DEALS ON WHEELS
Young drivers face eye-watering costs to pay for the pleasure of owning – and maintaining – their cars. So plug in your satnav and follow our route to the best…
KEEPING a car on the road as a young driver is no mean feat, with the average annual cost of motoring for under-25s now standing at a hefty £3,435. Indeed, some 20 per cent of under35s now spend as much on their car’s monthly payments as on renting a home.
While a recent fall in fuel prices has offered young drivers a little respite, other costs – such as eyewatering increases in insurance premiums – remain a major financial burden.
New figures from the Association of British Insurers reveal that motorists currently face the biggest hike in insurance premiums since records began. Premiums are up 11 per cent year-on-year, with younger drivers facing the biggest hikes. Many young drivers are now paying £1,000 or more for their car insurance.
Here we look at some of the ways young drivers can drive down the high cost of motoring.
CHOOSE AN INSURANCE FRIENDLY MOTOR
IF YOU are buying a car, choose a model with low fuel consumption, reduced vehicle emissions and one that is in the three lowest categories for insurance pricing purposes.
Matt Oliver, of comparison website Gocompare, says: ‘Young drivers’ insurance premiums are more affordable if they drive a standard car with a small engine – under a litre – and which is in a low insurance group.’
Insurer Admiral recently carried out a study of the cheapest cars to insure for drivers under 25. It found the top five models to be the Volkswagen Fox, Nissan Qashqai, Fiat 500, Citroen C1 and Fiat Panda. You also need to think about safety issues. Recent research found that only a third of young drivers consider this when choosing a first car – with their main priorities being the price of the motor, the cost of insurance and whether it is cheap to run.
James Hillon, from Co-op Insurance, says: ‘Given that almost a third of young motorists are involved in a traffic accident in the first six months of driving, they should not compromise on safety.’
The insurer has compiled a list of the safest used cars for young drivers, priced at under £5,000. It puts the Skoda Citigo top of the list, followed by the VW Up!, the Seat Mii, Toyota Yaris and Kia Rio.
CONSIDER ALL FINANCE OPTIONS FOR YOUR CAR
WHEN working out how to finance your new set of wheels, beware of costly forecourt finance deals.
Recent reports warn that young drivers are being tempted into dangerously high levels of debt by car dealers offering big loans.
While ‘personal contract purchase’ can seem appealing, motorists are then committed to expensive monthly payments.
James Walker, of consumer rights website Resolver, says: ‘Many personal contract purchase agreements are complex and being missold. It is vital you are not pushed into signing up on the spot to such a loan without fully understanding the implications.’
As forecourt finance options can be complicated – and often costly – it is worth considering other routes such as a low-rate personal loan or a zero per cent credit card. The key is to do the maths to ensure the purchase is affordable.
TRACK DOWN CHEAPEST FUEL
AN EASY way to cut your spending at the pumps is by visiting website Petrolprices to find the cheapest place to fill up locally. As a general rule, supermarkets offer the lowest prices. Before filling up, look out for discount vouchers and if possible pair these with a card that offers rewards on your spending. Also try driving more economically. Figures from the AA show that cruising at 80mph will use 25 per cent more fuel than driving at 70 mph. Savings can also be made by letting your car slow down by itself rather than braking heavily. Fur-
ther savings can be made by clearing out the boot, removing the roof rack and ensuring your car is serviced regularly.
Ian Crowder, of the AA, says: ‘Check your tyres regularly to ensure they remain in good condition and properly pressured. Soft tyres increase rolling resistance and increase fuel consumption.’
THE CAR CLUB ROUTE
IF YOU cannot afford to own a car, a car-club or car-share service may prove a good alternative.
With peer-to-peer car-sharing platform HiyaCar, you can rent cars from people in your local community.
Simply log on and search for vehicles in your area – then contact the owner via instant messaging. All cars must be insured, taxed, and have a valid MOT.
In addition to the rental cost, you pay a £3 booking fee and the cost of insurance. Cover starts from around £6 per day.
Rob Larmour, co-founder of HiyaCar, says: ‘We want people to think twice about buying a new car.
‘We want them to assess whether they really need a car all the time and if they could just as easily borrow their neighbour’s vehicle.’
HiyaCar has just launched keyless mobile technology which means there is now no need to pick up a key.
Members simply download the app and can then use their mobile as a multi-purpose tool for car hire. Also check out Zipcar and Easy Car Club. If you are interested in carpooling, you can search for someone making the same journey as you through websites such as Blablacar and Liftshare, and split the cost of fuel.
Elsewhere, Sharemine is set to launch an online tool next month which you can use to create a carsharing community.
...AND EVEN RENT OUT YOUR VEHICLE
ALTERNATIVELY, if you have a car but leave it sitting idle on the road in front of your home for large periods of time, you could make a bit of money from it by renting it out.
You can do this through HiyaCar and Easy Car Club. To get started on HiyaCar, simply make your own profile and list your car – all for free. You then pay a 30 per cent commission each time you rent it out. While the firm will suggest guide rental rates when you sign up, you can set your own.
Comprehensive cover is offered to car owners via Axa Insurance. If your vehicle is damaged, the policy will cover 100 per cent of the costs – and will not affect your current personal insurance policy in any way. If you are making money from your car, you need to declare this to Revenue & Customs.
If buying a car with a finance scheme check your provider is happy for you to proceed.
Young driver Edward Turay, from Battersea, South-West London, hires out his car when he is not using it to earn extra income.
The 25-year-old signed up to HiyaCar just under a year ago, and has already earned around £2,000 from his Vauxhall Corsa.
Edward, who works as a project manager and also as a part-time games designer, pays between £20 and £40 a week for petrol and £1,000 a year for insurance.
He says: ‘I do not need my car for my commute as I go by public transport, so it is unused a lot of the time. Renting it out is an easy way to make some extra cash.’
On average, Edward tends to rent out his car at least once a week, mostly at the weekend.
He adds: ‘During the summer, I get lots of bookings as people need to travel to weddings and other family gatherings. I charge between £30 and £35 per day.
‘Initially, I was quite nervous about renting out my car to strangers. But I have had no really bad experiences and on the rare occasion when there has been an issue, HiyaCar has stepped in to resolve matters.’