Insurance Costs For New Drivers: What's The Average?

Car insurance for new drivers can be expensive, with annual insurance premiums averaging around £1,800 for those aged 17-20, and over £1,000 for those aged 21-25. The high cost of insurance for new drivers is due to their lack of experience on the road, which means they are statistically more likely to be involved in an accident. The price of insurance depends on several factors, including age, driving experience, location, and vehicle choice. For example, the average insurance cost for a new driver in London is £3,108, while in other regions of the UK, it can be as low as £1,646. To reduce insurance costs, new drivers can consider adding an experienced named driver to their policy, choosing a car in a low insurance group, or building a no-claims bonus by driving safely and avoiding claims.

Average insurance prices for new drivers

The cost of car insurance for new drivers varies depending on several factors, including age, driving experience, location, vehicle choice, and driving record. On average, car insurance for new drivers in the UK can range from £1,500 to £2,000 per year, with 17-year-olds facing higher premiums, averaging around £2,877. These costs can be significantly higher in certain regions, such as London, where the average insurance cost for new drivers is approximately £3,108.

Age plays a crucial factor in determining insurance prices for new drivers. Younger drivers, especially those between the ages of 17 and 20, are considered high-risk due to their lack of driving experience and are, therefore, subject to higher insurance premiums. The average annual insurance cost for this age group is around £1,800. While insurance for 21 to 25-year-olds is slightly lower, it still averages more than £1,000 per year.

Location is another important consideration. Insurance providers take into account the postcode of where the car is typically parked. Living in a city or an area with a high crime rate can negatively impact insurance costs. Additionally, certain regions in the UK, such as London and the North West, tend to have higher average insurance prices for new drivers.

The choice of vehicle also influences insurance prices. Newer cars generally have lower insurance costs for young drivers, and certain car models, such as BMW and Mercedes-Benz, tend to result in higher insurance premiums. The type of car body also matters, with four-door saloons being the most expensive to insure, while three-door hatchbacks are among the most affordable options.

Furthermore, new drivers can take advantage of various strategies to reduce their insurance costs. Adding an experienced named driver to the policy, such as a parent or older sibling, can help lower premiums. Additionally, new drivers can consider telematics insurance, where driving habits are monitored, and premiums are adjusted based on driving behaviour. Safe driving can lead to significant savings over time. Maintaining a clean driving record and building a no-claims bonus are also effective ways to reduce insurance costs.

How location impacts insurance costs

The cost of car insurance for new drivers varies greatly, and location is a major factor in these cost differences. Car insurance companies use a complex set of calculations to evaluate the risk each driver presents, and location is a significant factor in these calculations.

State laws and regulations

State laws can influence the cost of insurance in several ways. Each state has its own laws and regulations related to car insurance, including minimum insurance requirements that drivers must meet. For example, some states require drivers to carry liability insurance, while others mandate personal injury protection (PIP) coverage. The higher a state's liability car insurance requirements, the higher the premiums will be. Additionally, some states have laws that limit the factors insurance companies can use to calculate premiums, while others have programs to help high-risk drivers obtain insurance.

Population density and accident frequency

Living in a densely populated urban area increases the risk of car accidents due to higher traffic volume. As a result, insurance companies often quote higher premiums in these areas. Conversely, rural areas with lower traffic volumes typically have lower insurance rates. However, rural areas may present other risks, such as a higher likelihood of animal collisions.

Crime rates and vehicle crimes

Locations with higher crime rates, including vehicle crimes such as theft and vandalism, often result in higher insurance premiums. Insurance companies consider the frequency of theft, vandalism, and accidents when calculating rates. If your ZIP code has a high number of insurance claims, insurers may designate it as high risk and increase premiums to offset potential costs.

Weather and road conditions

Harsh weather conditions, such as heavy rain, hail, snow, and flooding, can increase the likelihood of accidents and lead to higher insurance rates. Additionally, areas with roadways in poor condition or dangerous intersections can contribute to higher accident rates and insurance costs.

Cost of living and healthcare costs

The cost of living and healthcare costs in a particular location can also impact insurance premiums. For example, cities with higher costs of living tend to have higher insurance claims and premiums.

In summary, location significantly influences car insurance costs for new drivers due to various factors, including state regulations, population density, crime rates, weather conditions, and local costs. These factors collectively contribute to the calculation of insurance premiums, making location an essential consideration when determining the cost of car insurance for new drivers.

Telematics insurance and black box insurance

Car insurance for new drivers can be very expensive, with annual insurance premiums averaging around £1,800 for 17–20-year-olds and over £1,000 for 21–25-year-olds. The high cost of insurance for new drivers is due to their lack of experience on the road, making them more likely to be involved in an accident.

