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What Are The Cheapest Cars To Insure For Young Drivers?

Yellow car with magnifying glass

As a young driver, the prospect of getting your first car can be an extremely daunting prospect. First, you have the cost of learning to drive to take into account. Then, you’ll have to pay for the car itself. And then it’s time for the biggie: insurance cover. With younger drivers paying the highest insurance premiums of any age group, it’s easy to understand why many simply avoid driving altogether. However, all hope is not lost. Choosing the right car can help to slash your premiums, saving you serious cash. With this in mind, we’ve compiled a list of the cheapest cars to insure for young drivers.

We’re going to explain exactly why young drivers end up paying higher premiums, how it’s all calculated and which cars will be cheapest for you to insure. Plus, we’ll give you some handy tips to help you lower your premiums!


Young driver insurance

Once you’ve passed your driving test, it can feel like you’ve got the whole world at your feet. All that’s left for you to do is find four wheels to get you going, right? Not quite. Unfortunately, you’ll be sure to get a painful reality check once insurance is factored into your search. If you’re 17-25 years old, you’ll be paying some of the highest insurance premiums around—making the search for a car considerably more difficult.

Insurance tends to be one of the biggest expenses that young drivers have to deal with when they first get going. Simon McCulloch, Director of Commercial at Compare The Market, explains that “[whilst] the overall cost of motoring for young people has fallen in the first half of the year it remains unreachable for many, with insurance alone making up over half of the cost of getting on the road.”

You can see this even more clearly in the table below:

Cost Name
Cost
Insurance £1,220.00
Fuel £788.62
Est. VED (road tax) £125
MOT £54.85
Breakdown cover £42.61
Total cost per year £2,231.08

Source: Young Drivers Index (July 2019)

Now, it’s important to note that young drivers are not doomed, despite what the figures suggest. Whilst the cost of driving can be steep, further research from Compare The Market shows that young drivers who choose a more cost-effective car can enjoy much cheaper premiums. In fact, when young drivers went out of their way to pick a cheaper car, their average premium came to £855, compared to an average of £1,220 for those that didn’t.

So, it’s important to think carefully about the car you’re going to buy—not only because of the upfront cost, but also due to the added expense of high insurance premiums. Before we take you through the cheapest cars to insure, however, we’re going to break down how insurance is calculated.


How is insurance calculated?

Checklist

The cost of your insurance ultimately boils down to how risky you are to insure. If you’re more likely to make a claim, you’re a risk to insure. As such, insurance providers will hike up your premiums to essentially make up the cost. Before deciding on a figure for each driver, insurance providers mull over a range of factors…

👴🏽 Your age

With young drivers typically having less driving experience than older drivers, they’re statistically more likely to end up in an accident. Just think about how nerve-wracking it can be to go from driving under the supervision of your driving instructor to driving alone! Due to this increased risk, insurance providers have no choice but to increase premiums.

Unfortunately, there’s not much you can do about your age. Even if you decided to wait it out until you’re no longer in the young driver age bracket, you’re not guaranteed lower insurance premiums.

🌍 Where you live

Where you live can have a huge impact on your premiums. If you’re an inner-city dweller, for example, you’ll probably come out worse off. With how busy city centres can get—complete with congestion, stop-start driving and frequent cases of road rage—you’re at a higher risk of ending up in an accident. Those who live out in the countryside, by comparison, might enjoy lower premiums.

Of course, it’s not just about the likelihood of you ending up in an accident. It’s also about what the rates of theft and vandalism are like in your area.

👩‍💼 Your job

Yep, even your occupation can have a role to play in the calculation of your insurance premiums. If you have a job, for example, that requires you to transport expensive equipment, you’re a high risk—if you need to make a claim, it will be an expensive one.

The length of your commute can also play a role. Those who live mere minutes away from work are more likely to get cheaper premiums than those who have to spend hours on the motorway.

🚗 Your driving history

If you’ve got some driving experience under your belt, you should have built up a claims history. If you’ve had to make a claim in the past, it will mean higher premiums. By comparison, those who have a No Claims Discount will be able to enjoy cheaper premiums. If you’ve committed a driving offence, this will obviously have a negative impact on your premiums.

