Do you think car insurance is expensive for young people?

rudekid48

Here's the basics.

Young / inexperienced drivers crash more often than older / more experienced drivers. There is plenty of evidence freely available to back this statement up (google is your friend).

Young drivers frequently crash with a car full of passengers.

The engine size of a car makes no difference to the level of injuries sustained by four 18yr olds in a car when they hit a tree at 40mph.

There are circa 400,000 newly qualified drivers every year, if they were not high-risk then every insurer out there would be offering low premiums as they have a guaranteed new customer base every year.

The introduction of telematics (when used correctly) has been shown to reduce the frequency of accidents for drivers with less than 2 years driving experience by circa 40%.

Average premiums for young / inexperienced drivers using telematics have reduced from circa £2.5k to circa £1.3k over the last 3 years.

The largest increase to the cost of premiums for young drivers over recent years has been down to the increases in Insurance Premium Tax (from 5% to 9.5% and set to rise further) which disproportionately effects those that pay higher premiums.

The insurance industry has been actively lobbying the government to make telematics based policies for young drivers exempt from IPT for nearly 2 years.

The loss of income to HMRC would be more than offset by the reduction in accident frequency and the subsequent cost saving by not needing the emergency services to be involved etc.

The lobbying consistently falls on deaf ears with MP's because they see IPT as great way of raising additional revenue for HMRC.

The hypocrisy from "Parliament" is astounding. They could cut the costs of insurance for young drivers TODAY and at the same time make the roads safer by making telematics products exempt from IPT - but that would reduce their tax income so they will instead try to shift the spotlight onto Insurers to solve the problem.

Car_54

rudekid48 wrote: »

The largest increase to the cost of premiums for young drivers over recent years has been down to the increases in Insurance Premium Tax (from 5% to 9.5% and set to rise further) which disproportionately effects those that pay higher premiums.

It's many years since I studied maths, but I think you'll find the tax is exactly proportionate to the premium.

rudekid48

Car_54 wrote: »

It's many years since I studied maths, but I think you'll find the tax is exactly proportionate to the premium.

OK, if we're being like that.

The context of my post was that the financial impact of an increase in IPT is greater on someone paying £1500 for their premium than it is on someone paying £150.

The difference in risk hasn't changed - that is already reflected in the difference in premium before IPT is applied.

So let's go back to the theme of the thread; we have "Parliament" campaigning to reduce the cost of insurance for young drivers and yet it is the UK "Parliament" that has actually caused the greatest increase to their premiums in the last few years by doubling IPT.

It's also many years since I studied maths, but I'm pretty confident in saying that a 5% price increase on £150 is nowhere near as painful as a 5% increase on £1500....

Car_54

rudekid48 wrote: »

So let's go back to the theme of the thread; we have "Parliament" campaigning to reduce the cost of insurance for young drivers and yet it is the UK "Parliament" that has actually caused the greatest increase to their premiums in the last few years by doubling IPT.

Parliament is NOT campaigning to reduce the cost - some [STRIKE]plonker[/STRIKE] campaigner has petitioned Parliament, which is merely seeking views before [STRIKE]rejecting[/STRIKE] considering it.

AdrianC

Car_54 wrote: »

Parliament is NOT campaigning to reduce the cost - some [STRIKE]plonker[/STRIKE] campaigner has petitioned Parliament, which is merely seeking views before [STRIKE]rejecting[/STRIKE] considering it.

And here is the petition in question, with the official government [STRIKE]rejection[/STRIKE] response...
https://petition.parliament.uk/petitions/166847

[Deleted User]

I wonder if it would have got any further if he'd bothered to check his spelling and grammar first?

rudekid48

Car_54 wrote: »

Parliament is NOT campaigning to reduce the cost - some [STRIKE]plonker[/STRIKE] campaigner has petitioned Parliament, which is merely seeking views before [STRIKE]rejecting[/STRIKE] considering it.

I stand corrected - that'll teach me to read things properly

My points still stand though

Clucky

I've not read all the comments, but I find myself trying to find realistically priced car insurance for my newly passed 17 year old son. He's passed in just 20 hours of lessons, along with tutoring in the family car given to him by his grandparents. I managed to buy learner driver car insurance for £83 for a month through Marmalade, but can't find insurance for him for less than £2k.

And why should insurance companies not be capped? And why should over 25s have their insurance affected because of a cap? License to print money me thinks!

:mad:

tberry6686

look at motor insurance company profits and then think again.


Car insurance is a highly competitive business and as such profit margins are low.


Cap young drivers insurance costs by all means, but don't be surprised when no company will insure them.

rs65

Clucky wrote: »

And why should insurance companies not be capped?

Who is going to pay for the difference between the cap and the cost of the risk?