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Newly-qualified driver? You’ll need insurance

Alamy Stock Photo
28 May 2021

ongratulations! Passing the driving test is one of life’s milestones worth celebrating. What’s not such a joyous moment for new drivers, however, is finding out the cost of being insured to drive on the UK’s roads.

Until now, you might have been paying learner driver’s insurance premiums. But, having passed your test, it’s time to brace yourself for a likely price hike to the cost of cover.

Thankfully, there are ways you can find cheaper car insurance and, if you continue to drive responsibly, you can keep bringing those costs down. Here’s how.

What affects the price of new driver insurance?

One of the biggest factors that determines what you’ll pay for cover is your choice of vehicle. Having passed your test, you might be eyeing up that high-powered motor on a garage forecourt. But even if you can afford it, can you afford to run it?

If you haven’t bought a car yet, do your research and see how much certain cars cost to insure. While other factors are considered, such as where you live, where you park, and how many miles you drive, the make and model will help you gauge how much the insurance premiums are likely to be.

Every car in the UK is allocated an insurance group to help insurers work out the cost of cover. These groups run from 1 to 50, cheapest to expensive. Cars with smaller engines are generally cheaper to insure, but it’s not always the case. So check before making a commitment to buy.

You can easily find out a car’s insurance group by checking online through the Thatcham website. Or, if you’re simply looking for a vehicle that’s cheap to insure, set your preference to ‘lowest car insurance group’ when doing a search at one of the big online retailers such as Auto Trader.

What kind of insurance can new drivers get?

Once you’re on the road, your choice of insurance is the same as it is for any other driver. There are three main policy types:

  • Fully comprehensive. The most extensive type of cover you can take out. If you’re involved in an incident where you’re at fault, the policy covers both you, your vehicle, as well as the other party. You’ll also be insured against fire and theft.
  • Third-party, fire and theft. If you’re involved in an accident that’s your fault, this insurance only covers the other party, not you or your vehicle.
  • Third-party only. The legal minimum level of cover you must have in place to drive on the road. It will cover costs for a third-party if you cause an accident, but you won’t be covered if your vehicle is stolen or damaged.

Why is new driver insurance so expensive?

Insurers see inexperienced, and often young drivers, as being more at risk of having an accident. Statistics back this up, which is why premiums can feel unfairly expensive when you’re starting out. The good news is that if you drive responsibly and build up a clean record, your insurance costs should reduce in the future.

Do I have to have insurance?

In short, yes. If you are found to be driving a vehicle without insurance, you could be fined, face prosecution, and your car could be taken away or destroyed. If you have a car but want to stop taxing and insuring it and take it off the road, you also need to let the authorities know by filling in a Statutory Off-Road Notification (SORN).

What’s a black box and should I get one for my car?

While new drivers can buy traditional car insurance by paying monthly or annual premiums, they may also be tempted with the option of telematics insurance, also known as black box insurance.

Telematics means that your driving is monitored by the insurer. This gives you the chance to prove you are responsible behind the wheel, with the hope of bringing down insurance costs in the future.

It uses smart technology through either a small black box installed under your dashboard, a plug-in device, or an app on your smartphone. The technology feeds back information to the insurer on speed, acceleration, braking, cornering, distance travelled and when you are on the road. You can view your black box data on your insurance provider’s website or app and over time your premiums should adjust to reflect your habits.

For new drivers this can prove a cheaper option than standard insurance, but you may not reduce costs dramatically at the start.

What other insurance options are there for new drivers?

  • Pay as you go: this is still an evolving area, where you’re charged a rate based on the miles you drive, when and where you drive, plus a flat fee for when the car is parked up.
  • Short term: this type of cover is typically available for a set period up to 30 days and could be more cost-effective if you only plan to drive for a limited time. For example, for students who plan to travel in a few months after completing their studies, but need a car in the interim.

How can I cut insurance costs as a new driver?

There are several things to think about to keep insurance costs down:

  • Make and model of car: the flashier and faster your car, the more you’ll pay in premiums. You don’t necessarily want an old banger, though. Cars with modern safety systems are viewed preferentially by insurers as it’s the people inside that matter most.
  • Get a black box: asking insurers to use smart tech to monitor your driving habits might be a more affordable option for new drivers. There’s also the added incentive to retain the good habits developed while learning – as speeding and braking late will be picked up by your insurer.
  • Shop around: don’t make the mistake of plumping for the first offer you get. Use comparison sites to find cheaper deals – more than one comparison site is recommended as none cover the whole of the market. There are also some insurers that aren’t on comparison sites at all, so to be really diligent you could get quotes from them direct.
  • Compare all types of insurance: you might think that third-party only cover, featuring the minimum required insurance, will keep premiums down. But this isn’t always the case. Insurers use smart technology before pumping out quotes and you may find that fully comprehensive insurance is as cheap or even cheaper.
  • Add a named driver: by adding a more experienced driver to your policy, you’re telling your insurer that you won’t be the only person driving the car. They often see this as reducing risk, which brings down prices. However, if you are the main driver, you must disclose this. Flipping it, so you become the named driver could invalidate your insurance.
  • Pay a higher excess: this is the amount you agree to pay on any claim before the insurance provider covers the rest. By increasing the excess, you can bring down premiums. But be wary you don’t have an excess so high that you couldn’t afford it if you needed to claim.
  • Park safely and securely: you may be limited in your options, but having a locked garage to store your car overnight, or even parking off-road, can help chip away at your premiums. The same holds for car security systems acting as a deterrent for thieves looking to break in and pinch your vehicle.
  • Paying annually: while the lump sum might be a bit of a hit, if you know you are going to want to drive your car for the full year to come, then one annual upfront payment is often cheaper than monthly premiums. An easy way to view it is that you’re taking out a year’s contract with your insurer and they are giving you a small discount for paying it all at the start.
  • Keep the miles down: you’ll be asked how far you plan to drive in a year when getting a quote. While you must be as accurate as possible or risk invalidating your cover, planning to spend less time on the road could bring down the insurance costs.
  • Build up your no claims: it doesn’t happen instantly, but by driving responsibly and keeping a clean licence you’ll build up trust and a no claims bonus with insurers. This will earn you a discount on future policies and can be taken with you to your next insurer.
  • Pass an advanced drivers course: taking your driving to the next level by passing an advanced course is looked upon favourable by insurers. Plus, you’re used to taking tests now anyway!