Car insurance costs half the car? (UK)
August 2, 2010 8:41 AM Subscribe
Why am I quoted £1k + to insure a £2k car? (UK only)
My wife and I just bought a 2nd-hand car for about £2,000 here in the uK. It's in a very good condition, 5-door family mini-people-carrier sort of affair (a Toyota Yaris). Kind of like a small van-shaped thing. Not exactly a sports car...
I'm a first-time car owner but I am over 25 years of age and have no marks on my driving licence, no criminal record or other similar "history"... Also did "Pass Plus" which is sold as reducing insurance.
Is it purely the first-time thing that pushes all the quotes I find to £1,000 or £1,500 or above?
My wife and I just bought a 2nd-hand car for about £2,000 here in the uK. It's in a very good condition, 5-door family mini-people-carrier sort of affair (a Toyota Yaris). Kind of like a small van-shaped thing. Not exactly a sports car...
I'm a first-time car owner but I am over 25 years of age and have no marks on my driving licence, no criminal record or other similar "history"... Also did "Pass Plus" which is sold as reducing insurance.
Is it purely the first-time thing that pushes all the quotes I find to £1,000 or £1,500 or above?
If you don't have any no claims bonus, your premiums will be sky high. After a year or two without claims they should come down to something more sensible.
Putting somebody else on the insurance can sometimes help. If you haven't got a quote that includes your wife on the policy, give it a try. Having your wife own and insure the car with you on the policy could be another option.
The cost of the car doesn't make as much difference as you might think, since the insurance company is also on the hook for the cost of any car you may hit, any houses you may drive into, and compensation for any people you injure - all of which are likely to cost more than your car.
posted by emilyw at 8:48 AM on August 2, 2010 [1 favorite]
Putting somebody else on the insurance can sometimes help. If you haven't got a quote that includes your wife on the policy, give it a try. Having your wife own and insure the car with you on the policy could be another option.
The cost of the car doesn't make as much difference as you might think, since the insurance company is also on the hook for the cost of any car you may hit, any houses you may drive into, and compensation for any people you injure - all of which are likely to cost more than your car.
posted by emilyw at 8:48 AM on August 2, 2010 [1 favorite]
I assume it is the same as in the US--you are being insured against your potential liability to other persons and their property and the possibility of injury to your self. I have rented cars frequently in the UK and Ireland and find their policies a bit less flexible than those in the US and with a higher level of mandated coverage. I would guess the same insurance in the US would be between 500 and 600 USD
posted by rmhsinc at 8:49 AM on August 2, 2010
posted by rmhsinc at 8:49 AM on August 2, 2010
Oh, and some insurance companies offer ten month policies. They will often give you a full year of no claims bonus at the end of each ten months. Each ten months you get a certificate showing your "N years" of no claims bonus which you can happily take to another insurer as if you had really been insured for N years.
I did this, and I can't swear that the subsequent insurance companies didn't figure it out and inflate their quotes, but the trick did seem to work.
posted by emilyw at 8:56 AM on August 2, 2010
I did this, and I can't swear that the subsequent insurance companies didn't figure it out and inflate their quotes, but the trick did seem to work.
posted by emilyw at 8:56 AM on August 2, 2010
What emilyw said ...
In the U.S. (and I believe it's the same in the UK), there are five general types of insurance...
* Liability -- you hit someone else and need to pay for their car and their medical expenses.
* Medical -- you hurt yourself or someone else in your car and need to pay for medical expenses.
* Comprehensive -- some not-human action damaged your car, e.g. a meteor hits you.
* Collision -- you hit a tree and damaged the car. Differs from comprehensive because now it's your fault, not the tree's fault or the meteor's fault.
* Uninsured motorist -- someone else hits you, damaging the car and hurting you and your passengers, but they won't pay up.
Your insurance bill is a combination of one or more of these things. You can elect to go without some of this (e.g. people commonly go without comprehensive or collision), but there's a risk, of course.
posted by Cool Papa Bell at 9:01 AM on August 2, 2010
In the U.S. (and I believe it's the same in the UK), there are five general types of insurance...
* Liability -- you hit someone else and need to pay for their car and their medical expenses.
