Young Drivers aged between 17 and 22 are, on average, quoted more than £1,200 to insure their cars. However, most quotes tend to significantly exceed this figure – Matt Church, 20, from Sale, Greater Manchester, was quoted as much as £11,000 a year to insure his 11-year-old Toyota Corolla which he inherited after his uncle died. After spending nearly £1,000 on obtaining his licence he felt that he was unlikely to be able to get his car on the road due to extortionate car premiums.
He then discovered pay-as-you-drive car insurance with Cooperative insurance. The policy operates by fitting a small black box into the vehicle which gathers information about driving habits and sends the information back to the insurer. Such pay-as-you-drive schemes are now offered by a number of other insurance companies. Matt initially paid £1,000 for his cover but premiums can be lowered or raised after just a few months as companies that offer these policies reward or penalise customers accordingly.
Due to his good driving record, Matt has received a rebate halving the annual cost to £500. Despite this, he has still been forced to dip into his student loan, sell clothes and gadgets on Ebay and borrow from his parents so that he can afford additional costs associated with getting his car on the road.
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