Friday, April 8, 2011

Car insurance – making the student loan stretch a little further

Going to university or college is an exciting time. New experiences, new friends and new challenges make it one of the most rewarding periods of your life. But it’s also one of the most expensive, and with students increasingly worried about mounting debt and student fees, saving money wherever possible is vitally important. The price of running a car is also spiralling upwards, and one of the biggest costs is car insurance. So how can an impoverished student make their loan stretch a little further when it comes to running a car?

Get the insurance you need

It’s a sad fact of life for most students, but the ‘magic age’ for car insurance is widely regarded as 25. That means you’ll often have to wait until you’ve left university or college to see your insurance costs drop dramatically. But drivers under 25 can still get a good deal by shopping around and getting the car insurance that they need, rather than the insurance they’d like. Fully comprehensive may be out of your price range, but that still leaves you with two options – third party only and third party, fire and theft.

Of the two, the latter is preferable as it gives you greater insurance coverage. However, hunting around on the Internet is a great way of finding a package that may offer much more than you expected. There’ll also be handy tips and hints on how to keep your costs down. For example, if your car is garaged then obviously your premiums will be a lot less than if you leave it parked on the roadside. Look for insurance providers that offer special deals for younger drivers and even those who provide specialist insurance for students.

What kind of car are you driving?

Chances are it won’t be a Ferrari. However, even the cheapest little run around can be expensive to insure, so do a bit of research before you get on the road and find a model or make of car that’s cheap to insure as well as run. But bear in mind that your breakdown policy may only cover a certain number of roadside recoveries every year, so make sure that your car is reliable as well as cheap to run.

Team up

Students are used to sharing almost everything. Your digs, the fridge, even your washing powder. So if you’re sharing with friends, then sharing a car is a great way to split the costs between two people and keep your car insurance down. By becoming a named driver rather than the sole party on a car insurance policy, you can pay a percentage towards the insurance with your friend but still use the car when you need to.

Be honest with your insurer

Some people try and cut the cost of their insurance by ‘not telling everything’ to their insurer, such as their occupation or whether the car has been modified. This is a false economy and if you do have to make a claim and it’s discovered that you’ve been less than forthcoming with certain details, you may lose much more than the cost of the crash, as it can be considered to be fraud. Always be completely honest and open with your insurance provider, including the fact that you’re a student. It’ll work out much cheaper in the long run.

Finally, shop around. With online comparison sites now the most common way that people search for car insurance, there are plenty of providers offering great deals to younger or less experienced drivers. By going online and comparing insurers, you’ll get a good idea of what’s on offer and where to find the best deals.

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