* Medical -- you hurt yourself or someone else in your car and need to pay for medical expenses.
* Comprehensive -- some not-human action damaged your car, e.g. a meteor hits you.
* Collision -- you hit a tree and damaged the car. Differs from comprehensive because now it's your fault, not the tree's fault or the meteor's fault.
* Uninsured motorist -- someone else hits you, damaging the car and hurting you and your passengers, but they won't pay up.
Your insurance bill is a combination of one or more of these things. You can elect to go without some of this (e.g. people commonly go without comprehensive or collision), but there's a risk, of course.
posted by Cool Papa Bell at 9:01 AM on August 2, 2010
Oh, one other thing ... insurance will also differ wildly based on the amount of driving you do, and where you live. If you do a lot of driving in a place renown for drunk-driving arrests, you are a greater risk than grandma Lizzie that drives only on Sunday around her estate in Balmoral.
posted by Cool Papa Bell at 9:03 AM on August 2, 2010
posted by Cool Papa Bell at 9:03 AM on August 2, 2010
Look to see whether you can add your dad, mum, or any older relative with a no-claims bonus to the policy. Adding another driver can often bring down your premium, in wacky insurance land!
posted by ukdanae at 9:05 AM on August 2, 2010
posted by ukdanae at 9:05 AM on August 2, 2010
Best answer: You're a high risk category. You have some combination of:
- New to driving;
- Live in a high crime area
- Young
- Male
Sometimes the car itself (big engine, high insurance group) can be an issue, but it doesn't look like it here.
The cost of your car is not the biggest risk, hence why there isn't much difference between fully comp and 3rd party only. What your insurer is telling you is that you are, statistically, a liability. Specifically, a liability to others.
FWIW, I got some quotes to buy a £1k car 5 years back. I had no recent insurance history as I'd been out of the country. I was over 25, with 8 years' driving experience. I got quoted £1.5k. It was an old skool GTI, but nonetheless. The insurance exceeded the value of the car.
One option might be to go to a broker. A broker knows how to tweak the variables. It might be cheaper if your wife is the main driver and you are a named driver. If you don't plan to commute then telling the insurer that can bring down the cost. If you only plan to drive 5k miles a year, tell them. Insurance underwriting algorithms aren't universal (I think) so shopping about and getting the insurer to change some variables can help you bring the cost down a little.
Note: don't bother lying, IMHO. Don't insure it under your gran's name, or at your parent's low crime address in the leafy suburbs. Insurance basically works on a simple principle: they don't want to pay out. So don't give them a reason to invalidate your insurance.
Also, I think Elephant is pretty competitive. When I got my car insured and reinsured they came in capably cheaper than the alternative.
posted by MuffinMan at 9:28 AM on August 2, 2010
- New to driving;
- Live in a high crime area
- Young
- Male
Sometimes the car itself (big engine, high insurance group) can be an issue, but it doesn't look like it here.
The cost of your car is not the biggest risk, hence why there isn't much difference between fully comp and 3rd party only. What your insurer is telling you is that you are, statistically, a liability. Specifically, a liability to others.
FWIW, I got some quotes to buy a £1k car 5 years back. I had no recent insurance history as I'd been out of the country. I was over 25, with 8 years' driving experience. I got quoted £1.5k. It was an old skool GTI, but nonetheless. The insurance exceeded the value of the car.
One option might be to go to a broker. A broker knows how to tweak the variables. It might be cheaper if your wife is the main driver and you are a named driver. If you don't plan to commute then telling the insurer that can bring down the cost. If you only plan to drive 5k miles a year, tell them. Insurance underwriting algorithms aren't universal (I think) so shopping about and getting the insurer to change some variables can help you bring the cost down a little.
Note: don't bother lying, IMHO. Don't insure it under your gran's name, or at your parent's low crime address in the leafy suburbs. Insurance basically works on a simple principle: they don't want to pay out. So don't give them a reason to invalidate your insurance.
