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Young drivers and insurance - The Facts

Introduction

It makes sense that young drivers pay more for car insurance. After all, Government statistics show they are five times more likely to crash in their first 250 miles of motoring and that one in five young drivers have an accident in their first year of driving

Despite this, there's a real risk youngsters are being pushed into less-safe cars, and that they're increasingly risking driving without insurance because they cannot afford to pay high premiums.

A recent survey by Flux Insurance has picked out the 10 cheapest cars for which newly licensed drivers can get cover - but all of them have sparse safety provisions, particularly the older, cheaper models that are more likely to be within a younger person's price range.

In addition, Government figures suggest that one in 20 people are driving without insurance in this country - but when the small fines for those caught for this offence are less than the premiums demanded by the insurance companies for young drivers, that seems less of a surprise.

Is cheap insurance safe?

Flux Insurance's survey revealed that a classic Volkswagen Beetle of up to 1600cc, built long before the introduction of many of today's safety features such as airbags and side impact protection, is by far the cheapest car for a 17-year-old driver to insure for third party, fire and theft cover. Flux says it will insure a man for £932 per year and a woman for £714 per year in an old-shape Beetle, some way cheaper than the next-cheapest, a 1.0-litre Vauxhall Corsa, which costs £1320 for a man and £1052 for a woman.

They are joined on the list by other cars with sub-1.0-litre engines, such as the Peugeot 106, Fiat Panda, Austin Mini, Fiat Uno, Citroen AX, Peugeot 205, Renault 5 and Vauxhall Agila.

While the safety provisions on these cars vary enormously, and especially according to the age of the vehicle, only the latest versions of the cars still in production today record top-level Euro NCAP crash-test ratings.

Corsas built from 2006 onwards, for instance, record five stars for adult protection today, but the 1997 model records just two stars, and the 2000 model three stars.

It could be argued, then, that the insurance premiums are actually putting young drivers at greater risk of death or injury because they have to drive less-safe cars to afford those premiums.

It could also contribute to the fact that a disproportionate number of road deaths are people aged 17-21. The Association of British Insurers (ABI) claims that 17-19-year-old motorists are 10 times more likely to be killed on the road than drivers in the 40-59 age bracket.

The problem of uninsured drivers

Despite a raft of government measures to combat the issues of motorists who drive without insurance, the problem persists.

Government estimates from 2004, when the Greenaway Report into the problem of uninsured drivers was written, suggest one million drivers don't have insurance. These drivers are 10 times more likely than insured drivers to have been convicted of drink-driving, six times more likely to have been convicted of driving an unsafe vehicle, and three times more likely to have been convicted of driving without due care and attention.

So young drivers are faced with a dilemma: do they pay sky-high insurance premiums or take the risk of driving when uninsured and receiving relatively low fines and penalties if they are caught? While driving without insurance can never be condoned, it's not hard to understand why so many young drivers are tempted.

The ABI claims that the way insurance works promotes safer driving, noting that high premium prices 'create an incentive to drive lower-risk cars' and that the no-claims bonus scheme 'can lead to a substantial reduction in premiums' if drivers take care while on the roads.

The ABI also notes that the Government's crackdown and threat of increased penalty points, fines and confiscating cars in the past two years should act as a deterrent to motorists driving without insurance and hopefully change attitudes among them.

That's all very well in theory, but in practice, young people are still statistically more likely to be in a crash, and safer cars are still outside their financial grasp.

So what do you drive?

It's a delicate balancing act between competing motivations when you are choosing your first car - affordability competes with style and safety as priorities.

However, even on a meagre budget you can have all three. These, in order of purchase cost, are whatcar.com's recommendations:

Nissan Micra
The 1.0-litre three-door is no looker, but one with 80,000 miles on the clock can be bought for around £1200, and the Micra falls into insurance group three (expect to pay £360-£1000 third party). Post-1995 models come with a driver's airbag.

Ford Fiesta
A 1999 1.25-litre LX three-door will cost around £2000 with 60,000 miles on the clock. It has a zingy engine, handles well and lies in insurance bracket six (expect £450-£1200).

Nissan Almera
The Almera has all the benefits of modern safety standards (it got a four-star NCAP rating) at a bargain price of around £2700 with 50,000 miles on the clock. It's in insurance group five (expect £450-£800), too, even with its larger 1.5-litre engine.

Fiat Punto
Three-year-old 1.2-litre models with 15,000 miles on the clock cost about £4000. They fall into insurance group three (expect £380-£1200) and boast a bit of Italian style with few of the reliability worries.

Toyota Yaris
The Yaris is perky, reliable and costs around £5500 with very few miles on the clock. The 1.0-litre car is in insurance group two (expect £380-£1200).

Ford Focus
Distinctive exterior, stylish interior and superb handling - you could have a four-year-old 1.4 LX three-door for around £6000. It's in insurance group four (expect £500-£1400).

Mercedes A-Class
For £6500 for an A140 Classic with around 20,000 miles on the clock, you can turn a few heads with this economical car. It is in insurance group six (expect £500-£1500).

Citroen C2
Look for discounts, because there are some great offers out there that could put a brand-new 1.1-litre Furio on your drive for around £7000. At insurance group one (expect £380-£1500), it's in the lowest bracket here.

Skoda Fabia
The Fabia is a good drive and has plenty of space inside. It's also less than £8000 new and the 1.2-litre Ambiente model in is insurance group two (expect £380-£1200).

Mini One
You may need Mum and Dad to stump up some of the £10,000 required to get one of these with less than 10,000 miles on the clock, but you won't be disappointed with the handling, engine or group-five (expect £550-£1800) insurance deals.

How to cut insurance costs

Teenagers complain about insurance premiums that are higher than the value of their car, but there are things you can do to help lower the cost:

  • Shop around. There are numerous insurers out there, so take time to find the best one for you. Price comparison sites such as confused.com or gocomapare.com are a good starting point, but there's no harm in directly approaching the insurer they recommend afterwards.
  • Try specialist insurers such as www.youngmarmalade.co.uk (tel 0845 223 9080) or Aviva (tel 0800 092 9564) 'Pay-as-you-drive' scheme (click here for more information), which uses GPS to track your car. Premiums are then calculated on how often you drive, where you drive and at what time of the day.
  • Take an advanced driving test such as the Pass Plus certificate (www.passplus.org.uk), which can earn a discount of up to 25%.
  • Limit your mileage. Agreeing to cover less than 5000 miles a year can save you around 10% of the insurance cost.
  • If you join a high-profile car owners' club you will often be eligible for preferential insurance rates, saving up to 15% on standard premiums.
  • Look around for offers of free insurance with new cars, which manufacturers often give as a sales incentive. Be sure you can afford to pay the premiums in year-two, though.
  • Fit approved alarms and security devices for typical savings of around 5%.
  • Parking your car off the road or in a garage will often net a discount of 5-10%.