Car Options for Young Drivers

As a young driver, getting your first set of wheels can be incredibly exciting. A car isn’t just something that can get you from A to B, it can also represent a sense of freedom you didn’t have before! But unfortunately buying your first vehicle, alongside all the associated costs, can be expensive.

The main two costs are the car itself, and the insurance. Young drivers can find it more difficult to get vehicle finance, and probably won’t be offered the cheapest insurance out there. However, there are things you can do in order to make these things less expensive. To help you get started, we’ve provided three tips for getting cheaper insurance and car finance respectively – young drivers needn’t pay more!

Young Drivers Insurance

When it comes to insurance, it’s pretty common for insurance companies to charge young and recently qualified drivers more. This is because you’ve not yet had a chance to prove that you are a responsible driver. So are there ways to reduce your insurance costs?

The simple answer is yes, though it will depend on a number of factors. You may also have to accept some limitations in terms of how far you drive, and at what times. We’ve explored the top three ways in which you can potentially get cheaper insurance as a young driver below:

1. Consider the Make and Model

When you’re buying your first car, it can be incredibly tempting to get the fastest on the market, with a huge amount of horsepower. But these types of vehicles are usually much more expensive to insure. So if you’re looking to save money, the best thing to do is opt for a lower performance model, with less horsepower.

Before purchasing the vehicle, it might be sensible to get a rough estimate of the insurance costs associated with that make and model. You should be able to get an insurance quote before you actually buy the car, through comparison sites like Compare The Market and  MoneySuperMarket.

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2. Add an Experienced Driver to Your Policy

This is something that a lot of people do already – by adding a more experienced driver to your insurance policy, you will usually reduce the cost. They should not be listed as the main driver of your vehicle though, just a named driver.

The legal guidelines state that the main driver listed does have to be the primary driver of the vehicle – providing another name is considered to be fraud. This is known as ‘fronting’, and if your insurance provider found that you had done this, they would cancel your policy and may refuse to pay out any claims. They would also have the option of taking legal action against you for fraud.

3. Consider a Black Box

You may have heard of black box, or telematics, insurance, and it is typically used by younger drivers. The idea is that you agree to have a black box placed in your vehicle, which uses GPS to monitor your driving. There may also be some restrictions, such as having a curfew and not driving too many miles in one day. The reasoning behind this is that more accidents happen in the dark, and when the driver is tired. So if you’re not behind the wheel in those circumstances, you should be less likely to be involved in an accident.

A black box will undoubtedly encourage safer driving, and will hopefully reduce your insurance costs. It does come with downsides though, like the restrictions mentioned above, so you will have to carefully weigh up your options. Consider the pros and cons of black box insurance, and determine whether it’s the right choice for you.

Young Drivers Car Finance

Just like with car insurance, it can be more tricky to get vehicle finance as a young person, and for similar reasons. In the same way that you’re unable to demonstrate that you are a responsible driver without a lot of experience, younger people tend to have less credit history too. Your credit history is what lenders look at when making a loan decision, to see whether you’re able to manage your money well.

However, as with insurance, there are ways in which you can overcome a lack of credit history. You may still be eligible for car finance as a young driver – we’ve looked at three things you can improve your chances below:

Car Options for Young Drivers

1. Check Your Credit Score

Your credit score is a number that is calculated from details on your credit report. It helps lenders get an idea of how you manage your money, as things like missed or late payments will be taken into account. The problem is, a lot of younger people don’t have much information on their credit files, so loan providers won’t have much to go on when they are assessing your application.

To improve your credit rating, and potentially increase your chances of getting a vehicle loan, there are a few things you can do. For example, taking out credit, such as a credit card or personal loan, can actually boost your credit score, as long as you make the repayments on time. This will demonstrate to lenders that you can stick to a credit agreement.

Another thing you can do is register on the electoral roll. This will prove that you’re a UK resident, and will help verify other information on your credit file.

2. Review Your Income and Expenses

In terms of your budget, lenders need to know that you’re able to comfortably afford the due repayments. So you will need to have a regular income – usually of at least £1,000 per month – and your expenses shouldn’t be too high. It’s a good idea to look at your monthly budget before applying for vehicle finance, to ensure that you can definitely afford the instalments.

It’s also sensible to use a car finance calculator prior to making an application, so that you can get a rough idea of how much the monthly payments would be. Our car finance calculator is simple to use, and won’t impact your credit score.

3. Consider Using a Guarantor

Another thing to consider when it comes to young driver car finance is using a guarantor. A guarantor loan is where someone – usually a close relative such as a parent – agrees to make the payments should the borrower no longer be able to do so. A guarantor means that there is less risk for the lender, so they are more likely to accept a loan application.

The thing to bear in mind with guarantor loans is that your guarantor will become financially linked to you. So if the payments are missed, both your credit ratings will be impacted. You would need to discuss this in greater detail with your potential guarantor, to ensure that they’re happy to take on the responsibility.

Young Driver Car Finance With Vehicle Finance Today

If you are looking to take out a vehicle loan, Vehicle Finance Today can help! As long as you’re aged 18 or over, live in the UK, and are earning at least £1,000 per month, you can make an application using our services.

We’ll compare car finance lenders for you, and try to put you in touch with a suitable lender. If approved, you could be driving away in your new set of wheels in just a few days! Apply with us today with no impact on your credit score!

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