It’s easy to see why younger drivers are at a disadvantage here once again. After all, if you’ve only just passed your test, your driving history won’t be too extensive!

📋 Your policy type and chosen excess

There are three main types of insurance policies to choose from. They each vary in coverage and cost:

  • Third party covers the cost of repairs or injuries for third parties involved in an accident that was caused by you.
  • Third party, fire and theft covers the same as above, and also the cost of theft or vandalism to your own car.
  • Comprehensive covers everything above, in addition to damages to your own car in an accident.

Contrary to popular belief, minimum cover (third party) is not always the cheapest. In fact, with statistics showing that more claims are made by those with third party cover, insurers have since attached a high risk label to minimum cover.

The amount you choose to pay in the event of an accident—otherwise known as excess—can also affect the cost of your premiums. If you opt for a higher excess, insurers will lower your premiums. Of course, if you end up in an accident, you’ll have to pay this amount. So, it’s important that you don’t pick an excess amount solely due to cheaper premiums. After all, you need to be able to afford it.


How does your choice of car impact your insurance?

One of the most important factors contributing to the cost of your insurance premiums is, as you probably guessed, your choice of car. With how much cars can differ from one another—from cost to power to performance—insurers use a category system to figure out how risky they are to insure. The system runs from 1 to 50, with the cars resting on the lower end of the scale coming out cheapest to insure.

So, how exactly are cars grouped into these numbered categories? Well, there are a few main factors that play into it…

Factors used to determine insurance category groups
The cost of damage and parts If your car will be expensive to repair if an accident does occur—including the cost of parts—it will end up with a higher rating.
Estimated repair Some cars will end up taking longer to repair than others, due to a difficulty in finding parts or more advanced features. Long repair times will increase the chances of your car getting a higher rating.
Power and performance Drivers who own high-performance cars are statistically more likely to make insurance claims. So, the more powerful your car is, the higher the rating will be.
Safety features Cars that have been fitted with an Autonomous Emergency Braking (AEB) system have less of a chance of being involved in front to rear accidents. So, if your car has one, it might end up with a lower rating.
Bumper compatibility The alignment of the front and rear bumpers can affect how a car performs in the event of a front to rear accident. If your car’s bumpers meet the right criteria, it will receive a lower rating.
New car values Insurers often use the price of new cars as a guide for the cost of replacement parts and general repair.
Security features If your car is fitted with certain security features—ranging from alarms/immobilisation systems to glass etching to locking devices for alloy wheels—it has a better chance of ending up with a lower rating.
Cost of parts Insurers use a standard list of 23 common parts to compare the cost of parts from one manufacturer to another. The lower the costs, the lower the rating.

Source: Thatcham Research

Needless to say, there’s a lot that goes into the calculation of your insurance premiums. If you’ve already got your eye on a car, and you’re wondering which insurance group it belongs in, you can use Thatcham’s My Vehicle Search tool.


What are the cheapest cars to insure?

Cartoon red car with woman driving attached to car key

Finally, we’re moving onto the subject matter that you’re actually interested in: the cheapest cars to insure! Now, it’s important to note that any figures we use are not absolute. Your premiums might end up higher or lower, depending on the factors we’ve already discussed. So, try to keep an open mind and don’t get too fixated on the numbers!

We’ve used the latest data from Compare The Market’s Young Driver Index to compile a list of the cheapest cars to insure.

Model
Average premium
Average car value
Volkswagen Up! £818.81 £5,357.33
Citroen C1 £868.45 £3,083.12
Fiat 500 £870.63 £4,970.12
Skoda Citigo £871.74 £5,235.69
Vauxhall Adam £885.99 £6,391.18
Vauxhall Viva £896.34 £6,084.35
Peugeot 107 £899.68 £1,887.91
Hyundai i10 £905.37 £4,536.93
Fiat Panda £915.97 £1,550.81
Ford Ka £919.36 £2,234.88

If you pay attention to the figures listed in the table, you’ll see that whilst some cars might be incredibly cheap to insure, they might also come with a hefty upfront price tag. This is something that you’ll have to think long and hard about before buying a car. Ideally, if you’re hellbent on being cost-effective in buying a car, you’ll choose one that has a reasonable upfront cost and low insurance premiums.

