Drivers who are just buying their first car must reckon with the fact that the purchase of a motor insurance policy will be associated with a relatively high expense for them. Whether you are still on your probationary driving license, or already a holder of a permanent driving license, during your first years of driving you will be bound to pay higher car insurance premiums. While this is inevitable, there are certain ways to lower the premium amount first-time drivers will have to pay. Today, motor insurance brokerage firm Kwiksure will share a few tips for reducing first-time driver car insurance.
Why is car insurance for new drivers expensive?
Insurance companies determine motor insurance premiums based on calculating the possibility of risk - therefore, newly qualified drivers are simply a bigger risk, due to their inexperience behind the wheel.
Besides that fact, the first-time drivers didn't have a chance to obtain any discounts yet. With the next years of accident-free driving, the young drivers will gain discounts, but initially, they do not exist, that's why the motor insurance premiums are higher.
Insurance for Probationary Driving License holders
In Hong Kong, any first-time driver will hold a Probationary Driving License for the first 12 months, before obtaining a permanent driving license. Whether first-time drivers can buy their first insurance policy, though, depends on their age. In Hong Kong, no insurer offers motor insurance to those below 21 years old and who are probationary driving license holders. Besides the age limit factor, car insurance premiums can be up to 150% higher to those on a PDL.
What can first-time drivers do to minimize their car insurance premiums?
In Hong Kong, all car owners must obtain by law at least the basic third party car insurance plan. As long as you are 21 years old, and want to drive and own a car, you have to secure the right car insurance policy. And while being classified as an inexperienced driver, or a first-time driver on probation will certainly cost you more, there are a few ways to go around it.
Wait three years
The moment you hit 3 years of owning a driving license in Hong Kong (one year for a probationary license, and two years of owning a full driving license), you can expect that your car insurance premiums will be lower. This is because drivers with less driving experiences are statistically more likely to be involved in a collision or commit traffic violations, so insurers need to charge more to defray the potential cost. Having said that, opt to purchase your first motor insurance policy at the age of 25.
Add an older named driver
Adding an older and experienced driver to your first policy can also offset the cost of your motor insurance premium. Here’s how it works: An insurer sees that another driver with a good track record of safe driving is using the same vehicle as the first-time driver, and it may lower the premiums. This is a good option for those new drivers that are going to mainly use the vehicle themselves.
Choose a car that's cheaper to insure
Insurers also calculate premiums based on the car. For lower insurance premiums on your first motor policy, choose a safe, economical car - one that's not too expensive and with a smaller engine. Insurers also look at the overall safety of the car, so either invest in your current car to make it more road-safe, or opt for car models that have a good record of safety on the road. Also, the age of the car plays a role when it comes to determining motor insurance premiums - expect to pay less for a 5 year old car compared to an 18 year old one.
Compare car insurance quotes
Compare multiple motor insurance quotes to see how much it might cost with different insurers and different variables. You can easily compare motor insurance quotes online here.
However, if it’s your first time doing so, consider getting help understanding your insurance options with an experienced motor insurance broker, such as Kwiksure. Our team has over 18 years of experience and will help you compare quotes, explain policy details, and help you choose the most suitable plan based on your requirements and needs. Contact us today for our free advice!