A teenager's first motor insurance premium can fall from terrifying to modest in a few simple steps.
Pick The Right Car
The key is to purchase a suitable vehicle. Every model has an insurance rating from 1 to 50 - the lower the rating the lower the premium. As a rule, a small car with a modest engine is likely to have a low rating. Remember that every trim – e.g. Ford Fiesta 1.0-litre Zetec – rather than every model – e.g. Fiesta – has its own rating. Fiesta “A” might be cheaper to insure than Fiesta “B”.
Avoid Modifications
A teenager might plan to modify the vehicle with stickers, stereo equipment and lighting. The insurer has to be told about each modification to ensure the policy is valid. The cost implications can be considerable, so it is best to keep the car in factory form.
Shop Around
Premiums vary immensely between insurers so refer to price comparison sites for a fast, comprehensive, overview of the market.
Get Multi-Car Policy
A multi-car policy covers two or more vehicles registered at the same address. Savings can be considerable. Each insured party retains a separate no claims bonus in case the other hits trouble.
Add Named Driver
Adding a named driver to the insurance policy can significantly reduce the premium. Adding a second can help further. It is best to choose experienced, older, motorists with a clean driving licence.
A parent might try to reduce the premium further by wrongly claiming that he/she is the main driver, then adding the teenager as a named. Insurance companies are wise to this “fronting” trick which is considered fraudulent. It can also invalidate the policy.
Earn No Claims Bonus
Earning a no-claims discount is one of the easiest ways to reduce an insurance premium. Some companies enable the motorist to collect a one year bonus in (say) ten months. This might, however, raise the monthly cost so it is best to take a holistic financial view.
Consider Telematics
A telematics insurance policy requires the motorist to have a device installed in the vehicle. It might monitor the time of day it is used, the monthly mileage, and the teenager's driving style.
Such policies tend to be cheaper upfront and – theoretically - reward a sensible driver with lower future premiums. The key is avoid the rush hour when lots of accident happen, and drive safely.
Sit Pass Plus Course
The Pass Plus Course incorporates on road training after the teenager has passed the theory/practical tests. There is no formal exam, but the insurer might offer a discount to the participant.
Raise Excess
The excess is the amount the teenager contributes towards every and all claims. There is typically a compulsory and voluntary element. Raising the latter can significantly reduce the premium.
Limit Mileage
The policy states that the car is covered to travel “x” miles per-annum. If it covers 20,000 the risk is higher than it it covers 5,000. This is reflected in the premium, so ensure the stated figure is not excessive.
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