- Manual driving saves on insurance
- Automatic premiums significantly higher
- Tips to reduce insurance costs
It is still advantageous to acquire driving experience with a manual transmission, notwithstanding the increasing prevalence of automatic vehicles. Young drivers who hold automatic-only licenses incur the most expensive auto insurance premiums.
The average annual premium for auto insurance for an automatic-only vehicle driven by a driver under the age of 25 was £2,803 in 2018, up 49% from £1,887 in 2023, as reported by the price comparison website Compare the Market.
In contrast to those with full licenses, young drivers of vehicles equipped with automatic transmissions paid an additional £490 for coverage in 2023, but £760 in 2024.
Automobiles with automatic transmissions incur higher insurance premiums due to the increased cost of repairs and, according to insurers, a higher frequency of claims.
Alarming premium increases concern the expanding demographic of young motorists proficient solely in automatic transmissions.
According to data from the DVLA, 138,354 individuals passed their driving test in an automatic vehicle in 2022-23, an increase from the 34,749 who did so in 2012-13.
A growing proportion of young motorists are learning to operate automatic transmissions, which may be attributed in part to the rising demand for electric vehicles and the impending discontinuation of manual transmission production by some automakers.
According to Julie Daniels of Compare the Market, youthful drivers in general are alarmed by the escalating cost of auto insurance, but especially those who have recently acquired the ability to operate automatic vehicles.
These motorists will incur an additional cost of over £900 for auto insurance this year.
Young drivers might be dissuaded from the road if the price of transport continues to rise.
The comparison website derives its figures from the premiums that drivers are estimated to pay via its platform, rather than the actual amounts that drivers pay.
Automobile insurance currently accounts for 66% of the overall operating expenses incurred by youthful drivers.
Young drivers can anticipate annual operating expenses of £3,043 on average in 2024, according to Compare the Market.
Insurance (£2,009), fuel (£799), vehicle excise duty (£180), and a MOT (£55) comprise this amount.
The amount of £3,043 represents a rise of 25 percent compared to the mean operating expenses of £2,436 in 2023.
Nearly four in five, according to Compare the Market, are concerned about the cost of their auto insurance.
How youthful motorists can reduce their auto insurance premiums
- Compare prices
Automobile insurance premiums have a propensity to increase, so it is prudent to compare rates to find the best bargain.
Utilize multiple price comparison websites to obtain the widest variety of possible estimates.
- Make telematics (black box) policy considerations
Black box policies involve the installation of a traffic monitoring system in your vehicle by the insurer. This is intended to incentivize cautious drivers.
Numerous of these devices are designed with younger drivers in mind, who can substantially reduce their exorbitant premiums by installing one and demonstrating that they are responsible.
Nonetheless, any driver is eligible to obtain one. Officially referred to as telematics, these devices monitor your speed, braking, and acceleration force, and driving caution.
Additionally, they monitor your location while you are driving during periods deemed “dangerous,” such as the wee hours of the morning.
- Annual payment
When enrolling in a new policy, motorists will be provided with the choice between making a one-year advance payment or making monthly installments.
Although many prefer monthly payments because they avoid having to pay a substantial amount of money all at once, you could save money by paying your annual premium in full in advance.
This is because your insurer may assess interest on the monthly payments. It is beneficial to inquire whether a distinction exists and, if so, to specify it.
- Augment your voluntary surplus
The two components of auto insurance excesses are the voluntary excess and the mandatory excess.
A driver agrees to pay a voluntary excess towards the cost of a claim; this quantity can be modified when purchasing a policy or obtaining a quote. Increasing the voluntary excess by a driver typically leads to a reduction in the premium.
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The mandatory excess, meanwhile, is established by the insurer and is non-negotiable.
However, you must ensure that you have sufficient funds to pay the entire excess if you are required to file a claim.
- Guard your vehicle
By installing an authorized alarm, immobilizer, or monitoring device, motorists may be eligible for a 5% insurance discount.
- Reduce mileage
Reduced mileage can contribute to decreased insurance premiums. Driving fewer miles reduces the amount of time spent on the road and the likelihood of an accident; consequently, insurers frequently value this diminished risk and set premiums at a lower amount.
However, you must be truthful regarding your annual mileage; otherwise, your claim will be compromised.
- Are you able to alter the make and model of your automobile?
You should not opt for a car model that increases the cost of insurance, especially since youthful drivers typically pay the highest premiums. Therefore, they must select the appropriate model.
A model’s insurance premium can be affected by a variety of factors, such as the size of its engine, the number of security features it has, and the cost of repairs. The larger the engine displacement, the more typically the insurance premium will be.
Additionally, drivers ought to refrain from purchasing automobiles that have been customized with spoilers or tire rims, as doing so may result in increased insurance premiums.
In both directions, the age of a vehicle can affect its insurance premium.
Although older vehicles are typically less valuable, making them more affordable to replace, they may also be less equipped with modern safety features, thereby increasing their risk.
