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Young drivers’ car insurance premiums fall to a record low – five ways to keep on saving

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Typical insurance costs for young drivers have fallen by 10% to £1,062, according to a new study by Compare the Market.

The overall cost of running a car (including fuel, road tax, MOT, breakdown cover and insurance) for 17-24 year olds has fallen by £536 from a year on the other in the first six months of 2021, to settle at £1,737 – the lowest figure since the comparison site launched its ‘Young Drivers’ search in 2015.

Insurance accounts for more than half (61%) of that total, at £1,062, but the cost has fallen by 10% or £120 year-on-year.

However, lower prices are likely to be a pandemic-related blow and young drivers still face the highest premiums of any age group.

Here, which one? Take a closer look at how car insurance costs vary by age, why the drop in costs for young motorists might be short-lived, and offers tips for lowering premiums if you’re a young driver.

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How Age Affects Car Insurance Premiums

Young drivers generally face higher insurance premiums, as they are generally considered to be more at risk.

The table below shows the average premiums for the first six months of 2021, broken down by different age groups, according to Compare the Market.

Source: Compare the Market., August 25, 2021.

As you can see, premiums decrease as drivers age, reaching a minimum for motorists between the ages of 65 and 79.

Why Cheaper Car Insurance Premiums Might Be Temporary

Many factors will influence average insurance costs, but one of the biggest right now could be the reduction in the distance people have traveled since the start of the pandemic.

During the first Covid-19 lockdown, some – but not all – insurers offered customers discounts to reflect the fact that they weren’t on the road as much as they had estimated when calculating their premiums.

We advised drivers to consider contacting their insurers to lower their annual mileage estimates and qualify for a possible premium reduction or discount.

This year, young drivers are guaranteed to drive 3,541 miles on average, down more than 50% from 7,347 miles the year before, according to Compare the Market.

Halving this average distance will have contributed to the reduction in insurance premiums and fuel costs that young drivers have experienced this year.

However, you may not be able to get used to these lower prices. With the end of lockdown restrictions and more cars on the road, that average mileage could increase back to its pre-pandemic level, potentially bringing premium costs with it.

  • Learn more:how to find cheap car insurance

How can young drivers save on car insurance?

Since you’re potentially facing the highest auto insurance premiums of any age group, it’s important to do all you can to find the best and most affordable insurance policy for you. Here are our top tips for saving on car insurance if you’re a young driver.

1. Choose an affordable car

Cars with smaller engines generally cost less to insure. So driving one of these vehicles instead of a larger vehicle can help you save money.

In addition to your age and mileage, the model of your car will make a difference to your insurance premium.

Compare the Market has compiled a list of the most popular cars among 17-24 year olds, along with their average insurance premiums. If you’re thinking of buying one of the cars below, here’s what you could pay.

Source: Compare the Market, August 25, 2021

2. Do not automatically renew

If you’re a young driver, you might be pleased to see your renewal quote is lower this year. However, it always pays to shop around.

Young drivers could save £178 by switching premiums instead of opting for auto-renewal, according to Compare the Market.

Historically, insurance’s “loyalty penalty” has left long-time customers paying more for insurance than new customers with the same insurer.

In May, the Financial Conduct Authority (FCA) announced that it prohibit the loyalty penalty by 1 January 2022, saving customers around £4.2 billion over 10 years.

In the meantime, comparing your insurance expiration dates is still the best way to get the best price.

3. Read Which? Comments

Every year, we ask thousands of real auto insurance customers who have claimed how they would rate their insurer.

We combine this with rigorous analysis of over 73 car insurance policy elements to create our car insurance reviews, separating the worst from the best.

Who? members can find out how insurers fared, along with our list of recommended providers, in our best and worst auto insurance guide.

  • Learn more:The best and worst car insurers revealed

4. Add a named driver but avoid “coping”

Sometimes young motorists are insured as “additional” or “named” drivers on their parents’ insurance policies in order to save money.

If you really are a second driver, and not the primary driver, of your parents’ car, that’s fine. However, if you use the car most yourself, this is called “fading” and is technically insurance fraud.

According to GoCompare, nearly one in four parents could risk criminal prosecution by “facing” their child’s car insurance policy.

The comparison website surveyed more than 1,000 parents of children aged 17 to 25 who were learning to drive or currently driving. Some 23% said they had insured their child’s car in their name or in the name of their partner, even if the car was their child’s car and not theirs.

If you have your own car, it is important to have your own insurance policy. Otherwise, you and your family could suffer serious consequences.

5. Try black box insurance

Some insurers offer discounts to drivers who install a telematics device – also called a “black box” – in their car.

These devices monitor your driving style to decide the safety of your driving. If you build up a good track record, you can get a discount or even a discount on your premium. But driving badly could lead to a penalty.

  • Learn more:how black box car insurance works

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