Car insurers have been warned that if they don’t make motor insurance for young people more affordable, the car industry will suffer.
Vehicle telematics company Cobra said that if car insurance costs for young people don’t fall, fewer cars will be bought. It cited Department for Transport evidence which suggests that just 35 per cent of those aged between 17 and 24-years-old hold a driving licence. Of those that don’t hold a licence, 34 per cent said the reason was the prohibitive cost of insurance.
Cobra is urging insurance firms to switch to a model where insurance is calculated based on drivers’ behaviour, rather than their age and the type of car that they drive.
Young drivers typically pay higher insurance premiums because insurers calculate that they are more likely to have an accident. Recent research from AA Insurance Premium Index shows that a typical 17 to 22-year-old driver pays £2,493 for cover, compared with a £924 average across all age groups.
Cobra has called for insurers to fit cars with speed limiters, parking sensors and alarms to reduce premiums.
Andrew Smith, managing director of Cobra UK, told What Car magazine, "Manufacturers have to sit down with insurance companies to see how they can speed up the process of moving to a driver behaviour-based insurance platform.”
