Representative Example: You could borrow £10,699 over 60 months with an initial payment of £495.89 (including £199 Admin Fee) followed by 58 monthly payments of £296.89 with a final payment of £495.89 (including optional £199 Option to Purchase Fee). Total amount repayable will be £19,012,40. 26.1% APR, annual interest rate (fixed) 13.3%.
How Insurance Works for First-Time Drivers
If you're a new driver thinking about getting a car on finance, it’s important to understand how car insurance works. Insurance can be one of the biggest costs for new drivers, especially if you’re under 25 or have just passed your test. Whether you're thinking about HP car finance, buying a used car, or just getting on the road, knowing the basics of insurance is a must.
Car insurance is usually more expensive for new drivers because insurers see you as a higher risk. With little or no driving experience, you're more likely to be involved in an accident. This means the insurer might have to pay out more, so they charge higher premiums.
Your age, the car you choose, where you live, and your driving history all affect your price. If you’re under 25, this can push the cost up even more.
Some cars are cheaper to insure than others. If you’re thinking about financing a car, check insurance prices before you choose your vehicle. New drivers can end up paying more for insurance, but choosing the right car and policy can help reduce the cost.
There are three main types of car insurance you can choose from: third party, third party fire and theft, and fully comprehensive.
Many new drivers think third-party is the cheapest, but that's not always true. Sometimes, fully comprehensive insurance can cost less and give better cover.
If you're financing a car, your lender may ask for fully comprehensive cover, as they want the vehicle fully protected while you're still paying for it.
There are a few ways you can lower your car insurance premium, such as choosing a car in a lower insurance group, building a no-claims bonus, adding a named driver, or increasing your voluntary excess
Yes, it can. If you don’t have the right insurance in place, your car finance application may not be accepted. Most lenders want proof of full insurance before they release the car to you. This is because the car is still partly owned by the lender during the agreement.
Also, insurance adds to your total monthly costs. So if the insurance is too expensive, it might affect how much you can afford to repay each month and your application could be declined for affordability reasons.
Make sure you can afford both the finance and the insurance. Before taking out an insurance policy, it’s a good idea to compare quotes so you’re not overpaying for your cover.
Cars in lower insurance groups are usually cheaper to cover. These cars have smaller engines, cost less to repair, and are seen as lower risk by insurers. Popular first cars for cheap insurance include:
If you’re thinking about used car finance, these cars are a good starting point. Always check the insurance quote before you agree to finance a car. Smaller, safe, and affordable cars can help keep insurance costs low as a new driver.
Yes, you can get learner driver insurance while you’re learning to drive. This lets you practice in someone else’s car (like a parent's) or your own car, if you’ve already bought one.
Once you pass your test, you’ll need to switch to a full insurance policy straight away before you drive alone. Changing your policy might cost more at first, but your premium is likely to go down over time if you don’t make any claims and drive sensibly.
If you’re a first time buyer getting car finance, insurance is a key part of your overall costs. Here’s what to remember:
At AutoMoney Motor Finance, we understand that insurance costs are a challenge for new drivers. We’ll look at your full circumstances and work with you to find a finance plan that fits your budget.
