07 February 2018, 09:15

The ABI says 18-21 year olds spend 10% of their income on car insurance but GoCompare reveal it takes 60% to get them on the road

The ABI suggest 18-21 year olds spend 10% of their income on car insurance premiums. Research from GoCompare has found that it costs nearly 60% of their income to get young drivers on the road in the first place.

  • Cost of getting a young driver on the road is £5,993**
  • Average cheapest annual car insurance premium for an 18 year old is £2,254 p.a.
  • Almost a quarter (24%) of parents help towards the cost of car insurance for their children
  • 60% of parents think that young driver insurance premiums are a ‘rip-off’
  • GoCompare offers its top six tips to help younger drivers keep their premiums down

Research* from GoCompare Car Insurance has revealed that the cost of getting a young driver on the road is £5,993** – nearly 60% of average income for an 18-21 year old - £10,842 p.a.****

The average cheapest car insurance premium for a 18 year old driver is £2,254 p.a. and constitutes over one third of the total ‘new driver’ bill.

Over half (53%) of parents said the cost of car insurance is a major concern with 12% saying that their child has delayed getting a first car specifically because of the cost of insurance. After safety, the cost of car insurance is parents’ biggest concern when their child is learning to drive and 30% said that the cost was far greater than expected. Young drivers and parents are spending on average £3,006 on a first car.

The survey of 1,000 parents revealed that most give their children a significant amount of financial help to get them on the road:

  • Two thirds (66%) said that they have contributed to the cost of driving lessons,
  • 62% have paid or intend to pay towards the cost of a first car for their child,
  • 24% have helped or intend to help with insurance costs,
  • However, 14% said they haven’t given or won’t be giving their child any financial help to get them on the road.

 

Matt Oliver, car insurance spokesperson for Gocompare.com, said: “The cost of car insurance makes up a significant proportion of the cost of getting a young driver on the road and keeping them there.

“While many people feel that young drivers are treated unfairly when it comes to insurance premiums, unfortunately, statistics show that newly qualified drivers are more likely to have an accident. These accidents also tend to be more serious in nature, resulting in more expensive claims - hence the higher premiums.

“But younger drivers can help to lower their insurance premiums by choosing the right car. This can make a big difference as cars with larger engines cost a lot more to insure than basic models with engines of less than 1000cc. Choosing a telematics or ‘black box’ insurance policy, which monitors their driving, will help young drivers prove that they can drive safely which in turn could help to reduce their premium.”

Choose a sensible car - Young drivers’ insurance premiums will be lower if they drive a standard car with a small engine in a low insurance group. It may not be a supercar but it makes sense to drive something smaller and slower until they’ve built up some no claims bonus and have shown a safe driving record. Also, avoid cars with modifications, as they can push the price of insurance up.

Consider opting for a higher excess – This may lower your premium but you will need to decide if paying a lower premium is worth the risk of having to contribute more towards the cost of a claim if you have an accident.

Thought about a ‘telematics’ policy? – Some policies require your car to be fitted with a ‘black box’ transmitter and others do a similar job with a smartphone app. In both cases the idea is that your driving is monitored by the insurer and your premiums can come down faster than with a traditional policy if you prove to be a safe driver.

Added extras – consider whether you really need added extras such as a courtesy car, legal assistance, breakdown cover and key cover. Some policies include these types of cover as standard or as add-ons but they’re not free – the cost will be built into the premium so you may be able to save money by removing them or choosing a different policy without all the bells and whistles.

Adding a safe driver – Adding another named driver with a clean licence and several years’ claim-free driving to a young driver’s policy could reduce their premium. This is one way a parent can help their child to get lower premiums without breaking the law.

Drive safely – By being careful on the road you will avoid accidents, fines and penalty points, all of which will affect your insurance premium.

-ends-

For further information please contact:


Anders Nilsson or Martyn John at GoCompare on 01633 654 054 / 01633 654 725

Gordon, Jason or Liz at MAW Communications on 01603 505 845

Follow GoCompare on Twitter; @GoCompare

Notes to editors:

*Between the 8th and 14th February 2017 One Poll conducted an online survey among 1000 randomly selected British adults with children aged between 17 and 25 who can drive.

**£5,993 figure is based on the following: provisional licence (apply online) £34***; driving lessons (21 lessons at £24** per lesson – Source AA) £504; driving test fees - theory test (weekdays) £23***, practical test (weekdays) £62***; average cost of first car £3,006; car tax (Vehicle Excise Duty) £110 per year** based on a 2012 Vauxhall Corsa 1.2 SXi; one year’s fully comprehensive car insurance £2,254 p.a. based on GoCompare’s average cheapest quote for 18 year olds from the 1st of December 2017 up to and including the 31st January 2018.

***DirectGov,

****Average income for 18-21 year olds taken from the ONS Annual Survey of Hours and Earnings - £10,842 p.a.

About GoCompare

GoCompare is a comparison website that enables people to compare the costs and features of a wide variety of insurance policies, financial products and energy tariffs.

GoCompare does not charge people to use its services, and it does not accept advertising or sponsored listings, so all product comparisons are unbiased. GoCompare makes its money through fees paid by the providers of products that appear on its various comparison services when a customer buys through the site.

GoCompare does not sell its customers’ data.

When it launched in 2006, it was the first comparison site to focus on displaying policy details rather than just listing prices, with the aim of helping people to make better-informed decisions when buying their insurance. GoCompare has remained dedicated to helping people choose the most appropriate products rather than just the cheapest, and has teamed up with Defaqto, the independent financial researcher, to integrate additional policy information into a number of its insurance comparison services. This allows people to compare up to an extra 30 features of cover.

GoCompare is the only comparison website to be invited to join the British Insurance Brokers’ Association (BIBA) and is authorised and regulated by the Financial Conduct Authority (FCA).

For more information visit www.gocompare.com and www.gocomparegroup.com

Contact Information

Gordon Maw

gordon@mawcomms.co.uk