Car insurance is expensive. This is not new, but in 2012 we face some of the highest premiums ever, especially for younger drivers. Insurance premiums can actually account for almost a fifth of a young driver’s annual income, which is fairly shocking. According to data from the comparison site confused.com and Tower Watson, drivers aged 17 to 20 pay now an average of £2,499 per year – while their average salary is £13,972.
On the other end of the spectrum drivers aged 71-plus pay only £436 per year. Although they might have slower reactions due to their age, pensioners pose statistically a lower risk because they travel shorter distances and usually own less-powered vehicles.
The age group of 36 to 40-year-olds is the cheapest to insure with an annual fee of £597. But average costs rise again for 46 to 50- year-old drivers who pay £733 per year.
The amount each age group has to pay is calculated on the statistical risk, the value of the new car, experience level of the driver, past history and where they live, among other factors. Here are some tips on how you can save some pounds on your car insurance.
Don’t accept a renewal quote or automatically renew your insurance. Customer loyalty in the insurance business is worth almost nothing. But most insurers offer big discounts to new customers, sometimes they charge half the price of what they bill existing customers for exactly the same cover. You might even want to apply as a new costumer to your existing insurer to see the difference in costs. It’s definitely worth to shop around at insurance comparison sites. But make sure to check out several sites as they don’t all cover the same providers.
Don’t claim on small amounts
Try not to make small claims –anything below £500 – as they might drive up your premium for the following year’s insurance. In the worst-case scenario, an insurer might not cover you at all if you made several small claims within the same year. It’s better to pay for small damage yourself as it might be cheaper than paying a higher premium.
Don’t pimp your car
Almost half of all providers won’t insure a significantly tuned or customised car, and those that do charge extra. Young drivers could save up to £300 by not pimping their ride. And anyone over the age of 18 shouldn’t excessively modify their car anyway.
Don’t lie on the insurance form
People who live on the countryside might be paying less in premiums than drivers in cities. But don’t be tempted to use your parent’s address in the countryside. Insurers try hard to get around paying claims and if they find out that you lied on your forms, they will declare your insurance completely invalid. This way you will end up paying more than you would have for the premium in the first place.
Add a parent/another driver
Interestingly, adding another driver or a parent in case you still live at home will reduce the total premium. This works especially if the other driver has a clean, safe record. For drivers between the age of 17 and 20, this might reduce the costs by a whopping £1000.