Car insurance advice

Passing your driving test is an exciting time, as soon as you’ve been handed your certificate and giving a great deal of thanks to your driving instructor, you can then look forward to the enjoyment of your new found freedom for many years to come.

Passing is the first step before you can hit the roads, of course now you must get a car that’s road legal and affordable. Your driving instructor may be able to give you a few tips of what sort of car to go for. Even though running a car while you’re young or have just passed your test isn’t considered cheap, there are a few things you can do to keep costs down.

The car and the cost:
When it comes to buying your car, there are a few things you should consider, which will help to keep the costs down right from the start. The costs usually involved while buying a car are: the initial cost of the car, road tax, MOT, servicing (including wear and tear items), repairs, fuel, breakdown cover and car insurance.

Saving in one area usually means you could be saving in another. For example, buying an economic car may also mean you’re exempt from road tax. Be sure to check how much everything will cost before you buy, and if you’re buying a car out of warranty, be sure to take into consideration the costs of repairs.

The cost of car insurance can be quite daunting, and is usually the deciding factor when it comes to buying a car, especially for young or newly qualified drivers, males’ premiums also suffer more than that of their female counterparts.

Keys in hand

Car insurance is mandatory for any vehicle that will use the public roads of the UK and there are a few factors that insurers look at to calculate your premium, including:

  • Your car – insurance group, value, engine size, modifications and desirability all help calculate how much your premium will be.
  • Postcode – whether you’re considered to be living in a risky area. You can’t necessarily help this, and moving maybe a little extreme to try and save costs on your car insurance. However, you can help by having a car with an alarm, new locks and immobiliser (installed or factory fitted), and by parking in a car park or in a well lit area if you don’t have a garage.  
  • Age and experience – Your age and how long you’ve held a licence for will have an effect on your premiums, with under 25’s being considered the most risky to insurers.
  • Claims history – The less you claim, the less you pay. Building up a no claims bonus can see discounts of up to 75%, be sure to protect it..
  • Occupation – If your job involves travelling in your own car or that you regularly transport passengers, you’ll see your premiums being higher than those who have their car in the works car park all day.
  • Mileage – The longer you’re on the roads, the more chance you have of having an accident.
  • Excess – The more you’re willing to pay, the cheaper the cost of your premium.

Unfortunately, prices will remain high for the younger and inexperienced driver as they are considered a high risk to insurers; however there are still methods and choices you can make to keep costs down as much as possible.

  • A small engine – having a fast first car will prove to be extremely expensive, try to keep to cars which have smaller engines, which will mean smaller premiums.
  • Low insurance group – cars are put into insurance categories depending on their value and performance. The cheaper and slower the car, the cheaper the premium.  
  • Desirability/Modifications – having or adding anything that makes your car more desirable to thieves, or faster than what it came out of the factory at will increase your premium
  • Adding an older driver – adding a more experienced driver to your policy could help reduce your premium.
  • Pass Plus – many insurance companies offer discounts to people who have undertaken the Pass Plus scheme, be sure to take advantage of it as soon as you can, as they’re only valid for a set amount of time.
  • Mileage – the longer you’re on the roads, the more chance you’ll have of having an accident. Try and keep your annual mileage down, ask yourself do you really need to drive to the shop around the corner or can you just walk. However, ensure you’re honest with your estimate, as you may find it difficult to claim if you’re not.
  • Excess - Young drivers (typically under 25’s) have a compulsory young drivers excess applied to their policy, there is also a voluntary excess you can opt for, increasing the excess will bring the cost down, just remember to be reasonable, as in the event of an accident you’ll be expected to pay that amount on top of the compulsory excess, before the insurer will give you a penny.
  • Usage – Your premium will fluctuate depending on what you use your car for. Expect higher prices if you use your car for work related errands. If its cheaper and as convenient to use public transport for work, then you can state you only use your car for social purposes, in turn reducing your premiums.
  • Security – Opting for a car with a good security system, or installing one yourself will put you in the insurer’s good books.
  • Offences – Racking up a bunch of motor offences won’t just cost you the one off fine, your insurer will consider you to be a higher risk or even refuse you cover if they deem you too dangerous.
  • Monthly payments – Try to avoid paying your premiums monthly if you can, as you’ll be looking at interest rates ranging between 13% and 29% APR. You could pay in one lump sum by looking into credit cards or loans with introductory interest rates and offers. Ensure you’re in the know before you make an application.  

Your policy:
After your premium has been calculated, you can then choose certain additional services to help you tailor your policy. Be sure to only opt for the things you think you’ll need, as you’ll be paying for them. The usual services include:

  • Legal protection and advice to cover all uninsured losses up to a certain agreed amount
  • A courtesy car for when yours is being repaired, or awaiting a settlement
  • Breakdown cover: national or European
  • Voluntary excess
  • Overseas cover, some companies have this as standard
  • Personal injuries and personal belongings cover
  • Monthly payments
  • Protected no claims bonus (usually only available after you’ve obtained a set number of years)
  • Access to other cars (there may be a minimum age or additional premium for this)

Where to go for insurance:
When looking for insurance, there are three places you can look:

Brokers are good for out of the ordinary policies, such as performance or kit car insurance, as well as insurance for those who have a tarnished driving record. Getting your policy through a broker may cost a bit more, as depending on the broker; you’ll be paying a hefty commission cost as well. There are a few brokers that operate online.

Going direct to the insurance companies either via the internet or by phone is great for convenience and speed. The only potential downside is that you could be paying more than you should be. You can reduce this risk by phoning or applying online to various different companies, however there may be some time involved filling in individual application forms.

Comparing prices online via price comparison sites such as moneysupermarket is great for retrieving quotes from various different insurers and brokers. You’ll only need to fill out one form and you’ll be presented with an array of different prices for you to choose.

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