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1. What you can afford: You probably have set figure in your head of how much you can afford cash, or how much you can afford on Finance. This is fine but make sure you have considered all the other financial aspects of having a car e.g. road Tax, Insurance. Getting the money together to buy that all important, first set of wheels is really only the first hurdle. Young drivers can often find that the cost of insurance is as much as the purchase price of the car. The reason for this is simple - young drivers are a bad insurance risk. Close to 4,000 car drivers, under the age of 25, were killed or seriously injured in road accidents in 1997 - the most recent figures provided by the Department of Transport. Of these 2,790 were males and 1,154 were females. In total there were 14,876 fatalities or series injuries which means that the young account for 26.5% of the total. 2. Cost of Insurance: Back to top The cost of insurance is likely to come as a shock most young drivers. Admiral Insurance, a specialist in the younger drivers market, would charge a 17 year old male, living in a medium risk area, wanting to insure a 1998 Ford Fiesta 1.25 LX, on a fully comprehensive basis, £1,595. A female would have to pay £930. To insure a high performance car such as a 1992 Volkswagen Golf GTI would cost significantly more. A 17 year old male would have to pay £2,592 and a female would be charged £1,551. At 20, the premium falls significantly. A 20 year old man wanting to insure the Fiesta would have to pay £535, assuming two years no claims bonus, and the equivalent female, £419. The Golf driver, at age 20 would have to find £823 and a female, £644. At age 24, again assuming two years no-claims bonus, the premium has fallen still further. A male Ford Fiesta driver would have to pay £354 and his female counterpart £328. The premium on the Golf comes down to £447 for a man and £437 for a woman. Direct Line would charge a 17 year old male wanting to insure, fully comprehensively, a J registered Fiat Panda £699.92 and a female £564.72. If the same two drivers wanted to insure a VW Golf 1600 the premiums would be £1,250.08 and £1,008.80 respectively.
After age and sex, the model and size of car are the most important factors. Miranda Seymour, public relations manager at Direct Line said: "A big engine and a young driver are not a good combination. Steven May, communications officer at Admiral said: "It might be a good idea for young newly qualified drivers to go for a smaller car for the first few years until they have built up some no claims bonus Once they have a good driving record, they will find it much cheaper to insure their ideal car." No claims bonuses make a huge difference to premiums. After one year of claim-free driving, Direct Line, for example, offers policyholders a 30 per cent discount. This increases by 10 per cent each year until by year four, drivers are getting a 60 per cent discount. In year five, policyholders qualify for the maximum discount of 65 per cent. Mr May added: "Young drivers also need to go to the right insurer. Some insurers do not want to be involved in this market and therefore would not offer competitive quotes." Admiral and Privilege, an associate of Direct Line which specialises in non standard insurance, are two companies that operate in this market. Insuring third party is an option but obviously if you have an accident and your car is damaged, you will have to pay for repairs out of your own pocket. The premium for a 17 year old male with Admiral drops to £1,269 for the Ford Fiesta (compared to £1,595 fully comprehensive) and to £2,115 for the Golf (compared to £2,592).
Taking the Pass Plus examination can also help reduce premiums. This is a government backed scheme which aims to help newly qualified drivers to be safer and better drivers. The aim is to give experience of difficult driving conditions and the course covers both night and motorway driving. Admiral Insurance gives the equivalent of an extra year's no claims bonus to drivers who have sat the test. 5. Direct Insurers: Back to top Telephone-based direct insurers, such as Direct Line have been hugely successful since their launch. Direct Line has become the largest private motor insurer in the country with some 2 million policyholders and even rivals admit that it has set the standards that the rest of the industry has to follow. It is probably worth telephoning four or five direct insurers for a quote as well as a broker or two. However, you do need to think about whether cost is the only factor to take into account. Policies and the levels of service offered vary considerably, so look at the excesses on them. Some policies offer perks such as a courtesy car while yours is off the road being repaired or cheaper breakdown cover. Insurance is not the only cost a young driver has to consider. There is also the additional costs of running a car, not to mention petrol, oil, tyres servicing and repairs. 6. Annual Cost of Running a Car: Back to top Road Tax - £150. (As announced
in the Budget, owners of cars with engine sizes below 1100cc
will pay annual car tax of £100 from June, instead of
the new standard rate of £155.) 7. Car Information: Once you have found a car you can afford find out what the car is really worth, or get a review on it.
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