Young drivers pay dearly for car insurance

Young drivers pay dearly for car insurance
About this post

Driving alone for the first time can be daunting, as can the cost to insure your car if you've got P-plates. That's because car insurance providers base their quotes on the likelihood of you making a claim and assume that the less driving experience you have, the greater your risk of an accident.

For young drivers who are seen as high risk behind the wheel, insurance premiums can be sky high. For instance, a 20 year-old driving a 2010 Holden Barina could expect to pay anywhere from $1000 to $2500 ayear for comprehensive car insurance, according to RateCity research.

Of course there are a number of things that young drivers can do to ensure you get the best available price on the cover you need. Adding an older, more experienced driver to your policy as a named driver may be a legitimate way of lowering the cost of cover.

But having a parent or older relative 'front' the policy to lower the cost of car insurance is not allowed. Fronting is when someone registers themselves as the main driver on a policy to reduce premiums when their child or other less-experienced driver is the genuine main driver of the vehicle.

Policies found to be fronted may be rejected at the time of making a claim or worse; voided, leaving the driver uninsured and seriously out of pocket particularly if the vehicle you hit is a Ferrari!

Do it the right way

There are legitimate ways to reduce the cost of your comprehensive car insurance premium and the easiest way is to compare car insurance policies online to find the most suitable cover for you at the best price.

Paying a premium upfront in one lump sum as opposed to monthly instalments can significantly reduce your outlay, depending on the insurer. As can reducing the amount of options on the policy, while adjusting the amount of excess paid at claim time may alter the premium.

Adding a security system and parking your car in a locked garage at night will reduce your risk of claiming in your insurer's eyes, which will be reflected in cheaper premiums.

Related links:

This is an information service. By browsing on the website and/or using our search tools, you are asking RateCity to provide you with information about products from multiple financial institutions. We will try to show you a range of products in response to your request for information. The search results do not include all providers and may not compare all features relevant to you, for further details refer to our FSCG. The rating shown is only one factor to take into account when considering these products. We are not a credit provider, and in giving you product information we are not making any suggestion or recommendation to you about a particular credit product. If you decide to apply for a product, you will deal directly with a financial institution, and not with RateCity. Rates and product information should be confirmed with the relevant financial institution, and you should review the PDS before you decide to purchase. See our terms of use for further details. This advice is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you.