Also, I think Elephant is pretty competitive. When I got my car insured and reinsured they came in capably cheaper than the alternative.
posted by MuffinMan at 9:28 AM on August 2, 2010
How many quotes have you got? First time insurance will be high, but a Yaris is a pretty small car, and £1000+ does seem too much. confused.com, comparethemarket and so on might find quotes that are better, if you didn't already try one of those sites.
posted by gregjones at 9:28 AM on August 2, 2010
posted by gregjones at 9:28 AM on August 2, 2010
The Yaris is listed as groups 1-4, with most models at 1-2, which means that the high quotes come down to location, lack of driving history / no claims bonus. The location can't be helped much unless you can somehow magic up a garage if you're currently parking on the drive or road: you might be able to shave a bit off with additional alarm/immobliser stuff, but the cost of that stuff might not make it worth the effort.
Adding additional drivers with insurance history is probably your best option, but definitely try the bloody meerkat, because I've seen forum posts showing young drivers paying a fraction of that quote.
posted by holgate at 9:32 AM on August 2, 2010
Adding additional drivers with insurance history is probably your best option, but definitely try the bloody meerkat, because I've seen forum posts showing young drivers paying a fraction of that quote.
posted by holgate at 9:32 AM on August 2, 2010
In the U.S. (and I believe it's the same in the UK),
US insurance set up is significantly different from the UK.
OP: Just because you don't have any marks or accidents doesn't matter - unless you have had several tears of insurance (while also having no marks) this counts for nothing. A new driver with their first insurance policy is pretty much considered a brand new driver. If you don't want premiums to always be high, you need to build your own insurance history, not have a policy in someone else's name.
With a 2K car, I'd only bother having a 3rd party only policy and just don't claim for anything other than a large to big accident. Your no claims bonus will build with each year of no claims and accidents.
posted by Brockles at 9:35 AM on August 2, 2010
US insurance set up is significantly different from the UK.
OP: Just because you don't have any marks or accidents doesn't matter - unless you have had several tears of insurance (while also having no marks) this counts for nothing. A new driver with their first insurance policy is pretty much considered a brand new driver. If you don't want premiums to always be high, you need to build your own insurance history, not have a policy in someone else's name.
With a 2K car, I'd only bother having a 3rd party only policy and just don't claim for anything other than a large to big accident. Your no claims bonus will build with each year of no claims and accidents.
posted by Brockles at 9:35 AM on August 2, 2010
It's in a very good condition, 5-door family mini-people-carrier sort of affair (a Toyota Yaris). Kind of like a small van-shaped thing. Not exactly a sports car...
I have a sports car, and it was cheap to insure, because a bit like a Ferrari (it's not a Ferrari sadly) the make/model is rarely involved in accidents - the people who own them tend to leave them in the garage, and only drive them recreationally on sundays in the summer during the daytime when it's not raining.
The cars are rarely involved in thefts, because there is no way to hotwire or steal them short of loading them on a flatbed trailer, and they're distinctive enough to make it hard to anonymously resell them, and too small a parts-market to be worth stripping them.
They are expensive enough that they are mostly owned by older folk, who tend to be careful drivers, having long since passed the age of testosterone-fueled driving.
Whereas the car you purchased might have a track record of frequently being an everyday-driver car, affordable as first-car, thus doubly frequently involved in accidents, anonymous and popular enough to be frequently stolen, and perhaps even easily modified, thus attractive to street racers.
Insurance rates look at the claims per mile of a model, not how fast it can go.
posted by -harlequin- at 9:38 AM on August 2, 2010
I have a sports car, and it was cheap to insure, because a bit like a Ferrari (it's not a Ferrari sadly) the make/model is rarely involved in accidents - the people who own them tend to leave them in the garage, and only drive them recreationally on sundays in the summer during the daytime when it's not raining.
The cars are rarely involved in thefts, because there is no way to hotwire or steal them short of loading them on a flatbed trailer, and they're distinctive enough to make it hard to anonymously resell them, and too small a parts-market to be worth stripping them.
They are expensive enough that they are mostly owned by older folk, who tend to be careful drivers, having long since passed the age of testosterone-fueled driving.
Whereas the car you purchased might have a track record of frequently being an everyday-driver car, affordable as first-car, thus doubly frequently involved in accidents, anonymous and popular enough to be frequently stolen, and perhaps even easily modified, thus attractive to street racers.