Black box insurance can be significantly cheaper than insurance cover without a black box, and it still offers all the benefits of standard comprehensive cover. As a young or new driver, you may be willing to accept some minor restrictions that come with a black box for the benefit of cheaper insurance. After twelve months of claim-free driving, you can qualify for a no-claims discount, which can lower your insurance premiums by a significant amount.

It's important to note that driving at night or during unsociable hours can sometimes affect your premiums with black box insurance, as insurers may deem this to be riskier due to poor visibility. Additionally, driving fewer miles can help reduce your premiums, as the more miles you drive, the more likely you are to be involved in an accident.

While telematics insurance is commonly associated with black boxes, there are several types of car insurance based on monitoring. You can also find it as a mobile phone app that uses GPS to monitor your driving habits or as a self-install plug-in device.

Additional policies and their costs

The cost of car insurance for new drivers varies depending on several factors, including age, driving experience, location, and vehicle choice. On average, annual insurance premiums for new drivers range from £1,500 to £2,000 in the UK, with 17-year-olds facing higher premiums, averaging around £2,877. In some cases, annual policies for new drivers can cost well over £2,000.

When it comes to additional policies and their costs, there are a few things to consider. Firstly, let's understand the different types of additional drivers:

• Primary driver: The primary driver is the main policyholder and the individual who primarily operates the insured vehicle. Insurance premiums are based on the primary driver's age, driving history, and other relevant factors.
• Secondary driver: A secondary driver is someone who occasionally operates the insured vehicle but is not the primary user. Adding a secondary driver to your policy can either increase or decrease your premium, depending on their age, driving experience, and driving record. For example, adding a less experienced driver, such as a teenager, to your policy can significantly increase your premium. On the other hand, adding an experienced driver with a clean record typically does not increase the cost.
• Occasional driver: An occasional driver is someone who drives your car infrequently or for one-off trips. In most cases, you don't need to add them to your policy, as insurance policies usually have "`permissive use`" clauses that cover occasional drivers. However, if this becomes a regular occurrence, it is advisable to add them to your policy.

Now, let's discuss the costs associated with adding additional drivers to your policy:

• Costs for adding a secondary driver: The cost of adding a secondary driver depends on their age, driving experience, and driving record. For example, adding a teenager or a new driver under the age of 25 to your policy can result in a significant increase in your premium, with annual costs ranging from $6,000 to $10,000 in some cases. In Ontario, adding an experienced driver can cost an additional $200 per month on average.
• Costs for adding an occasional driver: As mentioned earlier, in most cases, you don't need to incur additional costs for occasional drivers as they are usually covered under "permissive use." However, if you plan to add an occasional driver to your policy, the costs will depend on the same factors as a secondary driver – age, experience, and driving record.

It's important to note that the exact costs for adding additional drivers will vary depending on your insurance provider and your location. It's always a good idea to contact your insurance company and discuss your specific situation to get an accurate quote. Additionally, there are other factors besides additional drivers that can impact your insurance costs, such as your driving record, mileage, location, and vehicle choice.

Tips to reduce insurance costs

Car insurance for new drivers is expensive, with annual policies in the UK ranging from £1,500 to £2,000 per year, and premiums for 17-year-olds averaging around £2,877. This is because new drivers are deemed to be a higher risk, with a higher probability of being involved in an accident. However, there are several ways to reduce insurance costs:

Choose a car in a low insurance group

Cars are ranked by insurers in groups from 1 to 50, with those in group 1 being the cheapest to insure. Opting for a more modest car with a smaller engine will help to get cheaper insurance.

Add a parent or experienced driver to your policy

Adding an older and more experienced driver to your policy can help to lower your premiums. Insurance companies view this as a risk-mitigating factor, assuming the experienced driver will spend some time behind the wheel. However, it is important to be honest about who the main driver is, as 'fronting' (falsely claiming that an experienced driver is the main user) is illegal.

Choose a higher excess

When getting a quote, you will be asked to decide on an excess – the amount you are willing to pay towards a repair in the event of a claim. A higher voluntary excess will result in a lower overall premium, but make sure you can afford to pay out if you need to.

Consider black box/telematics insurance

Black box insurance involves fitting a device to your car to monitor your driving. If you prove you're a safe driver, your insurance costs will decrease. However, if your driving is deemed unsafe, your premiums will increase.

Reduce your mileage

The more miles you drive, the more likely you are to be involved in an accident, so insurers will quote a higher premium. Driving fewer miles will help to reduce your premium, and you may even qualify for a low-mileage discount.

Pay upfront for the year

Paying your insurance annually rather than monthly is often more cost-effective, as insurers typically charge interest on top of monthly premiums. Paying upfront can save you money and may even qualify you for additional discounts.

Frequently asked questions