Young drivers offered a way out of bumper bills for cover

They're not all boy racers, so some insurers are making motoring more affordable

The kids, it seems, are all right.

After years of giving young drivers little option but to fork out hundreds if not thousands of pounds a year for car cover, some insurers are changing direction and taking a more flexible approach. There are policies now, for example, that financially reward drivers for avoiding the road at night or steering clear of "higher risk" urban streets.

As the average cost of car insurance rises for the second three-month period in succession, according to the AA British Premium Index, those hit hardest by premium increases tend to be young drivers. And that's if they can get cover at all, as some providers now refuse outright to insure motorists aged under 21 because of the statistical likelihood of young people being involved in a crash.

One in eight drivers are 25 or under, yet this group accounts for a quarter of all road fatalities, says Brake, the national road-safety body.

"Young male drivers often find it particularly hard to get competitive motor insurance," says Peter Gerrard from the price-comparison service Money-supermarket.com. "As a high-risk group, the average 18-year-old male can expect to pay well over £1,000 a year."

With costs at this level, some young people may be tempted to go without cover - a huge industry concern, given the problems of compensation claims and dangerous driving already posed by the million uninsured motorists on Britain's roads.

The new, more affordable car cover for young adults is part of an effort to counter this - and a shift towards recognition that not all young drivers are high risk.

In August, More Th>n brought out DriveTime, a policy designed to encourage 18- to 25-year-olds not to drive between 11pm and 6am - when they are statistically most likely to have an accident. With DriveTime, a box is fitted for free under the dashboard; this uses satellite technology to track the time of day or night when the vehicle is being used. More Th>n says young drivers can save up to 40 per cent if theydon't go out at night. But if they use their car between 11pm and 6am, they will be charged an extra £25 fee.

Norwich Union has launched a Pay As You Drive insurance scheme, under which customers aged between 18 and 23 can have a device installed that monitors each journey. The information is relayed to a central computer and a bill sent out every month based on patterns of use, including time of day, type of road and mileage.

To encourage young drivers to leave their cars at home at night, NU charges from just 5p per mile during the day but £1 per mile between 11pm and 6am. It says customers can save an average of a third on their car premiums.

"The schemes demonstrate these insurers' understanding that some young drivers can be sensible and should not have to pay inflated premiums," says Mr Gerrard. "More Th>n can insure an 18-year-old in a Vauxhall Corsa for under £900 a year, whereas another insurer would charge the same individual more than £1,300. Restrictions apply on where and when you can drive, but as this is a big saving, the compromise is probably worth it."

To keep costs down, go to at least 10 different providers, including specialists, for a quote; buying online can often give you a 10 per cent discount.

Meanwhile, Pass Plus, government-sponsored training for new drivers, costs £150 but lops up to a third off your premiums.

Adding a responsible parent to your policy can cut costs, but insurers take a dim view if the young driver remains the main user - and can balk at paying out.

Alternatively, you could go on your parents' insurance. However, this will add to their costs and you won't get the chance to build up your no-claims discount.

Stephen Sharp, a 21-year-old surveyor from Colchester, Essex, saved more than £1,000 on his annual car insurance with More Th>n's DriveTime cover.

A recent upgrade from a Fiesta to an Alpha Romeo 147 almost didn't get off the ground because of vertiginous premiums. "The cheapest quote I could get was around £2,000 a year, which I just couldn't afford," he says.

However, his cover is now half that with DriveTime. "If I do drive between 11pm and 6am, I know I'll have to pay the £25 fee. But even if I do that a couple of times, I'll still have saved a huge amount."