Putting teenage drivers on a road to affordable cover

Putting teenage drivers on a road to affordable cover

If you have longed for the day when your teenage children can start driving themselves around but have been put off by insurance quotes in excess of £2,000, one leading company has come up with a scheme that may help put an end to your time as an unpaid taxi driver.

This week, insurance giant Swinton started offering special six-month polices aimed at those who have just passed their test. If they can get through the six months without making a claim, they are rewarded with the chance to renew for a whole year - with a hefty 30% discount. After 18 months without claims, the discount rises to 45%. For some young drivers it could be the lifeline that makes insuring a car a possibility.

In recent years, the cost of insuring newly qualified drivers has skyrocketed, and it is not uncommon for a 17-year-old to be quoted more than £3,000. Put off by a steep rise in claims, plus accident figures that put the fear of God into parents, many insurers have run a mile. According to a spokesman for the AA, one of the UK's biggest brokers, around half of all insurers are refusing to even quote for 17-year-olds. Young men, he says, have been particularly penalised and are typically paying twice as much as newly-qualified female motorists.

The most recent stats show why. Under-21s are 10 times more likely to be killed or seriously injured in a crash than drivers aged 35 or more. Not only are they more likely to make claims, but those claims tend to be.....continued below

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significantly larger.

In an attempt to bring down premiums, Swinton - which has traditionally targeted students and other young people - has become the latest firm to try to find a new way to make insurance more affordable. It is offering the chance to buy a full-priced policy for just six months - and to then renew with almost a third off.

Drivers who can get through the first year-and-a-half without a claim get a 45% discount when they come to renew. Had they been with a more traditional insurer, they would still have only built up one year's no-claims discount (NCD).

Andy Roden at Swinton says the company acts as a broker for 15 underwriters, but warns young drivers hoping to sign up that they need to make sure they are driving smaller, lower-powered cars that fall into insurance groups 1-4 to get reasonable prices.

Strangely, the deal is not available online - you have to talk to someone in Swinton's call centre or go into one of its 450 branches. At present, users have to pay the whole six-month premium in one go. The company says that in the near future they will be able pay a deposit, and to split the premium into two payments, made in the first and second months. As ever, there will be an extra interest payment.

Swinton's move is the latest in a line of initiatives designed to help new drivers find affordable cover. In October 2006, Norwich Union became the first insurer to offer a pay-as-you-drive policy specifically aimed at first-time insurees, and those who drive fewer than 8,000 miles a year.

The scheme involves the installation of a black box in the car. Drivers avoiding peak times and using motorways pay the least. Young drivers are charged £1 per mile to drive after 11pm, when accidents are more likely to happen. More Th>n launched a similar version called Drive Time, aimed at those aged 18-25 who only want comprehensive cover.