Why are car insurance premiums so high for 19 year olds?

December 13th, 2019

In some cases, the car insurance premium paid by young drivers is several times above the value of the car. But what is the fundamental reason behind the high car insurance premium?

Well, car insurance companies effectively base the quoted premium on a set of statistical assumptions and, statistically speaking, 1 in 5 drivers have an accident in the 1st year on the road and 26% of vehicle accidents involve at least one driver being between the age of 17 and 24.

But its best not to get disheartened as there are ways in which you can bring that quote down.

Cheap Insurance

One of the first ways in which you can reduce your premium is by selecting the type of car insurance appropriately.

Generally, there are three types of car insurance.

Third party – This type of car insurance is the lowest level available and it’s the minimum required to legally drive on UK roads. Third party insurance only covers for people who claim against you and hence no pay off is given for damages incurred to yourself or your car.

Third party, fire and theft – in addition to the above, this type of insurance will pay out if your car is stolen or catches fire. But once again no pay-out is made for damages to your vehicle during an accident.

Comprehensive cover – This type of cover is the most popular as it covers all of the above including damages to your own vehicle too. So if your repair work is going to cost a lot of money, comprehensive insurance will cover the cost. However, given the clear benefits, comprehensive cover is likely to be more expensive than all the other types of car insurance.

On top of the above, insurance companies also offer optional extras such as a courtesy car and breakdown cover. But this will increase the amount of premium and hence you should consider if you actually need the benefit.

Moreover, Insurers offer customers the opportunity to pay their premium as one lump-sum or to have it spread on a monthly basis, but there is in fact a difference between the two options with paying upfront working out to be cheaper. Perhaps as a young driver, paying monthly is more affordable but you will still have to put forward a deposit and there may be an admin charge too.

To add, you can drive your car legally by being the named drivers on your parent’s policy. But if you have your own car, then it’s advisable to add your parents as the named driver. This will reduce the premium on your car as the insurer is reassured that a more experienced driver will also be using the vehicle in some instances.

But remember to always be honest with your car insurance company, if you are the main driver but you put your parents as the main driver in the bid to reduce the premium then this is known as fronting and is illegal.

Telematic car insurance

The telematics car insurance is also commonly known as the black box insurance as the insurance company would physically send an engineer out to fit a black box into your vehicle. This box uses satellite technology to transmit driving behaviour such as speed, acceleration, braking, time of travel etc. If you are a safe driver that drives during day light hours and obeys the rule of the road then you could get cheaper car insurance as the risk is now based on you as appose to the general public of the same age range.

Moreover, if you only require the vehicle during the weekends or for short period of time, you can get temporary cover for 1 to 28 days which would work out cheaper than getting a year’s worth of car insurance.

Car insurance group

The type of car you wish to drive is a major determinant on the premiums that is likely to be quoted. Depending on the make, model and specification the vehicle is categorised in a car insurance group which ranges between 1 to 50. Generally cars in the high car insurance categories lead to high premiums. So if you want cheap insurance, then it makes sense to get a car from one of the lower categories- this will most likely be a vehicle which has a small engine size and is not popular to thieves. To learn more, you can visit www.thatcham.org.

To add, you should be sure not make to any modification such as alloys, as these are seen to increase the risk of a claim and hence the premiums will elevate. But, updating the car’s security system should reduce the premium, so it’s advisable to install an alarm system or even an immobiliser.

Advanced driving courses

Many experts recommend that young drivers should improve their road skills by enrolling into an advance driving course. By completing a recognised driving course, you would become a safer driver on the road and hence insurers will offer a discount for the reduced risk of a claim.

Out of all the advanced courses, the most popular is the Driving Standard Agency’s Pass Plus scheme. But institutions such as Royal Society for the prevention of Accidents as well as the institute of Advanced Motorists and the RAC offer a similar course.

In most cases you will be required to pay for the advance driving course, but your local council may contribute towards the cost and the discount in premiums, which can be up to 35%, might offset the initial cost of the course. Also, as a more skilled driver you will build up your no claims discount more easily, leading to further discounts in the future.

Other money saving tips for 19 year olds

Further savings can also be made by increasing the level of excess on your policy. The excess is the amount you volunteer to pay in case of a claim. For example, if the voluntary excess is £100 and the insurance payout is £500, then you will only receive £400 towards your costs. Should you decide to increase the excess, the risk for the insurer effectively reduces and hence premiums should fall. But remember to have the excess at an affordable level otherwise you could be left in financial difficulty when making a claim.

Finally, remember to compare and shop around for the best deal in the market. By using the comparison tool at Free Price Compare, you can look through hundreds of insurers to see which best meets your needs and affordability.

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