Which car insurance is the cheapest for young drivers?

By Jessica Anne Wood

While often seen as too expensive, car insurance is something that every vehicle owner should have. However, this cost increases when it is a young driver, due to the perceived higher risk. But is there a way that young drivers can get lower insurance premiums?

Tip: Want to compare your car insurance with a competitive quote? Click here.

Precious Nduli, head of technical marketing at Discovery Insure, explains that traditional insurance works on averages and because there is generally a higher risk of accidents associated with young drivers, they would be charged higher premiums.

Lowering your insurance premiums

If you are insured with Discovery Insure, Nduli highlights that through the company’s rewards and incentives, drivers (both young and old) pay a premium directly related to their actual risk, rather than a higher premium based on the risk associated with the average young driver.

“If you are younger than 26, our Young Adult benefit, rewards you by giving you a percentage of your premiums back for being a good driver. Your rewards will be paid into a Rewards Fund which is increased or decreased depending on how you drive, payable to you in cash every six months. We can do this because through our technology we have the ability to know who is a good driver and who is not. We can measure a young person’s driving with DQ-Track, the latest telematics technology, to develop a scientific measure of how well they drive,” explains Nduli.

Furthermore, Nduli reveals that Discovery Insure also provides its clients with regular feedback on their driving behaviour to help drivers see which areas of their driving they need to improve. “Using the feedback and services we provide they will be able to improve their driving making them a better risk who can then benefit through a lower insurance cost. In addition, as with all our drivers on Vitalitydrive, our young drivers can earn monthly cashback on their fuel spend which is payable in cash every month.”

Warwick Bloom, head of group marketing for Hollard, highlights that it is important to look at the type of cover you want to take out, as this will have a big impact on your monthly premiums. “Car insurance policies are not all the same. At the two extremes are so called “comprehensive” policies, which offer cover for accidental damage, weather-related damage, theft, fire and third party liability (and often other, mostly optional, cover) and so-called “third party” policies, which provide cover only for third party liabilities (damage to someone else’s vehicle or property for which you are liable).”

Responsible driving

While premiums may be higher for a younger driver, it is important to list the real primary driver of a vehicle on the insurance policy. “A primary driver is the person who drives or is in possession of the vehicle most often. It is important that the right primary driver is noted on a policy as it may affect the premium and the outcome of a claim,” highlights Nduli.

Only take the cover you need

Bloom highlights that insurance policies often have a host of added services and benefits, which may increase your monthly premium. Some of these you may not need, so upon taking out car insurance, speak to your insurer about the services and features of the policy you are taking, if there are any that you don’t want, ask for them to be removed to help lower your monthly premium.

An example of a feature that will cost more is car hire. “Some car insurance policies include this automatically and increase your premium accordingly, but you need to ask yourself if it’s a benefit you actually need? Would you be able to get around should you be without a car for a while?” says Bloom.

If car hire is not something that you will require, ask for this to be removed from your policy. However, sometimes some of these are automatically included in the premium.

Picking the best insurance

It is difficult to identify which insurance would be the cheapest for a young driver, as there are many factors that need to be to be taken into consideration. These include your age, the type of vehicle, any historical claims, as well as things like your vehicle’s security and where it is parked. To get the best premium with the cover you want and need, shop around.

Bloom highlights that you should look at the following when choosing car insurance:

  • Terms and conditions, especially exclusions.
  • Excesses applicable.
  • Benefits or services automatically included, and at what limits.
  • Any additional fees.

Nduli adds: “Traditional insurance ignores the behavioural nature of risk. At Discovery Insure we believe that by encouraging young drivers to drive well we can reduce risk leading to fewer and less severe accidents. This is shared value in action as we benefit through lower claims and can pass on these savings to our clients effectively reducing their premiums whilst creating safer roads for all.”

 

Handy tip: Do you need vehicle finance or car insurance? You can apply through Justmoney.

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