Why it's clever to add dad to your cover

Why it's clever to add dad to your cover

When you're forking out thousands of pounds for your first car, the last thing you want is to pay as much again for your motor insurance. Insurance for new drivers can easily cost upwards of £1,000 a year - especially if you have an inner-city postcode and have to park the car on the street.

But there are ways younger drivers can keep costs down. Peter Gerrard of insuresupermarket.com, a website that compares the cost and cover of a range of policies, says young drivers should consider adding an older adult to their policy. Figures from insuresupermarket show that adding an older person as a named driver (rather than the main driver) can save hundreds of pounds. For a 20-year-old driving a W-reg Citroen Saxo, the website has a quote from Bell insurance at £1,038.45. If this same driver put a 50-year-old named driver on the policy, too, this would bring down the premium to £804.30 a year.

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Gerrard says drivers should be accurate with their mileage and consider increasing the excess they are prepared to pay on the policy.

'One of Norwich Union's policies is a high-excess policy which is set at £500. As well as giving you cheaper premiums, this type of policy will make you think twice about claiming. So if you did £200 or £300 worth of damage to your vehicle, you might pay yourself rather than use your insurance and lose any future no claims bonus.'

Another option is one of the fast-track bonus policies, designed to allow young drivers to build up a no-claims discount more quickly. The policies run for nine or 10 months instead of 12 but give a year's no-claim discount at the end - assuming you don't claim in that time. Norwich Union's Rapid Bonus policy is available to anyone aged 17-29 taking out a comprehensive insurance policy who has had no previous claims. Elephant. co.uk has a similar policy which runs for 10 months and gives a year's discount.

A number of insurers, including Tesco, Direct Line, the AA and Norwich Union offer discounts of as much as 40 per cent for drivers who have taken the advanced driving course, Pass Plus. This involves six hours of extra lessons once you've passed your test, and covers skills such as driving in adverse weather conditions and on motorways. Make sure you ask about Pass Plus when obtaining an insurance quote. Gerrard says not all application forms ask about it, even if the company offers the discount.

If you have Pass Plus and are using price comparison websites to pick your insurance, it is also worth trying more than one. For example, Insuresupermarket doesn't factor Pass Plus into its quote generator but rival Confused.com does.

Buying your insurance online can often save a substantial amount - Norwich Union, for example, offers a 20 per cent discount for internet sign-ups, the AA 15 per cent and Direct Line and Tesco 10 per cent. But compare these savings with the cost of other policies. For example, a search on insuresupermarket.com for a young driver found a policy from Norwich Union at more than £900, which even with a discount for applying through its website would have been more expensive than the lowest-cost policy from Quinn Direct, at just over £600.

Paying your insurance by direct debit can also hike up your bills - research from analyst Defacto shows that this can be by as much as 35 per cent. If you need to pay in instalments, buying on a credit card and paying that off monthly could work out cheaper.

Norwich Union is currently piloting a new scheme for young drivers aged 18 to 21 which works on a 'pay as you go' basis. Pay As You Drive uses Global Positioning Satellite (GPS) technology via a black box in the driver's car to record the journeys he or she makes. Premiums are then based on usage and billed monthly.

The theory is that drivers will be able to control their premiums to more affordable levels by driving mainly between 6am and 11pm rather than between 11pm and 6am - the peak accident times for young drivers. Pay as You Drive was launched last year to the first 1,500 drivers to apply. NU says it is likely to open up the product again to new customers once it has had more time to see how it worked.

Guardian Unlimited © Guardian Newspapers Limited 2006