After the Test : Reducing Insurance Premiums
Insurance Based on Vehicle Use
Insurance premiums are high for young drivers due to the higher risk that they will be involved in an accident. However, there are things that new drivers can do to reduce this risk, and so reduce their insurance premiums:
- Avoid buying a car in a high insurance group
Cars in high insurance groups tend to be more be powerful and so increase the crash risk.
Norwich Union run a Pay As You Drive scheme which uses a black box and GPS to monitor the young driver's car to find out when and how often it is used. The data is then used to set a rate per mile depending on the risk of accident. For example, if a car is only used in the day time when the accident risk is lower, then the rate per mile would be much less than if the car was frequently used to drive long distances at night.
Although it may not be suitable for all new drivers, it is a way of encouraging young drivers to stay out of dangerous situations by directly linking the situation to the insurance cost.
You can find out more information on the Pay As You Drive Website.
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