MyFinances.co.uk
News feeds Free newsletter

All the latest personal finance news - helping you make the most of your money

Associate Article

Car insurance for under 25 year-olds

Car insurance can be an expensive process for those under 25. With little or no experience to build up a no-claims bonus, a car insurer generally views such candidates as being in the high-risk category and, thus, the premiums are higher and the insurance options can be limited.

Car insurance is offered relatively competitively to those who insure themselves to drive their parents’ car, however it should be remembered that this does not entitle a young driver to any no-claims bonuses – they remain affiliated to the policy of the car owner.

If it is not possible to insure on their parents’ policy, the choice of car for a driver who is under 25, can also negatively affect the price of premium payments. It would be unwise for someone in this age range to purchase a sporty car or one with a large engine, as this automatically increases the potential for accidents, in the eyes of the insurer.

To balance out the increase in risk, the payments will be higher. To counter this, young drivers are well advised to buy smaller and older cars that lessen the potential hazards in terms of accidents or theft. An insurance company is more likely to offer comparatively affordable policies to those whose cars do not present a large financial risk.

It is also a fact that many drivers in this age range, particularly males, can be refused car insurance outright. Statistically, they are much more likely to be involved in accidents, traffic offences and even suffer at the hands of car-theft or vandalism than someone who is older. Young males are also likely to use the car more often and to display aggressive or dangerous driving characteristics when in charge of a car.

Some car insurers do offer policies that specialise in insuring younger and less experienced drivers, but the drivers themselves can also take steps to reduce their premiums. Some organisations offer courses in defensive driving which, when completed, make that driver a less obvious risk and bring costs down.

Some drivers, however, see fit to try and bypass the whole system and drive illegally - without car insurance. Currently, figures suggest that nearly 30% of young drivers have opted for this measure.

Apart from the obvious ramifications, such as a prison sentence or a hefty fine, these drivers are seemingly unaware that if they have an accident whilst uninsured, it has the potential to affect their credit rating, negatively, for up to 10 years after the event, making it harder for them to obtain car insurance and, in later years, means that they will pay higher premiums for loans and mortgages. The resulting criminal record can also limit potential career plans, with employers checking on an individual’s history.

Other factors are also considered when insuring a driver under 25: for example, marital status can affect the price of insurance, with married couples in this age-range being seen as more reliable and less risky drivers. The driver’s location is also important in the assessment of these prices, with higher premiums being offered to those who live in areas where crime is statistically higher than in others.

Ultimately, careful research with different insurance companies provides the best way to find a policy that may be affordable to a driver who is 25 or under. These days it’s possible to get a quick online quote that’s competitive and tailored to your circumstances; Asda Car Insurance for instance will find the best deal from a panel of 20 insurers and the fool.co.uk offer a service in their car insurance section that will search through some 300 prices from a range of insurers.

For more info on car insurance have a look on the Association of British Insurers website.





Disclaimer:
myfinances.co.uk is not authorised to give advice under the Financial Services and Markets Act 2000.

Terms:
By using this site, you are deemed to have accepted our terms of use.

About Us | Advertise | Contact Us | Privacy
© 2004 - 2008 www.myfinances.co.uk

Secured Loans
Secured online loans are often easier to obtain than unsecured loans. Even if you have an adverse credit rating, get details online!