Young drivers are fairing badly with car insurance costs as prices are ever increasing. The rise in IPT is not helping. Switching to a black box or telematics policy may help save money.
According to a new a new MoneySuperMarket telematics guide , 17-20 year olds can switch to a black box policy and save over £200.
Certainly worth considering as these drivers have seen a 17% year on year rise in their premiums, taking an annual policy to nearly £2000.
Younger drivers are also likely to bear the brunt of the latest Insurance Premium Tax (IPT) rise coming into force this Thursday, 1st June.
IPT is rising from 10% to 12% which could add another £300 to a car insurance policy,
Telematics, also known as ‘black box’ insurance, uses technology to bring down the cost of cover.
A small device is installed inside the car to measure various aspects of the driver’s behaviour, particularly length of journeys, type of roads driven on, time of day/night journeys, and smoothness of driving.
Insurers can analyse the data and adjust the driver’s premiums accordingly, with those performing well rewarded with cheaper premiums.
More young drivers are switching to and the most popular car model to reap savings is the Citroen C1s, followed by the Fiat 500 and Vauxhall Corsa.
Kevin Pratt, consumer affairs expert at MoneySuperMarket, said: “Car insurance premiums are rising rapidly and they’re set to get higher.
“IPT is increasing this week and the recent change to the Ogden discount rate for personal injury payments means insurers will have no option but to hike prices further.
“Younger drivers are facing a double-whammy.
“They already pay higher premiums than older drivers because youngsters have more accidents.
“So as the tax levied on premiums increases, they end up paying a greater amount in relative terms.
“And because a high proportion of personal injury claims arise from accidents involving younger drivers, insurers will target their discount rate increases primarily at those under 25.
“Telematics offers a cheaper alternative to traditional policies if the driver can demonstrate he or she is a lower-risk proposition than the statistics for their demographic suggest.
“Black boxes also make the roads safer by incentivising good driving habits.
Any young driver on a traditional policy should spend five minutes shopping around when their policy is up for renewal – they could make significant savings if their black box data confirms they are safe and sensible behind the wheel.”
Diane Ray, MoneyHighStreet.com comments: “It’s always worth spending a little time to see if you can save money on your car insurance costs.
Shop around, don’t necessarily buy the first policy you come across and don’t just automatically renew with your existing insurer.
Buying insurance is not about just getting the cheapest policy, it’s about buying the car insurance cover you need at the best price.
If you’re using comparison to check the best deal, remember not all insurance providers participate in these e.g. Direct Line and you will need to go to their individual websites to get your quotes.
Pay close attention to detail to be certain that you’re comparing policies that are like-for-like and include the same benefits.”