How to reduce premiums if you are a younger driver

John Hearne offers some essential steps which younger drivers can take to help bring their motor insurance down to a more realistic level.

If you’re a young driver, there are three steps that you can take which when taken together can help you reduce your motor premiums by as much as 80%.

Get a full licence

Complete all the required driving lessons and get some named driver experience and get a full licence.

Jonathan Hehir is MD of Coverinaclick, an insurance broker who specialises in insuring young drivers. He points out that the Consumer Price Index released this week showed that the cost of motor insurance actually fell by 11.7% between January 2017 and January 2018.

He says: “But if you speak to any young driver, that is, one under-25 — or their parents — they will tell you that insurers are still looking for big money for these policies. However, speaking to the same young drivers and/or parents has made us realise that people are simply unaware of the extent to which lessons and experience can reduce a premium.

“We believe if people knew how much such measures could help towards reducing their costs, they might be a bit more proactive in applying for their test and so on. Moving from a provisional to a full licence alone can reduce premiums by anywhere from 30% to 80%.”

Hehir points out that one of the key challenges that young drivers face is that today’s market for insurance is extremely uncompetitive.

A driver with a full no claims bonus could have more than 15 insurers ready to quote them. A first time driver will be lucky to get five. In this context, securing a reasonable quote is almost impossible.

The first thing for you to do is to get the ball rolling far in advance of you actually buying your own car.

Go get the theory test, then book your lessons. It is necessary to have completed 12 lessons as part of the process of securing a full licence. However, if you are trying to secure insurance while on a learner permit, you’ll get a better rate the more lessons you have done.

Many insurance firms will advance a discount simply for completing a series of 10 or more lessons.

When it comes to applying for the driving test, all of the test centres around the country have long wait times, so even if you don’t feel at all ready to sit in beside a tester, it’s a good idea to go ahead and book. There’s nothing like a deadline to concentrate the mind.

In most test centres you’ll be waiting around four months for a date, though that does vary — and wildly. The average waiting time at the Sligo test centre is 13 weeks; in Tralee it’s 27.

Check the Road Safety Authority site, rsa.ie for more details. Remember too that if you’re in a hurry to get the test done, you can note that on your application and secure a cancellation.

Currently, the national pass rate stands at 53%, so be prepared for the possibility of not getting it first time round.

Named driver experience

Plan ahead. Getting named driver experience has the single greatest influence the price a young driver will pay.

While most insurers will insist on a full year of this, some providers offer discounts to young drivers who have six months’ experience on their parent’s policy.

Choose car model carefully

Look at the model as well as engine size of the car you intend to buy. Remember that the more expensive your car and the bigger its engine, the more you’re likely to pay.

You may also have to pay more if your car is imported or if there are more theft claims on that particular model. Do not be afraid to ask for quotes for a several different cars.

Check price differences between third party, fire and theft and comprehensive — according to the value of the vehicle.

If you want to teach your teenager to drive, cost out the various alternatives, and note that adding them to your or your spouse’s cover may not always be cheaper than arranging separate cover for them. Remember, many of the insurers who specialise in insuring young drivers are only available through a broker.

Honesty is best policy

Just one important word of warning. ‘Fronting’, as it’s known in the industry, is a practice all the insurance companies are wise to, and it won’t work.

Jonathan Hehir again: “Parents taking out policies on what is essentially their son’s or daughter’s car, in order to get a cheaper premium, is something that has been prevalent in the past.

“But insurers are very strict on this and are taking a zero-tolerance approach. You will not get a quote as a parent on a second car with a young driver named on the policy. However, insurers will accommodate people if they want to name their daughter/son on their main car in order for them to gain some experience.”

Moving from a provisional to a full licence has definite cost cutting benefits. Drivers can save up to 30% on their premiums simply by securing their full licence.

The advent of the N-plate, which is a compulsory disc to be displayed for newly qualified drivers for a period of two years, doesn’t appear to have any impact on insurance costs. No insurer has indicated any changes/or new rates based on the new ‘N’ plate law.

In addition to the particular conditions that relate to young drivers, there are of course the standard ways of reducing car insurance premiums.

The Competition and Consumer Protection Commission (CCPC) says you can lower your premiums by up to 70% if you haven’t made a claim or a claim hasn’t been made against you.

Safe parking cuts insurance

Where you park your car can have a significant impact on how much you pay in premiums. A locked garage trumps the street or the driveway, and of course some areas will have higher claim rates than others.

You will pay higher car insurance if you live in a city than if you live in the country.

Finally, as the CCPC points out, under current equality law, when you buy any goods or services, you can’t be discriminated against because of age, gender, race, marital status, family status, sexuality, disability, religion or lifestyle.

Insurers cannot refuse to cover you, or charge more for any of these reasons — unless they can show that the difference in treatment or charge is reasonable and justified in relation to the risks involved.

For more information on when it would be reasonable for an insurance company to treat you differently, contact the Irish Human Rights and Equality Commission.

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