Insurance cycle: Learner

For most young people, buying that first car is like a passport to freedom. No more reliance on the oldies to get about; suddenly you?re at liberty to go as far and as often as a tank of fuel will get you.

Unfortunately, along with independence comes responsibility and not just too obvious strictures like the road laws. Car ownership also involves some form of insurance against damage to your new pride and joy, yourself and other road users.

And the costs of car insurance for younger drivers can be much higher than for the average experienced car owner.

Insurance companies don?t like risk. The greater the chance of a person causing a crash, the higher the probability the company will have to make a payout, so higher-risk drivers have to pay for that via increased insurance premiums.

And there?s no doubt that younger drivers are a greater risk than older ones. Under-25s feature disproportionately in road fatality statistics, and one insurance company?s research has shown the average cost of an accident claim is 50 per cent higher for that age group.

Okay, so if you?re young, premiums are generally higher so what are the best ways to minimise the cost?

The type of car you buy is important. Quite apart from those banned by state authorities for learners and P-platers (including V8s, or those with high-performance turbo or supercharged engines) there are those which attract lower insurance premiums.

We?re talking about cars that are cheap to repair or replace, meaning either older and more common second-handers, or the less expensive newbies.

As a driver, you may lust after a used six-cylinder BMW or Alfa Romeo and be able to afford to buy it, but if parts are rare or expensive, and the insurance company sees it as a rather risqu? choice they?ll penalise it with higher premiums. Sadly, that reliable 10 year-old Corolla might be the wiser choice.

If you choose something old and inexpensive, it might not be even worth going for more expensive comprehensive insurance.

hird-party, theft and fire insurance covers other road users and calamitous events other than accidents; if the car is damaged in a prang, the cost of repairs falling on you and not the insurer might be a lot less than the actual premiums.

Shop around. Some insurers are more youth friendly ? some even have divisions catering specifically for younger drivers ? and it pays to compare quotes. They can vary by hundreds or possibly thousands of dollars.

Do your best to prove that just being young doesn?t mean you?re a risk. Keep a clean driving record to indicate not all young drivers are idiots.

Look for insurance companies offering discounted premiums for customers who complete a defensive driving course. If your car is regularly garaged and less prone to theft, find an insurer who will reward that with lower premiums.

And think carefully before modifying a car. Even if the mods are legal, the more conservative insurers see fat wheels, rear wings or engine tweaks as indications your car is more than just boring old transport but a possible insurance risk.