The increasing costs for young drivers
New research has suggested recently that the year on year increase for total costs associated with driving for 17 – 24 year olds, means that for many, it is simply too expensive. Whilst the total costs needed to fund your first year of driving continue to increase, this research has confirmed that the reality is, that less and less young drivers are taking to the road. Not only do young drivers need to consider the costs of learning to drive and the test needed to pass but then there are vehicle costs such as Tax and MOT and of course, insurance. The combination of these things means that young drivers are facing a total cost in excess of £4000.00 for their first year of being on the road according to driving school RED. In reality it is likely many young drivers and their families who are able to help them, actually face costs above this amount. Like all areas of our economy learning to drive and getting on the road is a cost which increases year on year and RED suggests this increase is as much as 13 percent when all factors are considered. In order to fully understand these costs and where perhaps, savings could be made, let’s get into the detail of a young drivers first year of driving.
It would seem that the actual number of young adults taking up driving has in itself decreased accordingly to new research. In the case of 17 to 24 year olds taking lessons to drive, the numbers have reduced by a massive 21% in the last 9 years. When questioned concerning this, those within this age range suggested that outside of the initial costs to learn to drive; with average lesson costs being in the region of £40.00, they were aware they simply did not have the means to fund a car and the insurance costs that go with it. In fact, as many as 44% of drivers are over the age of 25 before they take up driving, in an effort the reduce the total costs and place themselves in a better financial position to afford these costs. So it would seem then that a fair percentage of drivers are waiting as long as a decade after the legal age in which you can drive; in the UK being 17, before deciding to get on the road.
So aside from the cost of the actual car itself what next is the highest cost young drivers are facing? The answer perhaps is obvious and this is the eye-watering costs of motor insurance for the first year of driving. The average cost of this first years’ insurance, according to the price comparison site Compare the Market, is a massive £1275.00 and this is where the 13% increase in costs year on year stems from. Where of course there are options will allow this repayment to be broken down into a monthly instalment, which for many is more affordable, there are also other ways which can help young drivers reduce this cost. A popular choice is that of adding an additional person to the ensure policy. Many young drivers will add a parent or other family member to the policy for the first year which could save them as much as £400.00. Another option for young drivers is to become a named driver on a parents policy, reducing the cost by up to £730.00. Of course doing a named driver instead of a policy holder is not within its risks. Whether it be a different type of cover or an inability to start building up a No Claims Bonus, ensuring you understand the detail of such policies is key.
Thankfully there are other ways of reducing the costs for insurance in the first year for young drivers thanks to the industry as a whole realising that increasing costs is reducing the number of drivers in a general sense. One of which, is the Tracker Box which a number of insurance companies offer, allowing them to track how you drive and effectively reduce your premium accordingly. This is a great tool for not only the insurance companies but also for the young drivers themselves, in the importance of maintaining sensible driving habits. Another tool at the disposal of young drivers is the resource of Pass Plus. Pass Plus allows those who have just passed their test to do additional testing to validate their ability to drive sensibly and inside the required rules. Although it will not have as much impact on cost reduction as some of the other methods we have discussed here today, it too could lead to a form of saving for the expensive first year of driving.
Representative Example: Representative 1286.98% APR on a loan of £300.00 with 5 monthly repayments of £101.03 Total amount repayable £505.13 Annual interest rate (fixed) 290%
Warning: Late repayment can cause you serious money problems - For help, go to moneyadviceservice.org.uk
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Author: Internal Customer Services Agent