The Impact of Your Driving Record on Car Insurance as a Young Driver

Whether you’ve purchased your first car or received one as a hand-me-down, getting it registered under an insurance plan under your name is a crucial step.

For one, it’s a mandatory law in New Zealand to equip all vehicles operating on public roads with a car insurance policy. Besides that, vehicle insurance is also beneficial because of the financial protection it provides drivers, which can help in case of emergencies.

That said, you have to pay monthly premiums to be eligible for financial compensation, and for younger drivers, the amount you’ll have to spend for premiums falls slightly above the range than those aged 25 years and above.

Moreover, the final insurance quote is influenced by a combination of different factors, such as your driving record. If you want to bring down the cost of your car insurance, you need to convince your insurer that you’re a safe driver to work with.

In this article, we’ll explore how your driving behaviour can impact the final rate of your car insurance. We’ll also dive into ways you can keep your car insurance quotes low.

Let’s jump right into it.

Factors That Influence Car Insurance Prices

If you’re under 25, you’re already at a slight disadvantage when it comes to finding affordable car insurance deals.

The 18-25 age range is associated with speedy driving and limited experience behind the wheel. This means you’re deemed a high-risk driver to many car insurers. As a result, these companies will offer an expensive quote, typically higher than that of an older person with a similar profile and coverage needs.

Furthermore, if you already have a track record of violations, this can also contribute to an even more expensive insurance premium. Insurance companies assess your profile and driving history as a whole to determine a quote that reflects the level of risk they’re assuming by insuring you.

If you’re wondering what other factors influence your car insurance price besides age and driving history, here are some additional ones to take note:

• Vehicle model and make: Luxury brands, electric vehicles, sports cars, and expensive models will cost more to insure due to either more specialised parts or a higher risk assessment.
• Location: The community where you’re driving around will influence the price of the car insurance. Towns with lots of mountain roads, high-traffic locations, and high-crime areas will generally be priced higher than low-risk areas.
• Mileage: Insurers will price your insurance depending on how frequently you drive each year and the types of roads you typically travel on.
• Credit history: Insurers may also assess your financial standing, particularly your ability to pay back your dues on time. This helps eliminate some of the risk on their part of a late-paying customer.
• Coverage level: If you want to include more comprehensive coverage for your policy, the price of your insurance policy will naturally increase to accommodate these add-ons.

Knowing these factors can help you make the right decisions when you shop for policies. Finding youth-specific insurance policies can also be a good way to get a good-value policy, such as ROLLiN’s comprehensive car insurance for young drivers.

How Your Driving Record Influences Car Insurance Price

Your driving record greatly contributes to your final insurance quotation. This is because this informs insurers how prone you are to accidents and other violations on the road.

If you have a long history of accidents and traffic violations, the quotation will naturally be priced higher than average to reflect this increased risk. Couple that with a young age, and you’re likely to pay a high amount due to the presence of all these factors.

Insurance firms can monitor and track a driver’s history records by looking at their state transport authority’s website.

For instance, insurers servicing car owners based in Victoria would look at VicRoads for relevant driver data such as suspensions, demerit points and offences.

On the flip side, NSW-based firms would contact the RMS department of Service NSW for this information. In New Zealand, the equivalent is sifting through data in the Waka Kotahi NZ Transport Agency.

Some driving behaviours that can negatively impact a driver’s insurance policy price, if caught and ticketed, include the following:

• Speeding
• Distracted driving
• DUI
• Reckless driving
• Failure to yield

In addition, if you have incurred multiple violations and tickets throughout your driving history, even if they’re just minor offenses, then this could raise the premium requirement even further.

In some extreme cases, it’s not uncommon for these insurers to outright reject your application if it’s tainted with multiple violations. It may take three years or more for these violations to be removed from your name, depending on where you live in Australia and New Zealand.

How to Reduce Car Insurance Premiums as a Young Driver

If the high price of premiums is pushing you away from driving, then we have some uplifting news. The opposite is also true—a clean driving record can potentially lower the price of your premium.

Besides maintaining a clean driving record, there are a few more ways young drivers can lessen the price of their insurance policy. Here are some ways to do just that.

1.   Avoid Driving Distracted

Distracted driving is one of the leading causes of accidents on the road. As much as possible, refrain from fumbling with your phone when behind the wheel. Avoid eating and drinking too, as even a momentary glance off the road can have consequences.

In a similar vein, refrain from driving when sleepy or fatigued. If you feel like you’re about to sleep, then park on the side of the road and take a 15-minute breather. Alternatively, get someone else behind the wheel while you rest up. Don’t try to push the accelerator if you feel like you’re about to doze off.

2.   Look into Insurer’s Incentives Program

Some insurers will provide a cool 5-10% discount to people who demonstrate a good regard towards safety.

For example, ROLLiN has a Safe ‘n Save program in their app that provides generous discounts to young drivers who meet a minimum policy safety score in their monthly policy. The scoring is done through the driver’s smartphone’s GPS and gyroscope features, tracking movements such as braking, phone use, and turning speeds.

Other insurance firms also provide unique incentives, with some offering 10% discounts if drivers complete an in-house safety driving course.

In any case, you can consider applying for these programs to reduce how much you’re spending on monthly premiums for your car insurance.

3.   Drive Less, Choose Cheap

If you can show insurers that you’re not taking up space on the road, then you can score a cheaper premium.

This means two things. Firstly, driving a popular, budget model with a high safety score can help you reduce the cost of your premium. These vehicles are more affordable to repair and less likely to be involved in serious incidents, making them a safer bet in the eyes of insurers.

Secondly, driving at a lower mileage can also help reduce your insurance price. Less time on the road, less likely to be the subject of a road accident. This is ideal for insurers, and they’ll be happy to secure a customer like you at a discounted price.

4.   Negotiate Your Contract to Fit Your Finances

Everyone has different financial priorities when it comes to insurance.

Some drivers prefer paying higher monthly premiums in exchange for a low deductible when making a claim. Others may opt for lower premiums with a higher deductible to save money month-to-month, accepting more risk in turn.

It’s crucial to evaluate your financial situation and pick the option that provides the best balance for your life. Insurers may be willing to adjust their contract to your liking, and if they don’t, then you can simply hop on to the next provider and pitch your case.

5.   Compare Quotes from Multiple Insurers

Car insurance doesn’t have a fixed price. It varies from person to person, depending on their profile and the insurer’s inside formula, among many other things.

To find the actual best deal in the market, it’s a good idea to evaluate the insurance deals of the many insurance companies around you. Shop around and compare quotes.

Don’t settle for the cheapest insurance in the market. Instead, look at what each provider offers and if the offering is suitable for its price point. By comparing insurers, you can have peace of mind in choosing the actual best deal in the market—which can be crucial in keeping your wealth in check in the early stages of your professional life.

We hope we’ve cleared everything for you!