Cheap car insurance for students
Need a car for uni but put off by high insurance prices? Here's our ultimate guide to keeping them low.
Owning a car isn't cheap, so driving as a university student is pretty much a luxury! Not only do you have to fork out for your wheels, but you also have to think about road tax, fuel and regular MOT tests.
However, car insurance is by far the biggest drain for any young driver, as premiums tend to be way higher when you're less experienced on the road for obvious (but nonetheless infuriatingly unfair) reasons.
With this in mind, we thought it'd be worth taking a proper look at some of the ways that students can significantly reduce their car insurance premium.
We've also included our favourite trick of comparing 100s of providers in a matter of minutes – check it out below!
What’s in this guide?
How much does car insurance cost?
You could easily be shelling out more than you need to, just because you've chosen a type of cover that isn't suited to your particular situation.
The cost of your overall insurance package depends on three things:
- The level of cover you go for
- Your own personal level of risk (i.e. how likely you are to have an accident or need to make a claim).
- The insurance company you choose.
We'll take you through each of the points above to help you make the best decision and keep your insurance costs low.
How to choose the right level of car insurance cover
There are three main types of car insurance cover to choose from:
Third party only car insurance
This covers damage and medical claims of other people, should you be liable for those damages in an accident.
If your own car gets damaged then you will, unfortunately, have to cover the cost yourself (making this cover great for old bangers but probably not the best choice if you've got a brand new pride and joy).
Third party, fire and theft car insurance
This is probably our top pick for student car insurance cover. TPFF cover can often be the most affordable option, but also offers theft cover – which can be important if you are living in a city for university and don't have anywhere safe to keep your car.
Remember that you're still not covered for damages to your own vehicle with this option if you cause an accident, though.
Fully comprehensive car insurance
This option has you completely covered – if you cause an accident or are a victim of one, then your car, their car and both of your medical costs will be covered (up to a certain point, of course).
If you are accident prone then we recommend getting comprehensive cover to pay for damages – skimping now just to save an immediate buck or two could mean you end up having to shell out loads later.
The trick is just to be completely honest both with yourself and the insurer, as honesty goes a long way in the insurance game!
The obvious assumption would be that the cheapest option is third party insurance, as that offers the least amount of cover, but don't be fooled!
Some students have reported saving up to £1,000 just by switching from third party to comprehensive cover, so don't make any assumptions. The only solid advice we can give you here is to do as much research as possible and explore all of your options until you're sure you've found the best deal.
Is telematics car insurance cheaper?
The standard type of car insurance drivers normally go for entails choosing a policy that covers you and your car (to whichever level you've chosen from the above) at a set rate for the whole year. However, these types of premiums aren't likely to be the best option for young people, as rates tend to be higher for under 25s.
Instead, we'd recommend going for a more specialist policy which will give you the opportunity to have your premiums cut down either due to infrequent driving or as a reward for driving safely on the roads.
There are two key types of specialist policies to consider: pay as you drive (PAYD) and pay how you drive (PHYD) – both are often referred to as telematic or 'black box insurance' due to the fact that both work by having a small box fitted to your car to measure how and when you drive. Temporary car insurance can also be a great option for students only driving for short periods of time.
Here is how they work:
Pay as you drive (PAYD)
This option is basically the same as a pay as you go mobile contract – you only pay for cover as and when you use your car, meaning it's a great option if you use your car infrequently.
As mentioned, this option involves having a device fitted to your car that monitors how far and how frequently you drive, and charges you according to that (some insurers charge for sending out an engineer to fit the black box, so be aware of this).
It's not always the cheaper option, but this little black box could massively reduce your student car insurance premium if you work it to your advantage, so it's well worth checking out.
Here are a few options currently on the market for PAYD:
- Cover Box - Your insurance price will depend on the number of miles you drive as well as the time of day/night that you choose to drive. If you don't drive at night (considered more dangerous) then this is an option to consider
- Insure The Box - Choose your yearly miles (6,000+) which you can top up if necessary. You can even earn more through safe driving.
Pay how you drive (PHYD)
This option also involves having a GPS box attached to your car. PHYD is almost the same as PAYD, and there's a lot of crossover between the two, but PHYD tends to focus more on how safely you drive as opposed to how many miles you do.
These black boxes keep an eye on a number of factors including acceleration, braking, cornering speed and more to determine what sort of driver you are and set your premium accordingly.
Fancy yourself a safe driver? If so, this might be the option for you!
Bonus: These boxes also act as an anti-theft device, allowing police to track via GPS. This means that if anyone is dumb enough to try and steal your wheels, it will get tracked down pretty sharpish!
