Posts tagged young
We’ve mentioned this before, but a recent article in the Independent on Sunday has nicely highlighted how the practice of getting insurance under a parent’s (or other relative’s) name, known in our industry as ‘fronting’ could leave you severely out of pocket.
Representatives from Zurich, More Than (Royal Sun Alliance’s consumer brand) and Norwich Union (currently being rebranded to Aviva) were wheeled out warning that fronting is a bad idea for all concerned.
Keith Lewis from Zurich said:
“Not only can it lead to a claim being refused but also both the young person and their parents can be charged with insurance fraud.”
wheras moreth>n’s Keith Maxwell adds
“One of the first things we check when a claim comes in is whether there has been any fronting. It’s not a wise move.”
So what can young drivers do about bringing down the cost of car insurance. The distinguished panel share some tips:
“The quickest way to cut this is by building up a no-claims bonus [in your own name], which can ultimately reduce premiums by half to two-thirds.” Keith Maxwell (morethan)
“This is the passport to cheaper premiums. It’s best to bite the bullet and start building it up as quickly as possible,” adds Erik Nelson (NU)
Agreed. It’s worth pointing out that although you will pay more in the short term, if you steer clear of too many claims, you will save money in the long run – especially when it is time to leave the family home.
“Look at taking the Pass Plus driving course. This advanced qualification can bring discounts of 10 per cent on premiums.” Erik Nelson (NU)
The Passplus course will save you money, but NU seem to be a bit stingy here. Some of our schemes offer a discount of up to 40% for Pass Plus qualified drivers.
“We offer a rapid bonus scheme. Basically, you insure the car in a block of nine months, at the end of which you are credited with a full year’s no-claims bonus,” Erik Nelson (NU)
What Mr Nelson doesn’t mention, is that these “Bonus Accelerator” policies, also touted by Admiral/Elephant, often have a few drawbacks. Frequently they charge you a higher monthly fee for 10 months than you would pay on a twelve monthly basis. Secondly, this undermines the basis of No Claims discount somewhat, and, as a result, some companies are reluctant to accept bonus from these accelerator policies. Companies, which have, in the past included such well known names as .. er.. Norwich Union! Quote from the thread linked above
“It seems a bit confusing as I got a quote from Norwich Union with 1 years NCB for £327 but when I spoke to them on the phone and tolod them it was a 10 month BAP, they said they didn’t recognise it and could only quote me over £500.”
Norwich Union have clearly changed their mind since then.
More Than and Norwich Union, have both run “Black Box” powered Pay as You Drive schemes, although, as Mr Nelson explains, Norwich Union have had to cancel these.
“We had hoped … that the car manufacturers would start offering the GPS boxes as standard. Ultimately, the expense meant we had to call a pause.”
Another thing we’ve been saying for a while, is that these schemes are using technology for its own sake – drivers who don’t drive as far can benefit from discounts on a limited mileage policy without having to submit to curfews or corporate snooping.
“Go for a smaller car in a low insurance group. And consider if you should go with third party, fire and theft cover rather than fully comprehensive, and whether you need the car for commuting or just leisure driving.” Keith Lewis, Zurich
This is all very sensible stuff. If your car is low value (let’s face it, most people start off with a banger) TPFT is the most sensible level of cover. We made a list of the ten cheapest cars for young drivers, but there are others that fit the common theme – low engine capacity, small cars with ready availability of cheap parts.
“Younger drivers will have an excess imposed, but by agreeing to a slightly larger one, the premiums can be cut.” Keith Maxwell (Morethan)
Very true. A voluntary excess can reduce the premium, but be careful not to raise it too high, as if you have an accident you may have to fork out the amount of your excess before you can get back on the road.
So, some good tips, and some iffy ones from the major insurers, but I have a few more young driver car insurance tips that might help out:
- Join an owners club or online forum. This can bring you a discount of up to 15% on a policy, easily covering any membership fees with the insurance saving.
- Take extra security precautions to reap an extra discount. So fit the best alarm you can, and try and persuade your dad to let you keep your car in the garage.
- Can’t find a PassPlus near you? Well there are plenty about, but perhaps you might find a more convenient venue doing the IAM or Max Driver courses. Don’t worry – we do discounts for those as well.
- Be wary of comparison sites. As you’ve seen above, some companies will try and foist a 10 month ‘accelerator’ policy. Another advantage to the companies pushing these is that it gives them an unfair advantage on aggregator sites if everyone else is offering 12 month policies – remember they are offering around 17% less cover. It is always best to include a specialist broker or two when it comes to ringing around. You will usually find that you end up paying less over the phone than you do online – despite what you might think.
