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Car Insurance Cheats for the Cash-strapped New Driver

February 3, 2014

As part of our beginner’s guide to motoring the Car Loan Warehouse presents your guide to cheaper insurance, aimed toward new drivers who just Car insurance is a must, not only does it protect you from the cost of repairs to someone else’s car when you’re responsible for an accident, but it is the law – you cannot legally drive on UK roads without insurance. So here’s some tips to keep your insurance premiums as low as can be, from picking the correct car to driving carefully and black boxes.

Here are your quick links to the rest of the guide:

Pass plus

The first thing to mention has to be Pass Plus – some insurance companies will actually credit you with an extra year’s no claims bonus! Great for new drivers who’ve never got the chance to earn no-claims before, and with it costing only £100 – £150 to complete for £200-£400 discount who could say no?

Companies offering pass plus discount include:

  • Admiral
  • Churchill
  • Co-operative
  • Direct Line
  • Guardian,
  • Highway Motor Policies at Lloyd’s
  • Norwich Union
  • Pearl
  • Privilege
  • Royal SunAlliance 

Top tips for cheap insurance

Car size

Choosing a luxury car or one with a high-powered engine is pretty much shooting yourself in the foot before you’ve started when it comes to insurance – you’re asking for a high insurance premium. The Car Loan warehouse recommends buying a car with a smaller engine, picking the standard model and also picking a car with no aftermarket modifications – stock is always cheaper, and that’s all we’re interested in for the first year. A 3 or 5 door hatchback with a 1L engine or a car in a lower insurance group would be ideal for a cheap first car to insure.

Car value

Typically the lower the value of your car, the cheaper your insurance will be. Don’t look for the nicest, coolest most expensive car you can find – even if it’s a fraction of the sticker price, the insurance will still cost a bomb. Stick to a reliable, looked-after used car and you’ll be able to build up a couple of years no claims before you move to something a bit cooler.

Car modifications and insurance

We strongly suggest you do not pimp-your-ride. Or at least, not yet. Modifications which increase the performance of your vehicle will directly affect your insurance price. By avoiding changes to the engine and lowered suspensions you can usually keep your premiums low, but make sure you check with your insurer before adding anything. You can also invalidate your insurance by not reporting any modifications for your insurance provider – so don’t try and pull the wool over their eyes as it will only come back and bite you when you do have an accident and your insurance refuses tp pay out – meaning you’ve got to sell that big exhaust and spoiler just to pay for repairs on the car you damaged!

Type of insurance

Third party fire and theft. It’s all you’ve got to know. Third party is the minimum cover you can legally drive with, and you’ll thank us for pointing that out – If you stuck with our advice and bought a reliable banger, this will be acceptable cover for your vehicle.

Third party cover protects you against damage to other people’s property or injuries you may cause them, and as the name suggests against loss or damage to your own vehicle caused through fire or theft. This type of insurance is cheaper because it does not cover accidental damage to your own vehicle, great if you bought a used car you don’t mind scuffing or scratching – and the savings really do speak for them self, try changing you type of quote you look around for to third party fire and theft and see your insurance quotes drop by some quite large amounts!

Bare basics

As well as choosing third party cover you can also knock off any optional extras – like windscreen or legal cover – these options don’t cost much as it is, but if you’re really looking for the most basic insurance for the cheapest price then opting-out of all of these little extras can add up to a little chunk of cash after the year.

Keep a clean licence

You should be doing this anyway, but if not breaking our laws wasn’t reason enough then you’ll be happy to know that having a clean licence will save you money on your insurance – Any points of convictions relating to dangerous driving will massively affect your yearly premium and a young driver with these types of convictions will struggle to find any companies who’ll insure them – and when they do they’ll be quoted hundreds of thousands to price them out of the market. Take a look at this poor guy who got quoted yearly premium of £1.2million!

If you do manage to stay accident and claim free for the entire year you’ll be rewarded with a no claims bonus discount for the previous years of driving safely – usually to a maximum of 5 years. Some insurers even have special deals where a telemetry box (like an aeroplanes black box) records your driving style and reports back to the insurance companies who give you cheaper cover if you drive safely! (Or charge more if you drive unsafely – beware angry drivers!)

Choose named drivers carefully

When your parents try to add you to their insurance they’ll quickly change their minds once they look into it – you being the highest risk driver will make their insurance cost fly through the roof. But when the shoe is on the other foot, you may get yourself a nice little deal. Keep your eyes out for insurers who allow you to add extra drivers for no charge, if they do, try adding your parents to your own insurance, since they’re lower risk they’ll not cause any increase to your policy and everybody likes to get something for free!

Keep the mileage  low

This one is easy – the less you drive, the less risk there is of you being in an accident, so insurers reflect this in the cost of your renewal. It’s only fair that if you drive less then you pay less.

Pay in full

We know this isn’t an option for everyone – especially with young people’s insurance often hitting 4 figures, but if you’re lucky enough to have the option of paying in full then you should do it, you’ll have no monthly payments to think about each month and you’ll get a discount from the insurance companies for paying up front.

About The Author

Jon Le Roux is co-founder and company director of The Car Loan Warehouse. Being a mad engineering and motorsport enthusiast, I spend more hours than is healthy, watching, reading or talking about cars, boats, motorbikes…..basically anything with an engine.