Young motorists underestimate cost of car insurance #pay #off

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Young motorists underestimate cost of car insurance

YOUNG motorists are being caught out by the costs of car insurance, with most not budgeting enough for their first year of driving.

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Young drivers are not budgeting enough for car insurance

A survey of 500 young drivers by the RAC has found that 56% underestimated the average 810 cost of insuring a car for a 25-year-old, expecting to pay 750.

Things are even more expensive for 18-20-year-old drivers, who have to pay an average of 972 a year which is nearly three times as much as the 367 premium for the average UK driver.

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Parents had to bail out half of young drivers in the survey

The cost of car insurance for young and new drivers is unquestionably high due to the high cost of claims

RAC Insurance director Mark Godfrey

The research also found that 17% of young motorists budget 750-999 for their annual insurance costs, 15% opted for 1,000-1,500, a further 9% thought that 1,500-2,000 was nearer the mark and 5% expected insurance to set them back more than 2,000.

It comes as no surprise, then, that insurance is seen as the biggest barrier to young people owning and running a car, with 62% of respondents saying this was the case, compared to 22% who felt it was buying a car and 12% who cited day-to-day running costs.

The high cost of insurance means that for the first year of driving, mum and dad bail out 51% of young drivers, while 43% paid their premium in one go and 44% opt for monthly payments.

RAC Insurance director Mark Godfrey said: The cost of car insurance for young and new drivers is unquestionably high due to the high cost of claims and, unfortunately, we expect it to increase over the next few years, which will make it even harder for young drivers to get motoring.

But it doesn t have to be that way with a black box policy, which allows new drivers to prove how safe they are.

“The beauty of telematics is that it is fairer for young drivers as, rather than simply rating them in line with every other young driver, they can be judged on their own driving ability and potentially earn cheaper insurance premiums and renewals as a result.





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