Young Driver Insurance UK: How to Cut Your First Premium

#Why young driver premiums are so high

Insurers set premiums by looking at the claims history of people who match your profile. Drivers aged 17 to 24 have more accidents per mile driven than any other age group, and the accidents tend to be more expensive when they happen. Add a brand new licence with no claim free history attached to it, and the starting point is high before you even pick a car.

The other factor is fraud. Young driver policies attract a high rate of false claims and so called fronting, where a parent pretends to be the main driver to bring the price down. Insurers price that risk into every quote. None of this is your fault, but it is the reason your first quote will look painful.

#The three levels of cover

Every UK car insurance policy comes in one of three forms. Knowing the difference matters because the cheapest tier is often not the cheapest in practice.

• Third party only: covers damage to other people and their property, but not your own car. Legally the minimum.
• Third party fire and theft: as above, plus your own car if it is stolen or burns out.
• Comprehensive: covers everything in the first two plus damage to your own car after an accident, even when the fault is yours.

For years third party was the cheap option, but it is now often the most expensive of the three for young drivers. Insurers assume that anyone choosing it is a higher risk. Always run a quote on all three tiers before you decide.

#What actually moves the price

Some factors are fixed. Your age, postcode, and driving history are what they are. Others you can change before you buy. The car you choose has the single biggest impact, followed by where you keep it overnight, your annual mileage, and your job description.

Cars are rated on the insurance groups scale of 1 to 50. A group 1 to 5 car is far cheaper to insure than a group 20 hatchback with a sporty trim. The classic young driver picks include the Ford Ka, Toyota Aygo, Hyundai i10, Skoda Citigo and the older Fiat 500 in 1.2 form. Stay away from anything with a turbo, anything badged ST, GTI, R or Cupra, and any modified car. Modifications including aftermarket alloys, lowered suspension and tinted windows can push your premium up by 20 to 50%.

#Black box and telematics

A telematics policy uses a small device or a phone app to record how you drive. Premiums typically come down by 30 to 50% on day one, and you build up further savings if your score stays high. The trade off is that night driving is often penalised or capped, and harsh braking, speeding and phone use will all show up. For most new drivers it is worth it. Read the black box telematics insurance guide for the detail.

#Add a named experienced driver

Adding a parent or older relative as a named driver is legal and reduces premiums on most policies, often by 10 to 20%. The rule is that you must still be the main driver. If your parent does most of the miles, the policy is fronted and that is insurance fraud. If a claim is made and the insurer works out the truth, the policy is voided and you are left to pay the bill yourself. Treat the named driver as a small bonus, not a workaround.

#Other quick wins

A few small changes regularly take hundreds off a quote. Try them all on a comparison site and compare like for like.

• Pay annually instead of monthly. Monthly is a credit agreement and adds 15 to 25% APR.
• Increase your voluntary excess to £250 or £500. Only do this if you could actually pay it after a claim.
• Use precise job titles. Some descriptions are cheaper than others for identical work.
• Park off-street if you can. Even a driveway versus a road space changes the price.
• Drop unused extras. Legal cover, key cover and breakdown can usually be bought separately for less.

#Build no claims as fast as you can

Each full year without a claim earns you a no claims bonus. After five claim free years most insurers cap the discount, but the difference between zero and five years is usually 60 to 75% off the base premium. That is why premiums tumble in your second and third years even without changing anything else. For a wider view of costs in your first year, see our guide on the first month after passing.

Compare quotes through at least two of the big four comparison sites, then check direct insurers like Direct Line, Aviva and NFU Mutual that do not appear on them. The total spread on a young driver quote can easily be £800. For wider context on test costs and budgeting, our driving test cost breakdown lays out the full picture.