Insurance rates look at the claims per mile of a model, not how fast it can go.
posted by -harlequin- at 9:38 AM on August 2, 2010
Insurance rates look at the claims per mile of a model, not how fast it can go.
Er, claims per year, not per mile. (Cars that don't get miles put on them get lower rates)
posted by -harlequin- at 9:40 AM on August 2, 2010
Er, claims per year, not per mile. (Cars that don't get miles put on them get lower rates)
posted by -harlequin- at 9:40 AM on August 2, 2010
Age of the car is a factor. Parts seem to get more expensive. As I get older, my no claims bonus gets bigger, my car stays the same, yet the premiums go up still.
Also, hitting 25 made no difference to me (even with 6 years no claims bonus then), not until my mid 30's did it come down. At 30 I was quoted £4000 once for a 5 year old Saab 9-3 to drive 6K miles p/a once.
I'd like to denounce the whole thing as a fraudulent scam, but unfortunately it isnt. Its just that the actuary tables are almost never in your favour, and it gets worse every year.
posted by daveyt at 10:42 AM on August 2, 2010
Also, hitting 25 made no difference to me (even with 6 years no claims bonus then), not until my mid 30's did it come down. At 30 I was quoted £4000 once for a 5 year old Saab 9-3 to drive 6K miles p/a once.
I'd like to denounce the whole thing as a fraudulent scam, but unfortunately it isnt. Its just that the actuary tables are almost never in your favour, and it gets worse every year.
posted by daveyt at 10:42 AM on August 2, 2010
It's almost all down to age, lack of experience and the state of your no-claims bonus. I started driving in my early 30s and still ended up paying over £750 for the first year, despite having bought a car in a very cheap insurance class. The good news is that, even with a claim each year for the first two years (neither my fault), the cost dropped off quite quickly. Eight years on, I pay around £200 a year to insure a somewhat bigger car, although I do have five years' no-claims bonus.
As others have said, shop around on a few price comparison sites for a cheaper third-party insurance option. Also, choose a big excess (like £250) to further lower the cost. And drive carefully.
A lot of people go down the somewhat dodgy route of using a parent as the main driver in their insurance policy, adding themselves as a named driver. The insurance companies don't like it (they call it 'fronting'). It's also illegal, and can get you in all sorts of trouble. So probably not an avenue to explore...
posted by le morte de bea arthur at 12:24 PM on August 2, 2010
As others have said, shop around on a few price comparison sites for a cheaper third-party insurance option. Also, choose a big excess (like £250) to further lower the cost. And drive carefully.
A lot of people go down the somewhat dodgy route of using a parent as the main driver in their insurance policy, adding themselves as a named driver. The insurance companies don't like it (they call it 'fronting'). It's also illegal, and can get you in all sorts of trouble. So probably not an avenue to explore...
posted by le morte de bea arthur at 12:24 PM on August 2, 2010
You didn't really mention here, but are you a UK citizen? If you are not, and then a short length of residency can really drive up premiums.
Additionally, how long have you had your full UK licence for? Anything less than 3 years will also drive up premiums. If you swapped your licence for a UK one, or if you have a general Euro driving licence, that won't be counted as time you had a licence
posted by moiraine at 1:53 PM on August 2, 2010
Additionally, how long have you had your full UK licence for? Anything less than 3 years will also drive up premiums. If you swapped your licence for a UK one, or if you have a general Euro driving licence, that won't be counted as time you had a licence
posted by moiraine at 1:53 PM on August 2, 2010
PassPlus doesn't do much, the IAM courses *do* have an effect.
I agree with everyone else that the problem is that this is your first time. There's a good way around that, though, that not many people know about. Get an old car (older than 15 years), and get classic car insurance. This is usually buttons, if you can keep the mileage under 5k a year. After a year or two, you have a real no claims bonus that you can use for a modern car.
