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Why Is Car Insurance For Young Drivers So Expensive?

17 October 2017

As anyone who’s ever had to pay for it will tell you, the cost of car insurance for young and first-time drivers is notoriously high. As of this year, it’s estimated that the average cost of insurance for a 17-20 year old male here in Northern Ireland is an eye-watering £2,430.

That’s a lot of money to anyone and can make it difficult for young people to get on the road, with some people being put off learning to drive altogether by the high cost of insurance.

However, there are many myths and misconceptions about why it is that young driver insurance is so expensive. Below, we explain why younger motorists typically pay more for their insurance and offer advice on what you can do to reduce your costs.

Why is young driver insurance so expensive?

young driver insurance northern ireland

As we’ve explained before, the insurance industry is all about calculating risk. The amount that your insurance provider charges you for your policy can depend on all sorts of different factors, but above all it’ll depend on how likely they think you are to make a claim.

It’s important to stress that this is nothing personal and that insurers are aware that not all young drivers are bad drivers. Unfortunately, the decades’ worth of statistics that insurers base their quotes on all show that drivers under 25 years old are more likely to have an accident than those in any other age group.

Ultimately, this all boils down to experience. Even if you’re the picture of a model motorist from the moment you pass your test, young drivers are on average less experienced and therefore more likely to have an accident. Consequently, they’re therefore more likely to make a claim on their insurance and insurance providers increase the cost to offset this.

The same will apply to any first-time motorist, who will experience much higher insurance costs than someone who’s been driving for a while, regardless of their age. But it’s younger drivers that are hit with the highest costs due to the fact that statistics show they’re riskier on the road overall.

Are young drivers really more likely to have an accident?

first time driver insurance ni

As we’ve stated before, this is by no means indicative of your own abilities as a motorist. Every single one of us is affected by the same statistics in some way, but there is a significant wealth of data which shows that drivers aged between 17 and 24 are more likely to have an accident, and more likely to be killed or seriously injured in a car crash.

According to research from the RAC Foundation one in five young drivers will have a crash within the first six months of driving. Similar data from road safety charity Brake shows that a quarter of 18-24 year olds will crash within two years of passing their driving test.

Here in Northern Ireland, more than a quarter of all people killed on the roads in the past three years were aged between 16 and 24 according to PSNI data. Research also shows that younger drivers are less able to accurately assess hazards due to inexperience, are more likely to engage in high-risk behaviours like speeding and are more likely to be over-confident in their driving abilities than drivers aged 25 and above.

Stats like this go on and on, and even though in Northern Ireland the number of young drivers killed on the roads has decreased in the past few years, people aged between 17-24 still make up a disproportionate number of those killed and seriously injured in car accidents.

This supports the idea that young drivers are overall more at risk than older or more experienced motorists. Insurance providers will then charge younger drivers more for insurance due to the fact that there’s a greater chance they’ll have to pay out for a claim.

So insurance companies are all corrupt and greedy?

cheap young driver insurance

Given that the cost of insurance has risen across the board due to things like last year’s increase in Insurance Premium Tax, it’s understandable that there can be a lot of ill feeling among consumers who feel punished for purchasing insurance rather than rewarded.

Young drivers are among the hardest-hit by this increase, and so between that and the fact that young driver insurance is typically much more expensive, young motorists can have a pretty dim view of insurance providers.

There’s even data to back this up, with one study finding that young drivers’ perception of the insurance industry is that it’s “greedy and corrupt”.

It’s important to stress that this isn’t true. The reason that insurance providers charge young drivers more for their insurance isn’t just due to the fact that they’re more likely to have an accident, but also because the average cost of their claims is much higher than that of the average motorist.

Data from the Association of British Insurers shows that the average cost of a claim for an 18-20 year old is £3,667 – nearly £1,500 more expensive than the average claim for someone aged between 61-65. This is due to the fact that younger drivers are more likely to have more serious accidents, which will result in higher repair bills and more expensive claims for personal injury.

As a result, if insurance providers have to pay out larger amounts more often for younger drivers, it only makes business sense that they’ll have to charge more for insurance in order to offset the costs.

How do I get cheaper car insurance as a young driver?

cheap first time driver insurance

It’s just an unfortunate fact that if you’re under 25 or you’ve just recently passed your test, you’ll have to pay a higher amount than average for your car insurance. However, there are several ways you can mitigate the costs and end up with some pretty significant savings.

Pass Plus

For a start, you could consider taking a Pass Plus course. Although the last thing on many new drivers’ minds will be taking more driving lessons immediately after passing their test, Pass Plus can iron out any bad habits you have and go some ways towards proving that you’re a more responsible driver.

As well as that, Pass Plus will give you more experience driving in all sorts of different situations, and experience is key to reducing the cost of your insurance. It’s important to note, however, that not every insurance provider will give you a discount for having a Pass Plus certificate.

No-Claims Discount

We’ve explained at length before about how everything from your address to the type of car you drive can affect the cost of your insurance, but perhaps the most sure-fire way of reducing insurance costs is to build up your no-claims discount.

For every year you’re insured and don’t make a claim, you earn a year’s no-claims bonus, which will reduce your price when the time comes to renew your policy. The effects can be seen after even one year, but one you’ve racked up a few years’ worth, you could see the cost of your insurance drop dramatically.

Of course, for young drivers this can present a bit of a catch 22. You need experience to reduce your insurance costs, but in order to get experience you have to pay a large amount of money for insurance.

Telematics policies

One way around this is for young drivers to take out a telematics insurance policy, which uses a device to monitor their driving behaviour and which can offer discounted insurance costs in return.

An example of a telematics insurance policy is Autoline’s ChilliDrive app, which uses a small Bluetooth beacon and a smartphone app to monitor acceleration, braking and cornering information and use it to build up a picture of your driving.

ChilliDrive has the advantage over more traditional ‘black box’ style telematics policies in that it doesn’t require a black box to be fitted to your car, which can be expensive, invasive and time-consuming. There’s also no curfews or restrictions on when and where you can go, which young drivers typically tend to dislike.

Best of all, with the ChilliDrive app you can get significant discounts on your car insurance up-front, sometimes of up to £1,500*. For more information on ChilliDrive, you can visit the website or give our team a call on 028 3005 0111.

*Based on 28% of 118 saving over £1,500 between January and August 2015