Reduce car insurance premiums

T he cost of car insurance for under 25's is on average, £2,250 per year. 

But don't despair as there are masses of ways to reduce car insurance premiums with specialised tricks, dos and don'ts to slice off every spare penny.

Whether or not you're a young driver, insurance premiums depend on three things:

Chosen insurer
Comparison sites will check your details with hosts of insurers' and brokers' websites, scraping their data off the screens to report back the cheapest.  Yet as they don't all compare the same sites, to maximise the spread of quotes, you need to combine them. 
Once you've tried the comparison sites, it's time to check specialist young driver policies to see if they undercut them.  Due to the non-conventional nature of these policies, getting a firm price will often involve getting a calculator out.

Level of cover
It's important to understand that there are three different types of car insurance: third party, third party fire and theft, and fully comprehensive (full definitions below).
Logically, third party insurance should be cheapest for young drivers as it offers a lesser level of cover than fully comp - yet this isn't always the case.  So get quotes for third party and fully comp just in case it's cheaper.  Plus always make sure you check your policy so you know exactly what you are and aren't covered for in the event of a claim.

Your risk level
By reducing an insurer's perception of your risk, you can reduce the price you'll pay.
Make sure you're as little of a risk as possible, and you can make big savings by showing an insurer that you're not the typical high-risk young driver.  Each insurer's price depends on two things; first, the underwriters' assessment of your particular risk focus, and then the pricing model that dictates the type of customers the insurer wants to attract.

Follow some simple tips to help reduce your insurance premiums

Do fit a security device.
Any extra security will help; fitting an alarm or immobilizer (especially one approved by Thatcham) will reduce the bill substantially.

Do pick your car carefully.
Avoid buying a car with a large engine and flashy looks as the impact on car insurance cost would cost increase.  The more changes you make to your car, barring security ones, the more you'll be charged.
Always make sure you inform your insurer of any modifications to your car, whether you made them or not, or it may invalidate your policy.  A modification is anything that isn't part of the standard vehicle specification, including factory fitted optional extras such as alloy wheels.

Do park carefully.
Theft and accidental damage add a wedge to insurance costs.  If you leave your car in a garage or driveway it's a big deterrent to theft and means accidental damage is less likely, resulting in a 3% - 7% drop in insurance costs.

Drive carefully
Plus the more points on your licence, the higher the cost.  While speeding points remain on your licence for four years, insurers usually check for convictions during the last five before they are removed from your record. 

One speeding conviction may only affect the price of cover by around 5% - but any more'll bump up the price, with two offences costing around 20% more.

Being caught with a mobile phone is more serious, and can double your quote.  It can also give you three instant points on your licence, which stay on for four years.  Approved hands-free kits are fine if used properly.
Do look at additional driving courses.

Pass Plus:This Driving Standards Agency course is aimed at helping new drivers (within 12 months of passing their test) become more confident on the road.  There are six modules: town driving, all-weather driving, driving out of town, night driving, driving on dual carriageways and driving on motorways.

The cost of the course is about £120 with Karen's Driving School but varies depending on where you live and the instructor or driving school you choose.  Some local councils offer discounts of up to 50%, usually for those under 25, and in Wales it only costs £20

Do reduce your milage.
The less you drive, the cheaper your insurance will be.  Where possible, try and reduce your mileage. 

Adding a second driver
If you're under 25, insurance can cost a fortune.  Yet by adding a second driver to the insurance, even if they won't use the car often, it can smooth out the average risk and sometimes reduce the premium.  Those with an additional record for driving well are likely to help make bigger savings, but anyone that's in a lower risk category than you can help.

Fronting
If it's your car and you will be the main driver of it, don't be tempted to put someone else down as the first named driver.  Young car owners who list parents as the main driver to cut insurance costs are doing what's called 'fronting' - and it's illegal.
This route may be suggested by well-meaning parents who aren't aware that they're doing anything wrong, and are keen to get a cheaper quote.  Yet the consequences can be very serious; it invalidates insurance and can lead to prosecution, so don't do it.

Job description
There's another quick tip to lower your costs: tweaking your job description could save you cash.  Insurers decide prices depending on historic risk assessments, and your occupation plays an important part in this. 
You may also save on insurance if you're in a more stable relationship, ie, if you're living with a partner rather than listed as single.

Excess
It's worth considering going for a policy with a higher excess (the amount of any claim you need to pay yourself).  Many people will find that claiming for less than £500 worth of damage both increases the future cost of insurance and can invalidate no-claims bonuses, meaning it's not always worth making a claim.

So why pay extra for a lower excess? A few policies will substantially reduce premiums for a £1,000 excess, so try this when getting quotes.  The downside of this is if you have a bigger claim you'll have to shell out more, so do take this into account.

Grab hidden cashback & discounts
The top cashback deals
Once you know who your cheapest provider is, you need to check there aren't any hidden cashback deals, these can be as high as £100.  If your second or third cheapest quotes weren't too much more expensive see if cashback's available for them too and find the overall winner.

Remember next year
Fortunately, providing you drive well and don't have any accidents, your insurance premium should get cheaper after the first year.  However, don't automatically stick with the same provider - it may not still be cheapest.
Apply for cover from your existing insurer as a new customer and it's likely you'll be given a cheaper price.  This is because car insurers, like any company, will happily profit from apathy if they can.
Insurers must send out renewal notifications at least 28 days before renewal, though this doesn't leave much time, and you can end up rushing to try and find a cheaper price.

These techniques should slash your costs.  Yet even so, for some young drivers car insurance will remain unaffordable.  Is it really worth it?

Warning! Women's car insurance to rise
The EU court ruling - that from Dec 2012 gender can't be a factored into insurance prices - means that as women under 40 pay much less than men under 40, they need to expect gradual rises until then