To speak to a specialist now, you can call us on 08000 83 88 33.
I was glad we were able to help a young client with a problem. Insurance for young drivers is difficult to find at the best of times, but if you are a nineteen year old young driver, a bloke, live in London, and you need to insure a vehicle that is not only electrically powered, but is also q-plated and a milk float, there are very few insurers willing to offer cover.
Thankfully, because we have such a large panel of insurers, our commercial vehicles insurance department was able to help out a young man in exactly that situation, who had been looking, without any luck, for someone who could cover his 1987 milk float. And whilst the rate was never going to be particularly cheap, it was a good price for the situation, and he’s now got the coolest ride in London.
Here’s his blog and Flickr.
And if you need milk float insurance, give us a call on 08000 83 88 33.
Updated June 2012 with latest prices
There’s no getting away from it. Car insurance for 17 year olds is expensive. The simple fact is, the youngest drivers on our roads are, on the whole more dangerous, owing to their understandable lack of experience behind the wheel.
But if you are a young driver, there are things you can do to help yourself. First off, do an advanced driving course, like PassPlus, Btec level II, IAM, RoSPA or Max Driver. By getting extra skills and experience, you’ll be making yourself a safer driver and young drivers will save much more than the cost of the course on their first insurance premium.
Second, take a limited mileage policy if you can commit to driving less than, say 1500, 3,000 or 5,000 miles a year. This will save you money, and is a more convenient way of getting a discount than installing a “Pay as You Drive” black box into your car, where some insurers will discount for a limited mileage but can stop you driving at particular times of the day!!
Joining an owners club can drop your premium by up to 15%, parking your car in the garage will probably save you more than your dad, and fitting an alarm will bring down the premium too. Also adding a parent onto the policy will further reduce your premium.
So far, so good, but there are some factors you can’t, or are unlikely to change. You can’t make yourself any older, and you probably don’t want to move house just to get cheaper car insurance. So that leaves the car that you choose as the main factor in determining the price you will pay.
So what is the cheapest car to insure. We did some research and the result may surprise you.
The cheapest car to insure, for a teenage driver, is, by a country mile, the classic VW Beetle. Other classics have also done well, with the Ford Anglia coming in 3rd and the Citroen 2CV6 coming 4th, but it’s not just a list of bangers with respectable modern motors like the Vauxhall Corsa, Peugeot 106 and the quirky Vauxhall Agila all doing very well.
Of course, not all classic beetles are all that old – production continued in Mexico and Brazil right up to 2003, and some enthusiasts import these to the UK enjoying the classic Beetle styling and air-cooled power, with a few (slightly) more modern creature comforts. Check out mexibugs, for more details.
Here is the list of cars, you’ll notice that almost all of them are low powered 1 litre engines – if you go for a more powerful car too soon, your premium will accelerate faster than your car, for example, if that Renault 5 at number nine were the turbo version, the premium for a bloke would be £4,000, so watch out. All the quotes below are for Third Party Fire & Theft Cover for a 17 year old driver living in a moderate-to-low risk area in a white collar occupation and assume the car is valued at less than £5,000.
|Car model / engine size||Male||Female|
|Volkswagen Beetle (old shape, up to 1600cc)||1450||1000|
|Ford Anglia 1000cc||1890||850|
|Vauxhall Agila 1000c||1980||1500|
|Vauxhall Corsa 1000c||1980||1500|
|Hyundai Amica 1000c||2030||1530|
|Hyundai Atoz 1000c||2030||1530|
|Fiat 126 0652cc||2030||950|
|Austi Mini 1000cc||2150||1150|
|Citroen C1 1000cc||2170||1200|
|Renault Clio 1149cc||2220||1630|
|Daewoo Matiz 1000cc||2200||1680|
|Peugeot 106 1000cc||2250||1700|
|Fiat uno 1000cc||2250||1500|
|Fiat Panda 1000cc||2250||1700|
|Volkswagen Fox 1200cc||2280||1290|
|Suzuki Alto 1000cc||2350||1770|
|Volkswagen Lupo 1000cc||2350||1550|
|Seat Ibiza 1000cc||2350||1680|
|Daihatsu Cuore 1000cc||2600||1640|
|Toyota Aygo 1000cc||2600||1120|