Insurance companies consider all new drivers to be “high risk” customers because of their lack of experience on the road, and as a result policies tend to be very expensive. Even if you drive an older, slower car, the statistics still show that you're more likely to have an accident than a driver with more years of experience under their belt.
How can new drivers reduce their insurance premiums?
Insurance companies like to see a more experienced driver included on a policy, whether they are the main named driver or an additional driver. This means you can reduce your premium either by being added as a named driver on the policy of a more experienced driver, or adding them as a named driver on your own insurance policy. Each of these options has its advantages and disadvantages, and the route you choose should largely depend on who drives the car the most.
Being a named, additional driver
Generally the cheapest way of getting insurance cover at first as a new driver is to be named on a more experienced person's car insurance. Being an 'additional driver' suggests to the insurance company that you will only occasionally be driving the car, which poses less risk for them, so their premium may be lower.
This isn't the best strategy to take longer-term, however, because few insurance providers allow you to build up no-claims discounts if you're not the main driver. Under the 'no-claims' system, insurers add together all the years you've been driving without making a claim, and then they calculate a percentage of your premium to work out the no-claims discount they are willing to offer you – sometimes reducing your annual premium by a significant amount.
Equally, while all new drivers are keen to find the cheapest car insurance they can, it is illegal to allow someone else to 'pretend' to be the main driver of a car being insured if in reality it is you that is driving it the majority of the time. This is called 'Fronting' and, if you're found out, not only could the insurance company refuse to pay out for a claim, but you could also end up getting prosecuted and struggling to secure car insurance in the future.
Being the main driver
If you become the main driver, and add a more experienced named driver to the policy to help bring down the premium, it will probably be more expensive in the short term – but the advantage is that you are building up your no-claims discount straight away (as long as you don't make a claim!) and this will soon start to reduce your annual premium as the insurer regards you as a lower risk. Shop around to find the best deal, and try talking directly to insurers to negotiate a better price.
The pros and cons of using a car insurance broker
Finding the best value car insurance can be a tedious and time-consuming task, and if you're short on time it's tempting just to accept one of the first quotes you receive. There is an alternative, however – and this involves using the services of a car insurance broker.
First, the broker will talk to you about your insurance needs and circumstances, and then they will check the latest deals from a variety of providers to come up with the best premium for you. Once you're happy, they will introduce you to the insurance company, which then decides whether or not to offer you their policy.
Finding a car insurance broker
Word of mouth recommendations are the best means of finding a good insurance broker, particularly if you know someone whose broker has helped support them through a claims process. Once you have a shortlist, ask each broker about their past experience in finding suitable insurance cover for your type of vehicle, and find out what kind of support they promise in the event of a claim. It might also be worth asking them for references from existing clients willing to endorse their services.
The advantages of using a broker
A good broker should take all the hassle out of finding a good car insurance premium, and free up your time to get on with other things. They will have up to date insurance contacts and may be able to negotiate a better deal for you than you would have achieved going direct as an individual. They also have an in-depth understanding of the insurance market and how premiums work, and can talk you through insurance options and help you establish exactly what you need from your policy. The best brokers will also help to guide you through the claims process if you find you need to make a claim at a later date.
The disadvantages of using a broker
One potential pitfall of using a broker is the cost, because they add their own fee on to the final premium you pay. Make sure you establish the fee they will be charging you up front. If they are good at their job, their work should pretty much pay for itself: with their list of contacts and well-honed negotiating skills, they should be able to strike a good deal on your behalf, and you will have also saved yourself a lot of your own time. When you're choosing a broker, make sure you also find out how many insurance companies they deal with. Those with a larger portfolio of contacts will have a wider choice of deals to choose from, and are likely to achieve better results.