Auto Insurance

Buying your first car is something every young driver looks forward to but finding out how much the insurance is going to cost often takes some of the shine off the moment. However, even though insurance premiums are steadily increasing and young drivers are currently facing insurance bills running into thousands of dollars, there are some steps that can be taken in order to lower the cost.

While many younger drivers may feel like treating themselves to a sporty little number or a souped up racy model, it is far more cost-effective to stick to a model, which the insurers view as low-risk. The same principle applies to any modifications. An insurer is likely to view any attempts to rev up an engine rather dimly and will ramp up the premium significantly in response.

Once you have your car, take as many safety precautions as possible as insurers will give you credit for attempting to look after it. Keeping it parked in a garage and fitting an industry-recognized mobilizer are two easy ways to get a discount. Fitting a tracking device is even better and will provide the young driver with cheaper insurance.

Once you finally get your license it is very tempting to dismiss the idea of any more lessons or tests but in reality you are no more experienced than you were before you were handed the slip of paper allowing you to drive. The insurers recognize this and are therefore very wary with young drivers. Going the extra mile to gain valuable experience and formal recognition of this, such as with an advanced driver course, means big brownie points with the insurer.

While on the subject of drivers` behavior, getting any kind of points or endorsement on your license is going to mean having to pay a whole lot more to stay on the road. Even minor misdemeanors such as a poorly parked vehicle could make insurers much more cautious about offering you coverage and they will make you pay more for the privilege.

However, while insurers do scrutinize applications from younger drivers very carefully, they recognize that affording the premiums can be difficult. This is why they are increasingly offering ways to reduce your insurance in return for some assurances.

One of the most innovative ways to reduce your premium is to agree to the insurer installing a tracking device in your auto. This monitors your driving habits, including speed and distance and provides them with a more personalized driver profile. For careful motorists this can mean considerable discounts but for drivers with bad habits, the premium can actually increase so it is worth thinking about carefully before agreeing.

Another way insurers are helping drivers with high premiums afford their coverage is by permitting payment via installments rather than insisting on a lump sum. While this is very helpful, additional charges and interest are usually added to the premium to cover the costs of administering the finance scheme.

For those considering spreading out their insurance premium, it may be worth checking an online loans calculator first to see if it would be cheaper to pay for the insurance with alternative finance. The amount charged on a personal loan may work out less costly than accepting the installment scheme offered by the insurer.