Updated December 6, 2023
If you just got your driver’s licence, there’s no way around it. You will need to pay more for car insurance compared to the average motorist due to the perceived risks you face. But there are several ways for you to save on premiums. One of these is being smart about your vehicle choices.
To help you with your decision, Insurance Business ranks the cheapest cars to insure for first-time drivers in this client education article. We will also discuss why insurance rates are more expensive for new motorists and when premiums start to become cheaper. If you’re an insurance agent or broker, you can share this piece with your clients to guide them in accessing affordable coverage.
The cheapest cars to insure aren’t necessarily the most popular among the country’s young drivers. Still, these vehicles don’t lag in performance. These cars also allow you to save hundreds of pounds on premiums.
Here are the least expensive cars to insure for new drivers based on our research.
Lowest car insurance group: Group 1
Average premium for first-time drivers: £553
Apart from topping our list of the cheapest cars to insure for first-time drivers, the Fiat Panda is among the most fuel-efficient using only 60mpg in a combined cycle. It’s also powered by a 70hp 1.0-litre mild-hybrid petrol engine. All these features make the Fiat Panda an affordable car to own and operate, especially if you just got your licence.
One major drawback: it has a zero-star rating for safety from the European New Car Assessment Programme (Euro NCAP). This means that while the Fiat Panda has met the basic safety requirements, it lacks modern features for enhanced protection.
Lowest car insurance group: Group 1
Average premium for first-time drivers: £559
The Volkswagen Up will cease production by end 2023 so if this city car is on your wish list, you’d better act fast. Popularly known as one of the best small cars for first-time drivers, all Up models run on a 65hp 1.0-litre petrol engine capable of 55mpg on a combined cycle.
Despite its size, the VW Up has enough space for four adults. The car’s low insurance group also means your car insurance premiums will be relatively inexpensive.
Lowest car insurance group: Group 1
Average premium for first-time drivers: £577
The Skoda Fabia is a good option if you’re looking for a spacious city car with affordable insurance rates. Entry-level models are powered by a 1.0-litre multi-point injection (MPI) engine. The car comes in stylish trims. Different versions of the Skoda Fabia fall under insurance groups one to 13 depending on the model. The car’s cheaper premiums make it a good deal for new drivers.
Lowest car insurance group: Group 1
Average premium for first-time drivers: £594
The Hyundai i10 is a popular choice for new drivers because it’s easy to operate. The car is compact and boasts stylish detailing suited for young motorists. And because the i10 is powered by small engines, most models benefit from being placed in a lower car insurance group.
The Hyundai i10 also comes with a five-year unlimited mileage warranty, which is crucial for motorists just honing their driving skills.
Lowest car insurance group: Group 1
Average premium for first-time drivers: £629
If you’re looking for a small car with a sporty trim, the Nissan Micra N-Sport may be a good choice. All models run on a 1.0-litre turbocharged petrol engine, which packs enough power, minus the expensive premiums.
Don’t be fooled by the vehicle’s luxurious-looking features such as suede-like seat inserts, black alloy wheels, and chrome exhaust tip. The Nissan Micra remains one of the cheapest cars to insure for first-time drivers.
Lowest car insurance group: Group 1
Average premium for first-time drivers: £656
The Volkswagen Polo received high marks from Euro NCAP’s crash test, making it a good choice for first-time drivers building up experience on the road. It also comes with a range of safety features, including autonomous emergency braking, which helps bring premiums down.
Depending on the type of engine, the VW Polo falls under car insurance group one to eight.
Lowest car insurance group: Group 2
Average premium for first-time drivers: £645
The Vauxhall Corsa has low purchase price and repair costs, making it one of the cheapest cars to insure for first-time drivers in the UK. The Vauxhall Corsa also received a four-star safety rating from Euro NCAP, making it among the safest vehicles in the UK. Mid-level trims come with advanced features such as cruise control and tyre pressure monitor. Entry-level models are mostly placed in insurance groups two to 12.
Lowest car insurance group: Group 2
Average premium for first-time drivers: £648
The SEAT Ibiza is almost similar to the Volkswagen Polo and Skoda Fabia in terms of features, although it’s often considered as “more fun to drive.” Models run on an 80hp 1.0-litre petrol engine, meaning the city car benefits from fuel economy. If you want a vehicle with a sporty look, you can go with the FR trim.
