Insuring Your First Hot Hatch
As young drivers we all dream of owning a fast car, and a hot hatch represents the cheapest route to high performance. However, while there’s a lot to be loved about hot hatches there are also a few downsides. For a start there are the running costs, which tend to be higher than the more mundane models in the range, and there’s one cost that can be particularly painful – your annual insurance bill.
For young drivers the price of that essential piece of paper is by far the biggest annual cost, and in extreme cases the insurance bill can work out as more than the value of the car. How so? Well, if the accident was your fault your insurer has to cover the repair bill for your mangled pride and joy, damage to other cars, injuries and compensation to those involved, and repairs to any road signs or garden fences that you might have flattened.
Insurers have to take all of these factors into account, and because you’re young and driving a performance car it makes the prospect of an accident more likely, according to statistics. So what measures can you take if you’re looking to get cheap car insurance for your hot hatch?
Take The Pass Plus Test
For many young drivers passing their test is a ticket to freedom, but what’s the point if you can’t afford to insure the car? One way to improve matters is to take some extra driving tuition and one of the most popular courses is the Pass Plus scheme, run by the Driving Standards Agency.
You have to take the Pass Plus course within 12 months of passing your test, but it’s worth doing. Most insurers will recognise this qualification and offer reduced premiums in return. For a newly qualified driver the reduction in premiums could be as much as 30%, a saving that should more than cover the cost of the course.
Pay In One Lump Sum
So you get your quote and it’s going to cost £1,000 to insure your hot hatch for a year, but you can pay as little as £95 a month on direct debit. Sounds like the monthly payments are the option to go for?
Well, no, they’re not! If you really want to save money just do the maths and check the small print. The convenience of paying monthly will cost you in the long run as a credit fee will be added to your premium, usually in the region of 10-15%. If you can afford to then make sure you pay your premium in one go, because that credit fee is better off staying in your pocket.
Increase Your Excess
Your insurance policy will have an excess amount, which is a value that is deducted from the payout on any claims you make. This is made up of a compulsory excess that varies depending on your age (younger drivers attract a higher excess) and a voluntary excess, where you choose how much of the claim you’re going to pay.
If you specify a high voluntary excess it tells the insurance company that you won’t be making any frivolous claims and they should reward you with a lower premium. Ask them for a quote with and without the voluntary excess and you should see a difference. Just don’t forget that whatever excess you choose will get knocked off any claim you make.
Start Off Slowly
It might seem strange for a website about fast cars to recommend buying a slow car, but just bear with me for a minute.
If you’re a newly qualified driver and are lucky enough to have a couple of grand to spend on your first car you could spend £500 on something really quick but quite old, and then have to fork out the rest on insurance.
Alternatively, you could spend £1,500 on a newer but slower car that will cost less to insure. While it might not sound very exciting, the money you save on the insurance bill could be put aside for a couple of years, while at the same time your no claims discount will be building up (if you keep yourself out of trouble).
After a couple of years you’ve got a few hundred quid stashed away, as well as 30-40% no claims discount. Now you can go out and get a much better hot hatch than you would have had!
Work Out Your Mileage
Your annual mileage is a big factor in working out your insurance premium. It’s obvious that the more mileage you do the higher your chances of being involved in an accident, so before getting any quotes just work out how much mileage you might cover in a year. You may be tempted to quote a high figure just to be on the safe side, but that could inflate your quote more than you might expect. Don’t forget to add a little on top (10-15%) in case you go on any unexpected long journeys … a road trip to the Nurburgring, perhaps?
Whatever you do, don’t deliberately lie about your mileage – in the event of a claim the insurance companies can check your car’s odometer against its last MOT certificate to work out just how far you’ve driven!
Wait For Your Birthday
If you’ve just passed your test and you’ve got some money burning a hole in your pocket, the temptation to rush out and buy a car might be too great. But just hang on for a minute and work out how long it is until your next birthday.
Depending on how many weeks you’ve got to wait and how patient you are, it could be worth hanging on until your birthday to get that first insurance policy. By being a year older you could be rewarded with a lower insurance premium, simply because you fit into a slightly lower risk group. Think about it from an insurer’s perspective – would you rather insure a 17-year old or 18-year old?