6 Performance Car Insurance Tips for the Younger Generation

The cost of insurance has rocketed at an unprecedented rate over the past twelve months, with the AA estimating that car insurance prices for the average motorist have risen by over 50%. However, it isn’t just auto insurance which has been affected, with bike insurance also having been on the receiving end of some pretty sharp rises. Quite frankly, there is no way you can avoid these escalating prices unless you decided to walk everywhere, which is a bit dull and takes an awfully long time.

Despite recent attempts by the European Court of Justice to eliminate gender discrimination in insurance (the effects of which are likely to spill over to the USA), little has been done to eliminate age-based discrimination. This will likely mean that young motorists are going to face increasing problems in the coming years with car insurance prices increasing by 70c per day according to Moneysupermarket.com. So, how bad are things for young drivers at the moment?

A Selection of Quotes

How much do you think it would cost an 18 year old male driver to get insurance on a Ferrari F50 worth over $650,000? The answer is $16,000 and is a special offer which omits a number of important features normally included in insurance packages such as legal protection.

However, this might be a slightly unrealistic example. How about a Ford Cougar? The Cougar was a beast of a car created in the 1990s which came equipped with either a 2 or 2.5 litre engine. It has since been retired from service and a young motorist could easily pick up a heavily used ten year old Cougar for about $1,500. However, the insurance for this same motorist on this vehicle would cost over TWELVE times more than the car itself, available from $19,175. Even though the average 18 year old might be able to afford to one off payment to buy the Cougar, they obviously couldn’t afford to run it.

So what about a Ford Fiesta? The sensible option for any new driver as it is an inexpensive, reliable car with a small engine that won’t use much fuel. Insurance on a conventional 2002 1.25 litre Ford Fiesta for this same 18 year old driver would still cost at least $8,840 (over three times the value of the car).

Insurance Tips for Young Drivers

It is therefore unsurprising that many young motorists are being forced to drive without insurance. This is bad news for us all, with research suggesting that damage caused by uninsured drivers along with fraudulent claims had cost the insurance industry $3.5 billion over the course of the past year, with this being attributed as the main cause of the 50% price hikes which is affecting all age groups. This raises questions about the logic of age based discrimination. However, there are a number of things that young drivers can do to help ensure that they are not priced out of the market:

• Pick your car carefully - Other than age and gender, the car you drive has the biggest impact on the total cost of insurance. As was proven, a Ford Fiesta with a small 1.25 litre engine would cost an 18 year old motorist over $10,000 less to insure than a 2.5 litre Ford Cougar. Equally, try and choose a car which is worth a greater value as this will also result in an insurance saving. Insurers recognise that a driver of a ten year old Ford Fiesta is far more likely to crash than someone with a two year old version of the car because people with the older model are statistically less concerned about it being damaged.
• Shop around - Compare prices with as many different insurers are you can in order to give you the best chance of finding a cheaper deal. Easiest way of doing this is using price comparison websites.
• Negotiate - Don’t just accept an insurer’s first offer, as it will likely be made with the knowledge that you are unlikely to challenge it. Phone them up and tell them that you have had cheaper offers from elsewhere. The likelihood is that they will offer you a better deal.
• Security features - cars fitted with approved alarms and immobilisers are less likely to be stolen than those without them. Insurance premiums will reflect this. It is more than worth the extra expense getting these fitted in the long run if you don’t already have them.
• Parking - Park your car in a garage where ever possible, as it will then be less likely to be stolen or vandalised. Again, insurers recognise this and will offer cheaper prices to people who don’t park their cars on the road.
• Walk a few places - We have already established that walking is boring, but try walking to a few places rather than taking your car everywhere. Obviously, the less distance you travel in your car over the course of the year, the less your insurance will cost as you will be less likely to have an accident.

It may be difficult to accept not being able to buy a vehicle with a larger engine until later in life, but frankly it is a reflection of the difficult conditions currently being experienced within the insurance market. There will be plenty of time to own a sports car once you have got a couple of year’s experience of driving, which lowers the cost of insurance by a significant amount for young motorists.