May 29, 2018 at 5:29 PM
How to lower the cost of motoring for new drivers
Newly qualified drivers can face insurance premiums that are more than double those of their more mature and more experienced road users. Running a car or a van is an expensive proposition at the best of times, but it can be even more of a drain on a wallet for a new driver. While some adults that have been driving for many years, without any claims, can enjoy annual car insurance premiums under £300, the average newly-qualified driver aged 17 – 22 pays more than £1,400 per year. So, the team at Avon Valley Garage have compiled a few tips to help you to save money on running your first car, and get the best deal when it comes to insurance.
It’s common knowledge that it makes sense to use comparison websites such as GoCompare, comparethemarket.com, Moneysupermarket and Confused.com to compare quotes and find the best deal, but one thing that a lot of new drivers don’t realise is that the type of insurance matters too. Don’t assume that third party will always be cheaper than third party, fire and theft or even than fully comprehensive insurance. To some insurance providers, the drivers who are willing to choose a better level of insurance are perceived to be lower risk than those who choose third party only. The “better” insurance could actually be cheaper. With the right used cars for new drivers and a good insurance policy, you could save a fortune.
Adding a second, low-risk family member as an occasional user of the vehicle could help to cut costs. Be aware, however, that it is fraud to claim someone is the main driver of the vehicle, if they are not. If you do this and get caught out then not only would it void your car insurance, it could leave you facing a criminal conviction.
This deliberate misleading of your insurance company is known as 'fronting'. New motorists who have just passed their driving test drivers, desperate for lower insurance premiums have been known to take out an insurance policy in a spouse or family member's name, claiming the more experienced driver is actually the main driver of the car. The newly qualified driver is then added to the policy as a 'named driver', however, additional drivers on a car insurance policy are supposed to be those who only use the car occassionally. The main driver is the primary user of the vehicle. So if use a car to drive to and from college, university or work every day, plus, use the car to socialise of an evening and weekend, then you are probably defined as the main driver and therefore, should have your own car insurance policy.
Car insurance rates are calculated by an algorithm which looks at the company’s own policies, the level of cover that the customer chooses and the level of risk that they present. The level of risk is based on things such as whether or not the driver has passed extra driving courses, when and where they do the most driving, where they park their car, security devices, and whether or not the driver’s license is clean. Some of the used cars for new drivers at Avon Valley Garage, if parked off-street, with an immobilizer fitted, can be incredibly affordable to insure. What's more, those used cars will usually consume less fuel and be generally lower-maintenance than some newer models.
Insurance companies are not permitted to discriminate based on things such as age or gender, however they can base their prices on other things, and the type of car a person drives matters – as does whether or not the car has been modified. The power of the engine, value of the vehicle, and the presence of extras such as alloy wheels, spoilers, etc, can all change the cost. It may not be glamorous to have a fairly basic spec car with a less powerful engine, but it’s a good idea to get a few years of driving experience before upgrading, because it could save hundreds, if not thousands, of pounds when it comes to insuring your first car. If you are shopping for a vehicle, then consider an affordable used car that is free from fancy additional extras or modifications - included factory-fitted options. First cars should be practical, not flashy. If your do choose to splash out on a desirable first car with lots of optional equipment, make sure it is all covered by your insurer. Not declaring modifications or extra equipment - even factory-fitted options, can mean your insurance company may not cover them in the event of a claim - or worse, it could invalidate your insurance.
Your job description can matter, too. Sadly, a 'student' may pay more than an 'accountant'. Someone who is unemployed may pay more than someone who is in employment. Insurers don't have every single occupation listed on their databases and may, for example, ask you to use a more general job title, such as 'events organiser' if there is no option for 'wedding planner'. However, tweaking the wording is NOT the same as misleading your insurer by giving them an inaccurate job description!
It would be fraud to lie or misrepresent your job, however choosing the right wording for your job description could save you a lot of money on your insurance.
Your insurance provider will ask you about things like your job, and your expected annual mileage, and will also want to know if you have made a claim in the last few years. You should tell your insurance company about these things when you go looking for a policy. If you fail to tell them and it comes up when you try to make a claim, then you could find that the claim is invalid. If you are caught out and have your policy cancelled, then it will become very difficult and incredibly expensive to get a new car insurance policy elsewhere.
In the event of an accident, you will need to pay an excess when making a claim with your insurer. The total excess is made up of a compulsory and a voluntary excess. For example, if you have a compulsory excess of £350 and a voluntary excess of £500, you'll have to pay £800. One way to save money on your insurance is to set a high voluntary excess, however, as a new driver, you may have a high compulsory excess for being a young or inexperienced driver. If you set your voluntary excess at £1,000 when buying your first car insurance policy then this could save you a lot of money over the year. However, this does mean that if you need to make a claim on your car insurance policy, then you will have to pay that excess up front so don't set it too high, otherwise you will be off the road until you can afford to pay. The policy excesses, including any young/inexperienced driver excess, will be clearly described in the policy documents and should be understood by the proposer at the quotation stage. However, having a lower excess can be a false economy. If you aren’t planning on claiming a few hundred pounds because you know that the impact on future insurance prices would not be worth it, then why pay more for having that lower excess in the first place?