How young drivers can save on their car insurance

Insurers love smaller engines and lower passenger capacity / Photo: ALAMY

 

• Young drivers don't need to pay a fortune for insurance - as long as they follow some simple rules

Many young people are facing what feels like the impossible compromise. I'm not talking about the course they choose, the place they live or how narrow their trousers are. I mean the car they drive. Many will be searching for the holy grail of money-saving motoring.

I say this because in so many ways cars for young drivers are the trickiest purchase of all, uniting a raft of opposing forces. They should be cheap to buy but still reliable. And they need to be safe but small, to keep insurance affordable. At the same time, no self-respecting teenager wants to be sniggered at for being uncool or to have to scrap a car because it's gone wrong.

Malcolm Tarling from the Association of British Insurers (ABI) told me: "Any young driver should look at lowering the capacity of the engine. The lower that is, the better the risk as far as an insurer goes." With that as a starting point, let's consider cars. Warranty Direct's Reliability Index rates the Honda Jazz as Britain's most dependable car overall, with other small models in the top 10 including the Suzuki Alto, Toyota Yaris and Vauxhall Agila.

While worthy, the Alto and Agila will probably cause some mirth in the students' union, so let's discount them. A budget of £500 will get you a 12-year-old, high-mileage hatchback such as the Ford Fiesta. Look away from the obvious, too, and consider the Skoda Fabia or Seat Ibiza in place of the more popular - and expensive - Volkswagen Polo they're based on.

There's also a very good reason for considering an even smaller car such as the Fiat Panda, Ford Ka and Seat Arosa. All rate as very good in the Reliability Index. If they do go wrong, they tend to be cheap to fix because they're relatively simple.

They're reasonably safe too; all of the above earned three or four stars in the benchmark Euro NCAP crash tests. But the big reason for choosing a city car is because they have four rather than five seats, which brings us on to insurance.

The reason the cost of cover is so high for young drivers is that they're more likely than other drivers to be involved in a serious personal claim. "The payout could be more than £500,000," Tarling said. "Young drivers are more likely to have a car full of peers, so one driver's mistake could lead to four or five payouts for serious injuries." Limit the number of people they can carry and you limit the amount they're liable for, in turn reducing the premium.

But we're still talking big money. To help keep costs down, the ABI had two suggestions: insurance that relies on a telematics "black box", and specific cover for students. To see which was cheaper, I invented a fictional male student who will be starting at Leeds University. He's 19, has been driving for two years with a clean licence, has two years' No Claims Discount and drives a 2001 Skoda Fabia 1.4 that cost £600.

I received a quote of £1,300 for regular cover with Direct Line. However, with its telematics-based DriverPlus scheme the sum is reduce to £975. I then tried student specialist Endsleigh. Surprisingy, it was cheaper still, quoting £642.

Of course the car is a vital part of this package, but my fictional student would save more than the price of that car simply by shopping around for the obligatory insurance.




Source: The Telegraph