Unfortunately, you've already bought your car, so that's not going to be much help. What are the prices like for your wife, with you as a named driver? Often women get lower premiums. There are also specialist insurers that handle only claims from women (like sheila's wheels).
posted by bonaldi at 1:59 PM on August 2, 2010
I agree with everyone else that the problem is that this is your first time. There's a good way around that, though, that not many people know about. Get an old car (older than 15 years), and get classic car insurance. This is usually buttons, if you can keep the mileage under 5k a year. After a year or two, you have a real no claims bonus that you can use for a modern car.
Unfortunately, you've already bought your car, so that's not going to be much help. What are the prices like for your wife, with you as a named driver? Often women get lower premiums. There are also specialist insurers that handle only claims from women (like sheila's wheels).
posted by bonaldi at 1:59 PM on August 2, 2010
There was an article the other day in one of the UK papers about a boy who was quoted £17,500 premium for his £2,000 car. I think the lowest he could find was £3,000 (without comprehensive coverage). Sorry I can't find the link to the article.
posted by blue_wardrobe at 2:18 PM on August 2, 2010
posted by blue_wardrobe at 2:18 PM on August 2, 2010
Remember: insurance doesn't protect things, it protects assets.
Much of what you are paying is to protect yourself from financial liability should you injure person or property. So the car choice makes some difference, but the majority of it is based on where *you* fall in the actuarial tables.
Also, if the UK Yaris is the same as the US Yaris, it is probably worth more than 2000 pounds. You just got a good deal on it.
posted by gjc at 6:42 PM on August 2, 2010
Much of what you are paying is to protect yourself from financial liability should you injure person or property. So the car choice makes some difference, but the majority of it is based on where *you* fall in the actuarial tables.
Also, if the UK Yaris is the same as the US Yaris, it is probably worth more than 2000 pounds. You just got a good deal on it.
posted by gjc at 6:42 PM on August 2, 2010
Yaris Verso right? I pay approx £450 inc breakdown cover through direct line to insure my 2002 model, with 2 years no claims. Your postcode does have a big effect.
I got my first year of insurance via my parents insurance - it defintely lowered things by about £200 (I was about your age at the time) and they agreed to give me a one year no claims bonus as I had been a registered driver on my parents car previously. If you can swing something like that it can make a big difference. Definitly try and play diffrent insurers against each other - ask them what they can do for you in light of offer £x you have been given form company z.
posted by jzed at 6:53 AM on August 3, 2010
I got my first year of insurance via my parents insurance - it defintely lowered things by about £200 (I was about your age at the time) and they agreed to give me a one year no claims bonus as I had been a registered driver on my parents car previously. If you can swing something like that it can make a big difference. Definitly try and play diffrent insurers against each other - ask them what they can do for you in light of offer £x you have been given form company z.
posted by jzed at 6:53 AM on August 3, 2010
Work through all the advice given here and let us know what you can get it down to.
posted by turkeyphant at 6:54 AM on August 3, 2010
posted by turkeyphant at 6:54 AM on August 3, 2010
Postcode, overnight storage location, second named driver, increased voluntary excess and expected annual mileage all provide notable discounts on top of factors already discussed in your original post. The biggest one you can't access will be proven history of driving without claim (your no claims bonus) and unfortunately that just comes with time. Until they see that, then your upstanding character alone isn't sufficient to warrant large discounts. The upside of your first year is you don't need your NCB protected, which is something :)
Turkeyphant's link is an excellent guide. Also, if you opt to do the "Insurer X offered me this low price, will you beat it?" when haggling, ensure you're not talking to two divisions of the same insurer (e.g. Admiral and Elephant) as they can look up the reference codes for the other divisions to confirm that quote. Good luck.
posted by kuriyama at 6:52 AM on August 4, 2010
Turkeyphant's link is an excellent guide. Also, if you opt to do the "Insurer X offered me this low price, will you beat it?" when haggling, ensure you're not talking to two divisions of the same insurer (e.g. Admiral and Elephant) as they can look up the reference codes for the other divisions to confirm that quote. Good luck.
posted by kuriyama at 6:52 AM on August 4, 2010
Response by poster: All the answers here have been really helpful! I feel clued in now, and we got some good insurance.
posted by KMH at 1:34 AM on September 2, 2010
posted by KMH at 1:34 AM on September 2, 2010
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posted by KMH at 8:42 AM on August 2, 2010