The best Pay How You Drive options we've come across are:
- Co-op Young Driver Insurance – They keep track of your driving for a period of 90 days, and then decide on the insurance cost based on this
- Ingenie – With the slogan 'drive well, pay less', Ingenie are a good option for young people as they check your black box every three months and reduce your premium if you've been driving safely
- Drive like a Girl - Once you get past the sexist name, this is actually quite a good option (and open to men too!). Drivers are rewarded for safe driving and for not getting behind the wheel between 11pm -4am.
Be warned, however, that while good driving is rewarded with telematic insurance, bad driving could see your policy cancelled which is a serious black mark on your driving history.
Temporary student car insurance
Short-term or temporary car insurance will cover you if you're only driving for a short period of time. For example, you might not want to take your car to university but you still want to drive it when you're home for the holidays.
With temporary car insurance, you're normally able to insure yourself for anything between 1-28 days.
Be warned that you are now legally obliged to insure any tax-registered car, even if it's locked in your parents' garage and isn't going anywhere during term time. The only way around this is if you obtain a statutory off-road notice (SORN) from the DVLA – read more here.
Note that temporary insurance often isn't available to drivers under the age of 21, and is almost impossible to take out if you have a history of making claims or any points on your license.
Can you use your parents' car insurance instead?
If you're the main driver of the car (the person who uses it the most) then the insurance will have to be in your name, although you can add your parents to it as named drivers. This means you can't just add yourself to your parents' car insurance in the hopes it will cover you in your own car.
If you're not keen on insuring your car for the whole year when you only plan on driving it when you're home for the holidays, it might be worth considering selling your car and simply taking out cover that will allow you to drive your parents' car (if they'll let you, that is!) during the summer months.
Car insurance comparison trick
Once you've chosen your level of cover and the type of premium you're going to go for, it's all about hunting around for the best deal.
As each comparison site only has a select number of insurance companies listed (and some companies aren't even featured on comparison sites), using just one site to look for the best car insurance deal really isn't enough research to ensure you're getting the best price.
We've tried and tested the following method, which involves taking a few simple steps to maximise the number of companies that you compare to squeeze out the most accurate results.
Just remember to keep track of all the best prices you spot while doing the comparison trick to help you make your decision at the end.
The first of three comparison sites you should use, and we recommend starting with this one. It doesn't take long to fill in the forms on MoneySuperMarket and it has prices from loads of top car insurers.
Next, give Confused.com a few minutes, as they often feature some insurers that other comparison sites miss out.
Once you compare with these guys, you'll have just about covered all of the suppliers on offer to students.
Endsleigh is a well known and respected student insurance company, and that includes car insurance. You'll find them on the comparison sites, but you can also get a discount if you go to them direct.
Have a look at Direct Line
Direct Line chooses not to be featured on comparison sites, so it's worth having a quick check of what they offer to make see if they can beat your current prices.
By using our quick comparison trick, you'll be able to whittle your options down to a few that are suitable. Once you've tried this and compiled a list of the best options (plus any pay as you drive options that might interest you) then you can jump on the phone and start haggling!
8 ways to lower the cost of your car insurance
A great way to save money on your student car insurance is by taking the time to lower your risk level, or in other words, show insurers that the chances of you costing them any money is pretty slim.
All you're doing is convincing the insurer that you're a safe driver and at a lower risk of making a claim (without lying). This can save you hundreds each year, so listen up!
Ask for a discount
Insurers are just dying to get students on their books, so use this to your advantage!
There are some discounts you could be entitled to, so make sure to mention them during the haggling process:
Multi-policy discount – if you come from a household with lots of cars, some insurers will give you a discounted rate if you insure all of them with the same company. Some insurers even allow you to insure all cars on one policy at a cheaper rate, so this is definitely worth enquiring about.
No-claims discount – if you've never made a claim before, they might be willing to lower your premium
Introductory discount – some companies offer an introductory discount which will then decrease or be removed depending on your driving.
Opt for a higher excess
Your student car insurance excess is the amount you're willing to pay out your own pocket if you get into a crash that's your fault.
For a lot of students, the excess will be set at a certain level. For example, if your excess is £500 and you get into a crash that causes £3,000 of damage, you'll have to pay £500 from your own pocket before the insurance company will cough up the rest to cover the repairs.
If you volunteer to have a higher excess then the insurer will take some money off of your premium (you're basically saying "I think the chances of me causing an accident are so slim that I'll offer to pay a large sum from my own pocket if I do").
Therefore, it's important to be realistic here, as you don't want to squander your hard work trying to save money by having to fork out major cash if you have a crash.
Don't add modifications
Spoilers, neon lights, tinted windows... none of these are a good idea from an insurance perspective (neither is gluing hundreds of cuddly toys to the paintwork – just FYI). Not only are they unimpressive to the general public, but they also don't impress insurers either!
Their assumption is that your car will be more attractive to thieves if you add on extra cosmetic features, and they'll also think of the obvious stereotype that you're likely to be cruising about town revving your engine like a boy racer.
