Beginner drivers face a financial dilemma, as the least expensive cars to insure are not always the cheapest to buy.
Many drivers pass their test aged 17, as soon as possible. But many are priced out of driving as insurers say they lack driving experience and are more likely to have an expensive accident.
This means they pay more in insurance costs.
The average motor premium for drivers aged under 24 was £1,095 a year in March, according to price comparison website CompareTheMarket.
The average premium for all drivers is £652.
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Ten cheapest cars to insure
Insurer Admiral worked out the cheapest cars to insure in the first three months of 2021.
In first place, it said the Toyota Aygo was the cheapest to insure at £641 a year, followed by the Fiat 500 and £682 at the Volkswagen Up! at £697.
The other cheapest cars to insure are the Citroën C1 (£699), Renault Clio (£741), Vauxhall Corsa (£808), Seat Ibiza (£824), Ford Fiesta (£842), Volkswagen Polo (£849) and Mini Polo (£941).
Clare Egan, head of motor product at Admiral, said: “Young drivers tend to pay more for their insurance because unfortunately they’re statistically a higher risk.
“They’re more likely to have an accident than older drivers and the accidents they have are more expensive.”
However, only three of the ten cheapest cars for young drivers to insure match the list of cheapest cars to buy, according to car sellers Autocar.
Ten cheapest cars to buy new
On the contrary, the three cheapest cars to buy are the Dacia Sandero – £7,995, Citroën C1 – £10,330 and Mitsubishi Mirage – £10,575.
Next up is the Kia Picanto (£10,995), Dacia Sandero Stepway (£10,995), Dacia Duster (£11,745), Fiat Panda (£12,025), MG 3 (£12,195), Toyota Aygo (£12,690) and Volkswagen Up! (£12,705).
This puts young drivers in a tricky position if they plan to buy a vehicle outright, either with cash upfront or over time with car finance.
The average young driver can save money on a new car, or on the insurance, but not both.
This seems contradictory, but it is because insurers take a lot into account when working out premiums, not just the value of the car.
Unfortunately it is impossible to know exactly what individual insurers think is risky when they are working out premium bills, as this is a closely-guarded secret.
However, the cost of insurance will always include the cost of the car, its group rating, where it is parked, repair costs and how likely the driver is to make a claim – including what job they do.
Cars that are the cheapest to both insure and buy are the Citroën C1, Toyota Aygo and Volkswagen Up!.
The Citroën is likely to be the best choice for those on a budget that still want a new car, as it is the fourth-cheapest to insure and the second-cheapest to buy.
But much depends on exactly what deal you can get on your car and insurance.
A lot also rests on if you are paying for a new vehicle or getting a nearly-new one second-hand.
How to save by buying a second-hand car
Buying a used car will mean saving money compared to getting a new one. However, there are things to watch out for to help you get a good price – and a quality car .
Firstly, remember to shop around, as prices for second-hand cars vary.
Don’t just think about well-known franchised dealerships, think about:
Independent car dealers
Private sellers – do any of your friends know someone looking to sell, for example
Anywhere else – you never know, you might see a bargain advertised in a newsagent’s window or local paper
Insist on a test drive, and ideally take an experienced driver with you too for a second opinion.
Before buying, make sure the seller has the car’s V5C registration certificate (aka the logbook), and it matches the seller’s ID.
This is the document the DVLA uses to record and store the car’s service history and important information.
It is also important to carry out a full logbook loan check (also known as an HPI check). You can arrange this for £19.99 at www.hpicheck.com.
It offers cover up to £30,000, and will tell you if a vehicle has any form of outstanding finance, if it’s recorded as stolen or if it’s been an insurance write-off.
If the car has an outstanding logbook loan against it, it could be repossessed even after it’s been sold to you, without warning.
Getting cheaper car insurance
To get insurance costs down, the trick is to put in the time shopping around to get the best deal, as prices can vary hugely across insurers.
It is also worth considering ‘black box’ telematics-based insurance, as this can seriously lower premiums.
This involves having a device fitted to your car to track how you drive and basing your insurance costs on that. Some versions work with just a smartphone app.
We’ve got a full guide on cheap car insurance tips, here.
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