The Young Drivers' Guide To Car Insurance

Dec 14, 2020
Car Insurance
Travel Insurance
By Staff writer

With the number of car crashes each year rising, car insurance in NZ has never looked more appealing. Young drivers are especially at risk because they are less experienced, and are known to be a bit more reckless on the road than older drivers.

Unfortunately being a young driver often means more expensive car insurance. Fortunately for you, with the right online research and knowing a few hacks, you can find ways to make car insurance a little bit cheaper. 

Do I need car insurance?

The simple answer is no, as car insurance is not compulsory in NZ. However, if you’re a regular driver, you probably should get car insurance. Car insurance provides the reassurance that if you were to get into a car accident, you would be covered for damage, and the damage incurred to the other party.

If you’re a young driver, getting a car insurance also gives your parents one less thing to worry about. We understand that car insurance can be expensive and that when you’re young, spending that kind of money can be the last thing you want to do. But by comparing car insurance in NZ online, you'll surely get a much cheaper deal. 

You also need to consider how often you drive. If you only drive once or twice a month, it might not make sense to get car insurance if you’re confident on the road. On the other hand, if you’re driving almost everyday, then it’s a good idea to invest in car insurance. 

What affects the cost of car insurance for young drivers?

Before you get car insurance, it’s a good idea to know exactly what affects the cost of car insurance so that you know how to find a cheaper premium. Essentially, car insurance companies in NZ determine the premium to reflect the level of risk they have by signing you up. Here are a few things that can affect that risk and in turn, affect the cost of car insurance for young drivers:

Your driving history

If you have a history of getting into accidents, speeding, and you have other fines such as texting while driving and dangerous driving, then you could understand how this would affect the premium. It signals to the insurer that you’re probably not the most careful driver and they could think you have a higher likelihood of getting into a crash as compared to a driver who has a clean record. 

The type of car you have

If you’re into heavily modified cars or sports cars, then you’re in for a tough time getting cheap insurance.

The area you live in

If you live in an area where the crime rate is higher than average, your insurer will most likely increase the cost of the premium. This is to account for the risk that comes with living in an area with a high crime rate as your car is more likely to be stolen or damaged.


Tips for getting car insurance as a young driver

Consider the type of car you buy

As mentioned earlier, the type of car you have will affect the premium your insurer sets for your car insurance policy. If you haven’t bought a car yet, you should definitely keep this factor in mind. Instead of buying a sports car or a heavily modified car, you should choose a smaller, cheaper car for insurance purposes. 

Avoid making claims 

While making claims can save you money in the short term, in the long term it might lose you money as your insurer may choose to increase the premium of your car insurance policy due to the amount of claims you have. 

Put all of your insurance policies with one provider

Many insurance providers offer a multi-policy discount, where you get a discount off the cost of insurance when you have a certain amount of policies with that same provider. If you already have an existing insurance policy such as life insurance, travel insurance, or any other types of insurance, then getting car insurance from that provider could help you save.

Choose the right policy

There are three types of car insurance you should be aware of: comprehensive car insurance, third party car insurance, and third party, fire and theft car insurance. The type of car insurance you get depends on the circumstances. While having comprehensive car insurance can be great, it can be a hefty price to pay as a young driver, so you might be better off opting for third party car insurance or third party, fire and theft car insurance if you have a cheaper, older car. 

On the other hand, if your car is much newer and more expensive, then getting comprehensive car insurance could be a great investment as a car accident could cause you a lot more financial harm with a more expensive car. It ultimately depends on your situation, so you should have a good think about your needs before comparing the different car insurance policies. 

Consider asking your parents to add you on to their insurance policy

If you’re a first time driver then you won’t have a driving history, which means that your insurer could consider you as a higher risk and could make the insurance more expensive as a result. Because of this, a lot of first time drivers often ask their parents to put them on their insurance policy to make it cheaper. While this may be a short term solution to saving money on car insurance in NZ, eventually, you’re going to have to get your own car insurance. The sooner you get your own car insurance, the sooner you can start building a positive insurance history and then bring the premium down over time.

Another downfall of jumping on your parents' car insurance policy is that the policyholder must own the car. This means that if you were using your parents car then you could be added to their policy, but if you owned the car you were using then you wouldn’t be able to. In other words, you can’t just add yourself to your parents car insurance policy to get cheaper premiums.

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