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Car insurance: Why are premiums so high for young drivers?

Comprehensive insurance is really important to keep your car covered against anything that can go wrong, but it can end up costing more if you are under 25 years old. You could be driving the same car that your old man does, but you’re paying more for insurance. Here’s why:

Why the age gap is important

Car insurance can be costly to anyone under the age of 25 as it is based on a couple of risk and insurance calculations: This is how it works:

  • Your comprehensive insurance premium is based on how much of a risk you pose to your insurance company.
  • Your inexperience as a driver is a disadvantage, simply because you are more likely to have an accident.
  • The more likely you are to claim from your insurance, the higher your premiums will be.
  • Older drivers tend to be more cautious and have more experience behind the wheel than their younger counterparts. So fewer accidents happen.
  • Another factor could be how often your car will be in the open, exposed to weather, and in an unsecure location.
  • Simply put, if you are less of a risk to your insurance company, you’ll have cheaper premiums.

How to beat the system (yes, really)

  • Pick your wheels wisely. Choose a vehicle with less power to lower your premium.
  • Increase the voluntary excess on your policy to lower your premium. This way you can enjoy a low premium, and the added incentive to drive carefully so that you don’t have to pay a high excess.
  • Beef up the security in your vehicle by installing a tracking device. Insurance companies love it when you are as serious about your vehicle’s security as they are, so invest in a good tracking device.
  • Third Party, Fire and Theft cover is another good option to have if your car isn’t financed.  You’re covered for the important bits, which is vital if you are involved in a 3rd party claim.

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