Understanding Insurance

Car insurance for new drivers

Congratulations! You have passed your driving test and are now ready to hit the road as a new driver. As daunting or exciting as this may seem, first things first, you need to tackle the minefield of choosing your first insurance policy! But don’t fear, were here to help guide you through this process with our extensive guide to car insurance for new drivers. 

What costs are associated with running a car?

Surprisingly, asides from owning a house, a car is one of the most expensive things you may own; and were not just talking the value of the vehicle itself, have you thought about running and maintenance costs? Here we provide a breakdown of the key costs involved in owning and running a car.

Car insurance

Car insurance is a legal requirement in the UK and is designed to safeguard other drivers, passengers and pedestrians in the case of a road traffic accident caused by yourself. With comprehensive insurance you also cover yourself and your own vehicle in the case of an accident. All motorist must be insured against their liability to other people. This is stipulated in the Road Traffic Act 1988.

Car tax

Vehicle Excise Duty (VED), otherwise referred to as car tax or road tax is a compulsory fee that is a tax that is levied as an excise duty and which then pays for maintenance of roads and bridges etc. The fee for road tax, which can be paid annually or monthly via direct debit, can range from £0.00 to £1,000 and is all dependent upon how environmentally-friendly your car is based on C02 emissions. There are plenty of tools online that you can use to calculate how much your car tax will cost.

MOT test

The MOT (Ministry of Transport) test is an annual test that you must put your vehicle through to ensure that it is safe and roadworthy. By law, your vehicle must pass the test in order to be allowed back on the road. The standard MOT cost, noted as of December 2017, for an MOT in the UK is £54.85. A garage cannot charge more than this but can charge less. If your car fails its MOT you will incur additional costs for the required repairs. An MOT retest is not chargeable providing the repairs are completed within 10 working days.


Whether your vehicle is diesel or petrol, the cost of fuel isn’t cheap. You can estimate the cost of the fuel you will need by working out how many miles you will travel and multiplying that by the estimated MPG of your vehicle.

Servicing and maintenance

Asides from your annual MOT, there are other costs to consider to keep your vehicle serviced and maintained, these include the cost of:

  • Tyres
  • Windscreen wipers
  • Oil, windscreen washer and engine coolant
  • Cleaning and valeting your car

Don’t forget the added costs you may incur if something was to go wrong. For example you need a new head gasket or a scratch on your bonnet needs repairing. It is always worth overestimating service and maintenance costs as opposed to ignoring the possibility that they might occur.

Breakdown cover

If you regularly use your car to travel long distances or you use it to get yourself to and from work on a daily basis, it may be worth having breakdown assistance. Breakdown cover ranges from simply having an engineer taking a look at your car at the roadside should you breakdown, to having yourself and your car picked up and towed to a nearby garage should you not be able to drive it. The level of cover varies in price dependent upon your requirements.

Is car insurance compulsory?

Yes, car insurance is compulsory. If you are the registered keeper of a vehicle then it is your responsibility to ensure that you have valid car insurance.

A word of warning, you may think that; providing that you don’t get pulled over by the police; the government will not be aware if you choose to drive illegally, well I can tell you that you are wrong.

In a bid to crack down on the amount of uninsured drivers on the road the Driver and Vehicle Licencing Agency (DVLA), Motor Insurance Bureau (MIB) and Continuous Insurance Enforcement (CIE) are working in partnership to identify uninsured vehicles. If you are the registered keeper of a vehicle that is not insured and has not been SORN off the road then you can be issued with one of the following:

  • A fixed penalty notice of £100
  • Their vehicle being clamped, seized and disposed of
  • A court prosecution and a maximum fine of £1000

Please be aware that the above measures may be in addition to any police prosecution.

What car insurance do I need?

There are three types of car insurance available within the UK; third party only, third party fire and theft and comprehensive insurance. It is a legal requirement to ensure that you have at least one type of insurance against your vehicle for it to be legally allowed on any UK road.

Third party only insurance is the minimum legal level of cover that is required to drive a car on UK roads. This level of cover protects you against any liability should you cause a road traffic accident. Third party only insurance covers you for the damage you cause to another person’s car or any injury you cause to somebody else, including passengers and pedestrians.

Third party fire and theft will provide cover for the same things that third party only does but with the additional benefit of covering your vehicle against malicious or accidental fire and also the theft of your vehicle.

Comprehensive insurance covers you for everything that third party fire and theft does but with additional cover for you and your car for any injury or damage sustained as the result of a road traffic accident, even if the accident was your fault.

How much is new driver car insurance and why is new drivers insurance expensive?

According to insurance compression site Money Supermarket, from data recorded in June 2017, the average cost of a comprehensive car insurance policy for a new driver is £1,188, £1,283 for third party fire and theft and £1,686 for third party only.

Unfortunately, insurance for new drivers isn’t cheap. Inexperienced motorists are seen as a big risk for insurers, this is reflected in the high premium prices for new drivers. In June 2017, Insurance comparison site Money Supermarket noted that ‘young drivers, aged between 18 and 21 make up 70% of car insurance claims on comprehensive insurance policies’. Based on this, young drivers are seen as a much greater risk for insurers.

How can I reduce the cost of my new driver insurance?

Unfortunately, if you are a new or young driver, you can’t get away from the fact that, statistically, the odds are against you when it comes to insurance risk factors. That said, there are a number of ways that you can reduce the cost of your insurance premium as detailed below.

Consider a telematics insurance policy

Telematics insurance, otherwise referred to as black box insurance, involves insurers installing a little ‘black box’ in to your car. The little black box tracks your vehicles movements and speed through a GPS system which is inside the box and then sends the data back to the insurer. The following elements of your driving may be recorded:

  • Your location
  • How long you have been driving for
  • How quick your acceleration is
  • How smooth your breaking is
  • How quickly/ sharply you are taking corners

All of this information is then gathered by the insurer to provide you with a unique insurance price based on your perceived driving ability. There are, however, some common exclusions to black box insurance for young drivers. For example, some insurance providers may specify on your policy that you don’t drive between certain hours when serious accidents are most likely to occur. Or the insurer may stipulate that a low premium price is dependent upon you driving 5,000 miles only, thus keeping your risk level down.

Reduce your annual mileage

One of the things insurers look at is how many miles you will cover on an annual basis as, inevitably, the more time/miles spent on the road, the greater risk of having an accident. If you can reduce your annual mileage at all by, for example, taking the train on a Friday or car sharing your journey to work on a Monday then there could be some savings to be had your car insurance premium. After all, the less you are on the road, the less of a risk you are to the insurer!

Take an advanced driving course

Taking an advanced driving test such as Pass Plus through a registered approved driving instructor could result in cheaper new driver car insurance premiums.

Pass Plus is a practical training course that takes around 6 hours to complete and allows drivers to improve their driving skills and learn to drive more safely. To find out more about the benefits of Pass Plus click here.

Opt for a higher excess

As a general rule, the higher the excess, the lower the insurance premium price. Although it is not advisable to set your excess at an amount that you would not be able to afford should you need to claim so it’s always worth being sensible and bearing this in mind before setting your excess.

Think security

You will often be offered a cheaper insurance premium if the insurer thinks that your car is less likely to be stolen or vandalised. To improve the security of your car you could add an immobiliser or alarm, make sure your car isn’t parked on the road at night (a locked garage is preferable).

If you’d like to know more about car insurance, we’ve written a handy ‘guide to car insurance’ to explain it all.

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