Insurers put brake on life in the fast lane

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The Independent Online
CAR INSURANCE for drivers under 25 years old can often end up costing more than the car itself.

Young drivers are considered poor risks. Direct insurers such as Churchill, Admiral and the Insurance Service concentrate on older, low-risk customers, and usually will not insure under-25s. Admiral may consider over-21s with if they have a no-claims discount.

Young male drivers are considered especially risky, even in a small-engined car, and can pay as much as a third more than female drivers.

Comparing quotes from insurance companies can save hundreds of pounds, as prices vary by up to 67 per cent. Gary Armour, 19, of Lewisham in south-east London, was surprised at the variation between quotes. He saved pounds 250 by shopping around.

OneQuote and Insurance Selection aim to find the cheapest quote on the market for a particular person. Insurance Selection makes its money by charging the customer 25 per cent of the saving made by using the service. OneQuote charges a premium rate for consultations. Direct Line, Colonnade and Eagle Star are direct insurers, and offer only their own policies. The rest of those listed in the table are brokers.

Choosing a low-value vehicle, 1300cc or below, will keep the cost of insurance down. A D-registration Fiesta XR2 costs a staggering pounds 3,300 to insure, fully comprehensive, in the SN2 area. For high-performance vehicles, a company called Hyperformance specialises in high-risk policies.

Another way of cutting costs for a younger driver is to start off with a third-party, fire and theft policy. James Wootton of Insurance Selection says: 'After a couple of years, the driver will have built up an insurance record, and will have gone past that crucial teenage period, which will make him or her more attractive to insurers.'

The quicker the no-claims discount can be built up, the better. OneQuote recommends a special deal from Pegasus, Link or NIG Skandia, where young customers with no no- claims discount are offered a one-year, 30 per cent discount after six months.

Another way to control costs is to opt for a higher excess level. Such companies as Telesure and Swinton have different levels of excess on similar policies, where higher excesses mean lower premiums.

David Walker, financial director of Telesure, says young drivers should try to avoid claiming on their car insurance, as excesses are generally high and they will end up having to pay a large proportion of any claim. It may be more sensible, then, to go for the higher excess, and concentrate on building up the no-claims discount.

Naming a young person as the second driver on a mother's or father's policy is a cheaper option. For policies insuring, say, an 18-year-old on Dad's Volvo 850, Telesure and the AA are particularly competitive. Eagle Star and Direct Line refuse cover.

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