The Office of Fair Trading is set to suss out exactly why consumers are shelling out 40 per cent more cash for motor car insurance than we were just a year ago. Whether the OFT actually manages to institute premium price cuts is unknown currently, but if it is successful, younger motorists will finally have some cause to celebrate, as the average cost of getting behind the wheel of their first car has recently been revealed to be in excess of £12,000 inclusive of car price, insurance, driving tests, road tax, and driving lessons.
Most 18 year old motorists will select an older model Vauxhall Corsa as their first vehicle, according to one industry expert. While the average price of such a car is a relatively inexpensive £1,450, insurance on such an affordable vehicle can be an eye-watering £2,300, with one insurance expert saying that the largest challenge to newer motorists isn’t purchasing their first set of wheels but finding an affordable insurance policy for it.
The main motivating factor for car insurance companies to charge young drivers such remarkably high rates is due to the statistically high likelihood of these drivers becoming involved in car accidents. However, some insurers have gotten around this through the use of telematics devices that track a driver’s motoring habits and reward them for driving in a safe and responsible manner.
A handful of insurers have moved into the telematics field, with some companies reporting an average savings of as much as £800 for new and relatively inexperienced drivers.