These five loopholes, statistical anomalies and tips will be particularly useful for young drivers, but older drivers may be able to benefit from them as well.
Most of you will already be paying too much for your car insurance, which means there's no reason to pay any more. However, young drivers have had it a little easy for the past few years. The Association of British Insurers (ABI) said yesterday that, although the total number of deaths on UK roads has fallen in recent years, the number of fatalities involving young drivers is still rising. So, young men and women, if you think your car insurance seems expensive now, just you wait!
Don't fear though! There are various initiatives and campaigns that the ABI is working on, such as better alternatives to the Pass Plus driving course and, more drastically, Californian-style curfews for young drivers, all of which could massively reduce your premiums. In the meantime though, you should be able to at least maintain the status quo by comparing car insurance quotes, and perhaps you could end up paying even less using the following five tips. (These may help you oldies reduce your insurance costs too.)
1. Go comprehensive; it's cheaper
Norwich Union recently stated that it's going to increase its car insurance prices by as much as 40% for younger drivers (see Car Insurance Costs Set To Jump). However, there's a neat little trick which might work wonders on the cost of your cover. If you usually get third party, fire and theft, ask Norwich Union for a quote on comprehensive insurance. The whacky reason for this? Sometimes it's cheaper!
You see, insurance prices are based purely on statistics. That's why insurers can get away with prejudicial pricing. After all, in what other industry can you say you're going to charge men more than women for the same product?
Statistics often show that people who drive cheap old cars (particularly young drivers) don't seem to care much about crashing them, so they have more accidents. It's the damage to other cars and, particularly, the injuries caused to others that cost the insurers so much money. On the other hand, if you have comprehensive insurance you're statistically less likely to be in an expensive accident. That's why some insurers (Norwich Union being the most notorious within the industry) sometimes end up quoting cheaper comprehensive cover than third party, fire and theft!
2. Modifications
If you don't want to pay a fortune on your insurance, don't get a modified car or you'll immediately find that half the insurers won't bother quoting for you. Fewer quotes means less competition, which means there's less reason to lower their quotes.
Statistically, a driver of a modified vehicle is more likely to be involved in an accident, or a more costly accident. I'm not just talking about improvements that affect performance either: even painting Go Faster Stripes will cost you more, as you're more likely to claim. You can't argue with statistics!
3. It's not all about the size of your.engine
We all know that size does count. However it's not just the engine size but the weight of the vehicle that matters. If your car has a big engine and is light, then it's going to go fast. Insurers don't like young drivers with nippy cars and they price their quotes accordingly.
4. Is the Pass Plus course actually worth it?
I'm tempted to say don't bother doing the Pass Plus course. It involves taking some extra lessons to improve your driving for about £130. However, young, first-year drivers who do this course have virtually the same number of accidents as other young drivers. The ABI recently found that drivers who have done the Pass Plus course have a 19% chance of being in an accident in their first year of driving, but drivers who haven't had only a slightly greater chance, at 20%. On this basis, it's unlikely that insurers will continue to offer significant Pass Plus discounts.
Before taking the Pass Plus, weigh up the costs and benefits. Compare quotes without the Pass Plus and then with it. You may find that one insurer will give you a 30% discount if you completed the extra course, but their overall quote could still easily be hundreds of pounds more than the cheapest provider. For example, it's not unusual for one insurer to quote £900 for a young, first-year driver and another insurer to quote £4,000, with the other insurers in between!
Some councils give grants on a first-come, first-served basis for Pass Plus students, although when they catch on to the ABI statistics they may stop doing this.
5. Delegated-authority schemes
If you walk into a broker with your best quote and you dazzle them with how sensible you are, they may feel inclined to beat that quote by placing you on what's called a 'delegated-authority' scheme. This is when an insurer says to the broker: 'We trust your judgement, so you can choose the premium yourselves. Just don't quote below this amount.' 'This amount' can often be a lot less than standard quotes.
There are delegated-authority schemes for all sorts of profiles, such as mature drivers with sensible cars and for women drivers. At least one insurer offers a delegated-authority scheme for young drivers. Just don't expect to get it if you have a nippy car with Go Faster Stripes!
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