'Excellent' - customised cover for young drivers

Many young drivers are finding that the road ahead is closed as soaring insurance costs make it impossible to slide behind the wheel.

Many young drivers are finding that the road ahead is closed as soaring insurance costs make it impossible to slide behind the wheel.

Fierce competition between insurers may have kept a lid on overall car premiums during the past few years, but for young people - particularly those in their teens - they have shot up. The AA's insurance index reveals that a 17-year-old female driver can expect to pay an annual £3,072.15 premium - and her male counterpart £4,521.49.

The cost reflects the higher risk to an insurer, since less experienced drivers are more prone to accidents. In the UK, only one in six motorists is aged between 17 and 21, yet a quarter of all accidents involve people in this age group, according to the AA.

Fewer firms now offer cover to younger motorists, and those that do levy steep premiums. This, along with fuel costs, is discouraging youngsters from learning to drive at all, says AA spokesman Ian Crowder.

Figures from a Department for Transport survey show that the number of young people with a full driving licence has more than halved in the past four years.

Although this might all sound depressing to any youngster who's just passed their driving test, there are ways to put a brake on costs.

Norwich Union has just launched a pay-as-you-drive scheme for 18- to 21-year-olds that uses in-car technology to calculate premiums, based on when and how often they use their vehicle. On top of a monthly fee, drivers are given a tariff per mile that is individually tailored and based on risk factors including their experience, where they live and their accident record. This is further refined with different charges for "peak" and "off-peak" times.

For example, the tariff during the 6am to 11pm off-peak period could be 10p or less per mile.

However, driving in the 11pm to 6am peak period will cost up to £1 per mile because statistics show that younger motorists are at much greater risk of being involved in serious accidents between these hours.

Norwich Union's system includes a one-off £199 fee to install the "black box" technology but this could well be less than the savings to be made on premiums - as much as 30 per cent.

Another way for young drivers to cut their premiums is to complete the Pass Plus course, an initiative from the Government's Driving Standards Agency. This comprises six hourly sessions (both practical and theory), covering driving skills in built-up areas, out of town, different weather conditions, at night, on dual carriageways and on motorways.

It costs around £160 but many insurance companies will offer a discount on premiums of up to 30 per cent after completion. For example, without Pass Plus, an 18-year-old living in Gloucester and driving a four-year-old 1.4-litre Vauxhall Corsa will pay £3,027 for fully comprehensive AA insurance; Pass Plus reduces this to £2,105.

Other insurers offering discounts for young Pass Plus drivers include Royal & SunAlliance, Zurich and Direct Line.

It could also be worth adding an older person (usually a parent) as a named driver on a policy, because this can cut premiums by up to 15 per cent, says Richard Mason, director of the price-comparison website insuresupermarket.com.

Many young drivers might also consider avoiding insurance costs by becoming a named driver on their parents' policy, though premiums will still rise to reflect the higher risk.

Shopping around for at least five or six different quotes is vital, and Mr Mason stresses that drivers must give as much information as possible. For example, accurate mileage figures could keep costs down, as less time on the road should translate into lower premiums.