Why is insurance for young drivers so expensive?
Teenage female drivers have seen insurance prices rise by as much as 50 per cent in the past two months, shocking new figures have revealed.
According to MoneySupermarket.com, the cost of insurance for females between the ages of 17 and 19 have increased by an average of 22.1 per cent, leaving female drivers £231 out of pocket.
This is because of a European Court of Justice (ECJ) ruling banning discrimination by insurance groups based on gender.
While insurance for men between the ages of 17 and 19 has actually decreased by 11.2 per cent in the same period, insurance for teenagers is still the most expensive out of any age group in the UK.
When comparing new cars prices, younger drivers must also consider insurance costs for any given model before making the final decision.
The industry is littered with reports of young drivers being quoted upwards of £15,000 in insurance for cars such as the Vauxhall Corsa in some of the most extreme cases, but why is car insurance for young drivers so high?
Car insurers are essentially number-crunchers. They will calculate the probability of a driver having an accident or a car being stolen or damaged.
Statistically younger drivers are more likely to have an accident on the road than any other age group due to a lack of experience behind the wheel. This means insurance companies need to cover themselves by offering higher insurance premiums for younger drivers.
Data shows younger drivers are more likely to be involved in collisions at higher speeds and more likely to have several passengers in the car, causing more damage and injuries to those involved.
In the case of the headline-grabbing £15,000-plus quotes you see in newspapers, this is a simply an insurance company's way of telling the driver it does not want to take on the risk of insuring the car.
Younger drivers will not have no claims bonuses and, potentially, could be unwilling to offer a large excess. This too will bump up the cost of insurance for younger drivers.
This means younger drivers will need to choose a car that falls into a lower insurance group. This is often smaller cars with less powerful engines, meaning the likes of the Ford Ka, Nissan Micra, Kia Picanto and Hyundai i10 are all popular choices with younger drivers.
Insurance groups are a system that rates each car on a scale of one to 50 with one being the cheapest to insure and 50 being the most expensive.
However, car insurance for younger drivers is also dependent on the driver's individual circumstances including where the car is kept, how often it is used and any driving convictions on the driver's record.
Comparing new car prices is just the beginning for younger drivers - the hunt for cheaper car insurance is much more difficult and should influence any new car buyer when they are looking for a new vehicle.