A Guide to Student Car Insurance

Finances are notoriously tight for most students – and so finding car insurance at the right price is crucial.

Unfortunately, young drivers, including students, are hit hard by car insurance providers – according to a comparison website, motorists under the age of 25 pay 22 per cent of the total car insurance premiums in the UK despite making up just 7 per cent of the market. So what causes premiums to be so high and how can you drive your costs down?

Insurers price their car insurance premiums based on risk and take a number of factors into account – from your personal circumstances; to the vehicle you drive; to your address. The higher the risk you are deemed to pose – i.e. the higher the likelihood that you will make a claim – the higher your car insurance premiums will be.

Students pay for the reputation of their peers as young drivers are statistically much more likely to be involved in an accident than more experienced motorists. According to the Association of British Insurers, 500,000 people under the age of 25 pass their driving test each year and a fifth of them has an accident within six months of qualifying. Furthermore, while the overall figure for deaths on the road in the UK has fallen consistently since the mid-1990s, more young drivers aged 16-19 are killed today than 15 years ago.

These statistics affect young drivers regardless of whether they are students or not – however, as a group, students may even be deemed to be at greater risk of making a claim than other young drivers. This is because many University towns and cities have high car crime rates – and using a car on campus can push premiums up further.

Despite the fact that young drivers pay more on average than older drivers, there are still ways for students to bring their car insurance costs down.

Firstly, if you’re yet to buy a car think carefully about the choice you make as the vehicle you drive will greatly influence your premiums. Newer cars, for example, are more costly to insure because they have higher values and are therefore most expensive to replace in the event of a theft or write-off. Performance cars are also more expensive to insure as they are more likely to be involved in a high speed accident which would force the insurer to make a larger payout. So, ideally, choose an older car with a small engine – of no more than 1200cc. Also stick to a standard specification and don’t be tempted to modify the vehicle, as modifications can also push premiums up.

Then think about the level of cover you need. There are three choices available:

• Third party only: This covers liability for injuries and damage suffered by third parties including passengers; as well as liability for towing a caravan or trailer.

• Third party, fire and theft: Traditional third party cover but with the addition of protection for your own car against fire, theft or attempted theft.

• Comprehensive cover: All the protection offered by third party, fire and theft cover; plus comprehensive cover will normally cover the cost of repairs to your own vehicle after an accident, subject to exclusions. Comprehensive policies differ widely between insurers and there may be a host of cover options available including medical expenses, personal effects and windscreen cover.

Think carefully about which level of cover is right for you. If you drive an old vehicle that was relatively inexpensive, for example, then you may decide a third party policy is sufficient – premiums on a comprehensive policy could cost even more annually than the car itself is worth.

Once you have decided how much cover you want, use a comparison website to compare the deals available. These websites can compare deals from more than 100 insurers giving you an overview of the market and more peace of mind that you’re choosing a competitive deal.

Reducing the risk you pose to an insurer will help reduce your premiums. Here are some tips:

• Agree to a mileage limit: If you only drive a limited number of miles each year – such as if you only drive during term time – then inform your insurer and you may be able to reduce your premiums.

• Increase your vehicle’s security: Fitting alarms, immobilisers and tracking devices that have been recommended by an insurer could earn you a discount.

• Park safely: Many students leave their cars on the street at night. Use a garage if one is available – if not, then at least park in a well-lit area.

• Rapid bonus: If you’re in your first year of motoring, look for rapid bonus schemes that allow you to earn a full year’s no-claims discount in less than 12 months.

• Take an advanced driving course: New drivers can take the Pass Plus course which could save as much as 35 per cent on car insurance premiums during their first year of driving.