The SEAT Ibiza falls under lower insurance groups and has low maintenance and repair costs.
Lowest car insurance group: Group 2
Average premium for first-time drivers: £689
Although no longer in production, the Toyota Aygo is still among the cheapest cars to insure for first-time drivers in the UK. It runs on a three-cylinder engine and has a spacious interior with modern touches like a 12V socket for charging your smartphone.
The Toyota Aygo is cheap to operate with its 1.0-litre VVT petrol engine. It also emits very low levels of CO2, meaning you don’t have to pay road tax.
Lowest car insurance group: Group 6
Average premium for first-time drivers: £709
The Citroën C1 is affordable to buy and own, making it a popular city car for new drivers. Models are powered by a three-cylinder 1.0-litre petrol engine, good for driving around town. Some features include a touchscreen stereo system, reversing camera, and electric windows. The Citroën C1 is also easy to maintain, helping keep your insurance costs down.
Since car insurance is a highly personalised policy, your premiums may be significantly lower or higher than the figures above. Apart from your age and the type of vehicle you drive, motor insurers consider a range of other factors to calculate your insurance cost.
You can also check out our ranking of the 10 cheapest cars to insure in the UK.
First-time drivers aged 17 to 19 years old tend to pay around 10% more to insure the same vehicle compared to their 20 to 24-year-old counterparts. These figures are based on recent data from the price comparison website MoneySuperMarket.
The site’s latest Young Drivers Index also shows that the average cost of a full comprehensive policy for motorists in the 17 to 19 age group is £1,496. This is slightly higher than the £1,357 average for those aged 20 to 24.
Annual premiums for third-party, fire, and theft policies for 17- to 19-year-old first-time drivers, meanwhile, are at £1,553. Those for motorists aged 20 to 24 are priced around 1,439.
For third-party cover, the minimum legal requirement in the UK, 17- to 19-year-olds pay around £1,247 in yearly premiums. Older drivers, or those in the 20 to 24 age bracket, pay an average of £1,384. This is about 11% higher than their younger and more inexperienced counterparts.
Every registered vehicle in the UK is included in one of 50 car insurance groups. The easier the car is to repair, and the less rare, expensive, and powerful it is, the lower the group it will fall under. Premium costs also tend to be cheaper when the vehicle is in a lower insurance category.
The following factors are among the primary determinants for a vehicle’s grouping:
Car insurance groupings, however, aren’t the only factors that impact premium prices. Motor insurance costs can also be affected by each driver’s personal details, including age and driving history.
“Car insurance premiums are often higher for drivers who have recently passed their test as insurers associate more risk with them,” explains Praksha Patel-Shah, car insurance expert at MoneySuperMarket. “Prices can also differ significantly depending on the type of car you drive.”
To save on premiums, Patel-Shah advises motorists, especially the younger ones, to shop around using price comparison sites to find the best deals. She also shares tips on how first-time drivers can lower car insurance costs.
“There are a number of ways for newly qualified Britons to reduce their insurance premium,” she notes. “You can keep costs down by reducing your mileage or opting for a higher excess. You could even look into telematics policies, which use data to monitor how people drive, and use this to determine the cost of their car insurance. The more careful the driver, the more competitively priced the policy.”
Car insurance premiums tend to fall considerably between the ages of 19 and 34. Average rates then begin to stabilise, with slight reductions from 34 to 75 years old. After this, premiums start to go up again as motorists reach a more senior age.
A driver’s age plays a big part in how car insurance companies calculate premiums. Insurers generally see younger motorists as inexperienced and, therefore, are at greater risk of getting involved in accidents. This often raises their premiums significantly. That’s why finding cheap car insurance for young drivers can be challenging.
If it’s your first time getting a driver’s license, you will need to pay more for car insurance because of the perceived risk you pose to insurers. But there are several ways for you to save on premiums. Here are some of them:
Your car insurance premiums typically drop as you age and gain more experience on the road. But this doesn’t mean you can no longer save on insurance costs. Our guide to cheap car insurance in the UK gives more practical tips on how to cut your annual premiums.
What do you think of our list of the cheapest cars to insure for first-time drivers? Are there vehicle models that we missed? Share your thoughts below.
