A leading insurance company may have come up with a scheme that rewards rather than punishes newly qualified teenage drivers.
Insurance giant Swinton have begun offering special six-month polices aimed at those who have just passed their test. The selling point comes in the form of a 30% discount should you make it through those first six months without claiming, rising to 45% after 18 months. This news is sure to excite young drivers who have had to contend with astronomical car insurance premiums for many years.
According to a spokesman for the AA, one of the UK’s biggest brokers, around half of all insurers are refusing to even quote for 17-year-olds. Young men, he says, have been particularly penalised and are typically paying twice as much as newly-qualified female motorists. The statistics however back up these fears as under 21s have been proven to be 10 times more likely to be killed or involved in a car accident compared to their 35+ counterparts.
Andy Roden at Swinton says the company acts as a broker for 15 underwriters, but warns young drivers hoping to sign up that they need to make sure they are driving smaller, lower-powered cars that fall into insurance groups 1-4 to get reasonable prices.
As it stands users have to pay the whole six-month premium in one lump sum payment. This however is set to change once the policy beds in when installment payments will be introduced.
Some of Swinton’s competitors however have derided the news as nothing more than an attempt to snare young drivers. A spokeswoman for Confused.com says: “Customers need to look beyond the marketing hype and question whether the first six months trial policy will be counted towards their NCD should they decide to switch insurers come renewal time.
“Building up your NCD is the quickest way for young, newly-qualified motorists to take advantage of cheaper premiums from all insurers, so we’d certainly advise caution when opting for a policy that will potentially take 18 months to earn one year NCD.”
If the sounds of this new policy isn’t the music to your ears it was intended to be there are other ways to possible reduce the amount you pay for car insurance.
o Opt for a small car with a small engine.
o Try adding a parent to the policy. Assuming they have a clean record, this will often bring the price down.
o Consider a “Pass Plus” training scheme. By paying around £180 for six extra lessons, you could save £700 on the first insurance premium alone. Check before you sign up what discount will be given by your insurer.
o Don’t pay in installments if you can avoid it. Kwik-Fit is a good bet for new drivers, but charges 39.9% APR if you spread the payments over the year.
Darren is the author of several articles pertaining to cheap car insurance
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