The best way for you to find the cheapest cars to insure—and buy upfront—is to shop around. In fact, according to Compare The Market, you could save nearly £230 by looking around. So, try and use a variety of car insurance comparison sites to get a range of quotes. The more comparisons you get, the better your chances are at getting your hands on a good deal!

How can I get cheaper insurance premiums?

For starters, you have a better chance of getting cheaper insurance premiums if you actually know what you’re looking for. If you just dive in headfirst without proper research, you’re not going to get what you actually want. With that in mind, you’ll want to look at our handy guide covering what to check for when you’re buying car insurance. It will take you through all the questions you need to ask yourself before purchasing insurance.

Next, you might want to consider buying a black box (telematics) policy. Popular amongst young drivers, these policies enable drivers to earn insurance discounts depending on their driving habits. If you choose this type of policy, your car will be fitted with a black box. This will monitor your driving style—from braking to speeding to overall usage—and send subsequent data to your insurer. If it’s decided that you’re a “safe” driver, you’ll be rewarded with discounts. If you’re not, you could see an increase in your insurance premiums.

Still not enough? Feast your eyes on our top tips for saving money on your insurance! You’ll be able to get yourself a nifty deal in no time!


FAQs

1. Should I just look for the cheapest car to insure?

Not exactly. It’s important that you weigh up both the upfront cost of buying a car and the cost of insurance. There’s not much point in picking out a car that comes with low insurance premiums if it will cost you an arm and a leg to buy, is there? You might want to consider buying a used car to bring down the upfront cost.

2. Would it be cheaper if I was added to someone else’s policy?

It depends. As an inexperienced young driver, you could end up increasing the other person’s insurance quite a lot. If, however, you add an experienced driver—with a good driving history—to your own policy, it could reduce your premiums.

3. What’s a No Claims Bonus?

Once you’re insured and driving, you begin to build up your own driving history. If you reach the end of a year without making a claim, you earn a No Claims Bonus which will give you a discount on your insurance. The longer you go without making a claim, the bigger the discount will get.

4. Will I get cheaper premiums once I’m no longer considered a young driver?

Not necessarily. Remember, age is only one of many factors that are carefully considered when calculating your insurance premiums. If you want cheaper insurance, read our tips and make sure you shop around!

5. Do I have to stick with the same insurance provider?

Once your time is almost up with your current insurance provider, you might want to have a look at your options. More often than not, you’ll be able to get a better deal with another insurer. Companies almost always offer better deals to their newest customers, rather than their current ones. It doesn’t hurt to look, so give it a try.

6. I’m don’t really use my car much. Do I still need to get it insured?

Yes! Even if you’re only taking your car out for a spin once a month, you’re still using it on public roads. This means you need to be insured. Of course, if you’re not going to be using your car for a long period of time, e.g., if you’re going to university, you could always apply for a Statutory Off Road Notification (SORN).

7. What’s a Statutory Off Road Notification?

If you’re taking a break from using your car, you can declare your car as off road to the DVLA. Once you’ve applied for a Statutory Off Road Notification, you can stop paying for tax and insurance. The main catch to doing so, however, is that you cannot use or keep your vehicle on public roads. You’ll need to keep your car in a garage, on a driveway or on private land.

8. What will happen if I’m caught driving without insurance?

Seeing as it’s illegal to drive without at least third party insurance, it’s safe to say it won’t be brushed off. If you are caught, you could end up with a £300 fixed penalty, 6 penalty points and, if your case goes to court, an unlimited fine or disqualification from driving.

By Bethany Hall

Whether you’re a learner or a pro driver, Bethany is here to help. From defensive driving to the Highway Code, she’ll tell you everything you need know about driving. If she’s not on the road, you’ll probably find Bethany with her head in a book or binge-watching the latest TV show.

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