Do you think car insurance is expensive for young people?

dannyrst

takman wrote: »

So this means that any cap on insurance prices would have to subsidised by the government. If the government decide to go down this route then it would be much better for them to put more money into public transport instead as this benefits far more people.

The correct thing for the government to fund would be automated cars and driverless cars. Insurance as we know it will be a thing of the past.

Norman_Castle

AdrianC wrote: »

So somebody who can't afford a hundred and fifty quid a month is going to be willing and able to tie up ten grand in a bond...?

I didn't suggest it would be an option for everyone.

Car_54

phoenix_w wrote: »

A limit on engine power output is more sensible.

A limit on power/weight ratio is more sensible still.

Herzlos

Norman_Castle wrote: »

What about cheaper insurance for drivers willing to self insure the first 1-10K? of any accident claim. This could be held in a bond similar to rental deposits.
I expect having to pay a substantial amount for the damage caused rather than relying on insurance would help reduce accidents.

Realistically that's what they do anyway, as you'd be nuts to involve the insurance for under £1000 of damage even if you didn't have £800+ in excesses.

dannyrst wrote: »

The correct thing for the government to fund would be automated cars and driverless cars. Insurance as we know it will be a thing of the past.

Or to make public transport, well, usable.

leslieknope

i only recently learnt to drive at 28 so my insurance, while far more expensive than my friend's, is fairly cheaper than if i had been a driver long ago.

i do agree there needs to be some incentive for them not to speed around and get into lots of accidents. but i disagree that driving isn't needed - i see more and more jobs nowadays that require you to drive including apprenticeships which are aimed at young people and don't pay that well. how are they expected to cover all the costs on that low salary? employers don't want to pay more, insurance companies want their profit... something has to be done.

i would suggest making insurance cheaper for small cars that aren't modified - i've got a little 1.2 engine and this suits me fine. but keep the high insurance if they choose to go with a bigger car and start making silly adjustments. keep an excess for this cheaper insurance of 200-500 to further discourage silly driving.

Joe_Horner

takman wrote: »

The profit margin of the large insurance company companies are freely available online and they show that when the make a profit it is only a very small margin and if they reduced their prices they would be loosing money

Really?

Again going by Admiral Group sering as I happened to ne looking at them, for H1 this year they posted anpre tax profut of just ove 15℅ on turnover. That's not a "small margin" for any reasonable definition of small in such a high turnover business. For comparison, Tesco over the same period posted a profit of just 2% on turnover and called it a strong start to the year.

Like the poster above said if prices were artificially increased a new company could easily come in and undercut everyone.

That assumes that a company with the financial resources to enter the insurance market as a brand new player (so would almost certainly already be in the financial sector) would have any interest in rocking the boat - not something the financial sector is exactly known for

almillar

Third party only cover.

This SHOULD save money, but no longer does (much anyway) - the driver is the big risk, and not insuring your own car still leaves plenty of other costs for the insurance co. to pick up.

Minimum, standardised, premium for those with zero claims - let's say £250 for arguments sake - regardless of lack of history.

I like this one. Wonder how much it could go down?

Limiting engine size, limiting speed,

A limit on engine power output is more sensible
A limit on power/weight ratio is more sensible still.

Is going to have minimal impact - Any new car on the road can easily break the national speed limit, and limiting the car's top speed will just make people drive fast where they should't. It's not the same as motorbikes.
These people have just passed a test demonstrating 'a certain set of skills'. Insurance now is such that smaller, slower cars are already cheaper to insure than faster ones. That just makes it so much more unlikely that young people will be driving fast cars.
And anyway, you don't have to drive anything like a fast car to have a crash.

takman

Joe_Horner wrote: »

Really?

Again going by Admiral Group sering as I happened to ne looking at them, for H1 this year they posted anpre tax profut of just ove 15℅ on turnover. That's not a "small margin" for any reasonable definition of small in such a high turnover business. For comparison, Tesco over the same period posted a profit of just 2% on turnover and called it a strong start to the year.

That assumes that a company with the financial resources to enter the insurance market as a brand new player (so would almost certainly already be in the financial sector) would have any interest in rocking the boat - not something the financial sector is exactly known for

The figures I have seen for car insurance have been alot lower than that but let's assume they make 15% profit on every policy. So on a £2500 policy as mentioned in the OP without the profit it would still be £2125 which is nowhere near the £1200 limit that they are asking for!.

I also disagree about companies not wanting to "rock the boat" just look at the banking sector. They are paying people cash awards to switch to them, money each month to stay with them and the best interest rates are on current accounts. None of this was happening 10 years ago so the boat was definetly rocked when the first switching incentive came to the market.
If there was a chance to seriously undercut other insurance companies then with comparison sites being used by so many a new company would have no hesitation in joining the market.

takman

The only real way to reduce insurance price is to get the bad drivers off the road BEFORE they cause an accident.

-So we need more traffic police stopping people who drive dangerously and prosecuting them before and not just reacting after they cause an accident.

-Regular retesting of all drivers to make sure they meet the latest standards of driving every so many years.

Plus like the poster said heavy investment put into driverless cars and the government changing laws to allow their use (which is currently happening). Just imagine how cheap taxis and buses will be if they don't have to pay drivers, they will also be able to run 24 hours a day 365 days a year to meet demand.

Tinks74

Forgive me, but I cannot see that anyone has addressed the issue of claim payouts, for instance the astronomical price of hire cars provided by/on behalf of insurance companies, that can cost thousands of pounds for a few weeks which could be provided much cheaper by a normal car hire company.

A close friend was provided with a courtesy motorcycle after an accident, as the bike was their only vehicle, the cost for that vehicle hire for 6-8 weeks was £8000, a brand new bike could have been purchased by the insurer, been given to my friend to use for the same period and sold on afterwards and the total cost would have been less than £8000.

I appreciate that there are some people who need to have particular types of vehicles either for their job, family size or possibly a disability, but in the event of an accident where a car is either written off or damaged and requires repair the vast majority of people do not need a car of the same specification with all the same bells and whistles as the one involved in the accident, a car to enable you to get on with your day to day life is perfectly sufficient as a temporary measure, which is exactly what it should be.

When payouts include artificially inflated claims for such things it is easy for the insurance companies to claim that payouts are going up!