Take a Pass Plus Test
Pass Plus tests are government run tests that offer new drivers a chance to show they're confident in various different circumstances on the road. By taking the Pass Plus, you could decrease your premium by up to a whopping 30%.
There's no set cost for the Pass Plus scheme as it depends on your instructor, but we estimate that you'll probably be paying around £140 (although some students have been known to get onto the course for £100. For more info check here). This might seem like a lot to fork out for the test now, but it'll be worth it in the long run!
Park off-road and increase safety
If you can manage to secure off-road parking or a space in a garage then you'll see your premium drop substantially, so this might be something worth considering when looking at accommodation. Basically, if the insurer feels that your car will be more secure, then your premium will drop.
You can also cut your costs by increasing the general safety of your car. Grab yourself a wheel lock and a car alarm, and make sure that you tell your insurer about them!
Build up a no-claims bonus
If you've never had a crash before, you'll have built up a no claims bonus. If you save one up for around six years you could even be eligible for as much as a 60% discount. However, the minute you have to claim for something the bonus is scrapped, so this is a big incentive to take as much care on the roads as you possibly can.
Most students won't have been driving long enough to get a massive no-claims bonus, so this is more just a heads up for the future – another reason to avoid any scuffles on the road!
Add a named driver
Simply add an experienced driver as a named driver and this will lower the price of your premium. This will (in theory, of course!) lower the risk of an accident in your insurer's mind simply because the more names added to the policy, the less time you'll spend behind the wheel.
We just have to stress that you can't name the experienced driver as the main driver of your car if that's not the case. This manoeuver (called 'fronting') is well-known by insurers and if you get caught, the repercussions are tough.
Choose the right car
Taking a step back and thinking carefully about the kind of car you want to drive will ultimately determine your insurance premium. Choosing a powerful car with a soft-top roof will set you back way more than a VW Polo – the 'safer' your car the less you'll pay, essentially.
Check out this guide from the IIHS (Insurance Institute for Highway Safety) for a bit more info on which cars are in which 'class' for insurers, as well as which cars are safest on the road.
University car clubs
Check with your university to see if there are any car clubs on site or in the area. These basically allow you to hire a car at university on a short-term basis, so you get the benefits of driving without having to fork out upfront for a car and insurance.
With Co-Wheels, for instance, you pay a minimum of £33.25 a day (or £4.75 an hour) for car hire and they're based in 24 university cities around the country. There's no minimum age requirement but you have to have held a licence for 12 months beforehand.
Common car insurance mistakes to avoid
Never put someone else as the main driver
It might seem like a good idea to add one of your parents to the insurance (perfectly legal) and name them as the main driver in order to bring the cost down (totally illegal – this is called 'fronting').
The repercussions of this trick – a hefty fine, cancelled policy and a black mark for future insurers – just ain't worth it!
Don't lie in your insurance application
A little white lie on an insurance application might seem like a good idea to make super savings, but it's classed as fraud and can even result in a criminal record. This is serious business!
Never auto-renew your policy
You would think that opting to renew your policy automatically with a company would get you a good deal, but this is exactly how they sting you! Insurance companies hike their prices each year, and they count on your complacency as a way to make cash.
Set a calendar reminder and do your research again. Changing policies year by year is perfectly normal and could save you a lot of dough.
Don't under-insure to get a lower premium
If your car is worth £6,000, you need to insure it for that amount.
Pretending that your car is worth less will, of course, bring your premium down, but if your insurer catches on to your game, they'll not only pay out less for any damages but they could even choose to withdraw your policy.
Don't go for the cheapest car insurance
As we mentioned earlier, third party insurance might seem like the best and cheapest option at first glance, but in reality, it could result in you paying out way more cash to cover yourself if you're involved in any accidents.
The trick is, as always, to do your research and do it thoroughly!
Don't pay in monthly instalments
We know it's a big ask to pay out for the whole year in one go, but unfortunately, if you opt to pay in monthly instalments you could be paying anything up to 30% + APR in interest.
If you can't afford to pay it all in one go, consider paying it with a 0% credit card which you can then pay off in instalments throughout the year.
Don't let your insurance run out
Yes, we know, we've made this a bit difficult by saying you shouldn't auto-renew your policy, but while auto-renewing is financially risky, it's even riskier to let your insurance policy expire before you take out a new one.
Protect yourself by setting a calendar reminder a couple of weeks before your policy is due to expire and get on the hunt for a new one ASAP.
Don't assume you can drive your mates' cars
This is a major schoolboy error of judgement. Generally, your fully comprehensive insurance will only cover you for driving the car that you're registered to. Make sure you read your policy thoroughly and know exactly what you're covered for.
Of course, it goes without saying for all of the options and tips above that you should always make sure you check your cover fully. Make sure you read through all of the small print and possible clauses that you may get stung by.
Think about what's important to you, and decide on your cover according to your needs, not just the price tag!