisions, due to people racing home to avoid a fine for driving too late, and so these time restrictive policies have become less common.
Other black boxes give you feedback online or via a mobile app. There are also telematics devices available that aren’t permanently fitted to your car, but instead attached to your car’s cigarette lighter, allowing you to turn it on and off at your pleasure, although this will in itself have an effect on your insurance premiums.
A fairly new alternative to a black box is a dash cam. Perhaps unsurprisingly, these are cameras that are fitted to your dashboard and they record what you see through the windscreen whenever you’re driving. Although they do not continuously monitor your driving, they are often referred to when making a claim.
The idea behind them is that they can show who is at fault when you have an accident, as young people are often unfairly blamed due to their lack of experience. However if you were actually at fault, the dash cam would obviously show this.
Black boxes tend to offer cheaper premiums to people under 20 however, as there’s less competition from telematics suppliers for people over 21, you could be better off getting a dash cam if you are above this age.
Many insurers will only offer dash-cam policies to drivers over 21 who have had at least one year’s driving experience, so to get the best savings it’ll probably be better to start off with a telematics policy, before moving to a dash-cam after you’ve gained some driving experience.
Many parents put their child as a named driver on a car, when they are in fact the main user. This is called fronting and is considered a form of fraud. What young drivers can do instead to reduce insurance premiums is to be insured as the main driver, but put an experienced driver as a named driver on their insurance policy.
You would expect adding more drivers to a policy would increase the cost of your insurance, but research shows that it could end up reducing it by up to £1000. The premium will be lower if the second driver has a few years driving experience, a good driving record with no points or convictions, and are actually likely to drive the car.
This is all about trial and error, you may find that your Mum reduces your premiums by £1000 whilst your Dad only reduces it by £500. It’s therefore important to play around to find how you can get the biggest possible discount.
Although it may be tempting to add a tonne of mods to your car to make it look cooler or drive faster, every modification you make, barring security ones will bump up the price of your premiums.
If you do make any changes to your car, even if you’ve just sprayed it another colour, tell your insurer immediately. If you don’t, and you have an accident, your insurer could argue that your car isn’t as described and refuse to pay your claim.
Don’t assume that insurers will reward loyalty by reducing your insurance premiums. It’s far more likely that they will increase your premiums, assuming that laziness will stop you from looking elsewhere. For example, one customer found that it would cost £1,200 to renew their policy, but a new policy with the same insurer would only cost £690.
Insurers usually send you a letter three weeks before your renewal date, informing you of your renewal price. This obviously doesn’t leave you much time to look elsewhere, however there’s no reason why you should wait until then to find a price somewhere else.
When looking for car insurance you’ll obviously get the best deals by checking price comparison websites, as these compare the prices offered by most insurance providers. Not all insurance companies are on every comparison site, so it’s best to compare a few to find the best ones.
Confused.com, Go Compare, Money Supermarket, and Compare the Market are the most famous comparison sites and also the most comprehensive. However, not every insurance company is on a comparison site. Most notably, Direct Line and Aviva do not list on comparison sites, so you’ll have to apply to them directly.
If your household has more than one car, you may get a better deal by getting a multi-car policy. These policies are offered by a number of insurers, most notably Admiral, however they don’t appear on comparison websites so you’ll have to apply directly to the insurance company. As all your cars will be insured under the same deal, their renewal date will also be the same.
The discount is usually ten percent, so it’s likely you’ll be able to find a cheaper standalone insurance policy elsewhere, but some insurers will give you a multi-car discount if all cars in the same household are insured under the same provider, even if they have been insured individually.
It can be tempting, when faced with paying thousands of pounds up front for your car insurance to instead stagger your payments and pay monthly. However this is often counter-productive as the total costs of monthly repayments are often a lot more than you’ll pay upfront.
The law requires that every driver has third-party insurance as a minimum, and many first time drivers automatically go for this option believing that it will be the cheapest; however this is not necessarily the case. Insurers assume that people who buy third-party insurance will be more reckless drivers and so often charge them more than they would for a comprehensive policy.
When buying insurance, don’t just limit yourself to a certain criteria- the broader your search, the cheaper your premiums will be.