Car insurance premiums can vary depending on many factors such as age, gender and address of the customer. Companies will also consider the make of the car and the size of the engine. All these combined can make insurance fairly costly for the new driver especially if they are young and male. There are ways of lowering premiums for new drivers such as courses taken after the driving test. Individuals can also choose between three kinds of insurance which vary in cost and cover.

The three kinds of cover are: Third party only, Third Party Fire and Theft and Comprehensive (Fully Comp). The categories often differ in price and this reflects their level of cover.

The cheapest level of cover is usually Third Party Only. This offers the lowest level required by law and insures against damage and injuries that a driver causes to an individual (third party) or their property should an accident occur. The insured would have to pay for any damage to their own vehicle. If this would be too expensive then the driver can consider a higher level of cover.

Third Party Fire and Theft is a popular option for new drivers. It is similar to Third Party because damage to others is paid for but coverage does not extend to the insured. Additionally there is protection should the insured's car be stolen or damaged by fire. Third party fire and theft is usually cheaper than Comprehensive insurance but this is not always the case and individuals should check policy details carefully.

Comprehensive is usually the most expensive kind of car insurance. This is because Comprehensive provides cover offered in the previous categories (coverage for third parties and if the vehicle is stolen or damaged) with the addition of coverage to the driver's car if it is damaged in an accident regardless of who caused it.

There can be many extras included in the Comprehensive cover that some new drivers choose not to take up in order to keep their premiums as low as possible. Extras can include coverage for loss or damage to personal items in the vehicle and for medical expenses resulting from an accident.

When calculating premiums insurance companies will consider the make, model, mileage, and market value of a car. Consequently new drivers can greatly affect their insurance costs by the type of car and the amount of miles they intend to travel. Premiums are lower on an older car with a smaller engine because they are cheaper to repair should there be an accident. Keeping modifications to a minimum will also lead to lower insurance costs. Modifications can include alloy wheels and adjustments to the engine that make it run faster. The less miles travelled the less the insurance will be because statistically there is less chance of a claim occurring.

The record of no claims bonus directly affects premiums. Drivers are rewarded by a reduction in price of the policy if no claims are made because companies see this as proof of a lower risk customer. New drivers will not have any record so may find this increases their insurance costs.

Some policies allow new drivers to be a named driver on another's policy and still earn a no claims bonus. As a named driver the insured is allowed occasional use of the vehicle. If they use the vehicle more often than the actual policy owner this is classed as ‘fronting' and is illegal.

The majority of insurers do not yet offer a no claims bonus to named drivers and it may be more useful for the new driver to take out their own policy and earn their own bonus. They will then benefit from reduced premiums the following years if no claims are made. They will also have the option to protect their no claims bonus after a specified time has passed.

New drivers would then be able to make a claim – sometimes two – and their premiums would not be affected. Some new drivers find that if they choose to take out their own insurance they can reduce the premium if they add an older, experienced driver to their policy.

Security of the vehicle is a factor affecting premiums. A car alarm and parking the car in a garage overnight will bring costs down.

New drivers can consider taking a Pass Plus course which some insurance companies will take into account and will lower their premiums accordingly. The courses cover six areas such as driving at night, on motorways and dual carriageways and there is no test at the end of the course. Occasionally the discount available through an insurance company is more than the cost of the course. Individuals may find their local authority will provide a discount if they were to do a Pass Plus course.

Pass Plus courses show a driver can be safe and this has implications for premiums. Any points or convictions can make getting affordable car insurance difficult especially for new drivers whose premiums may be high in their first year of driving. Speeding tickets and penalties for using a mobile phone when driving can increase premiums by a substantial amount.

New drivers can approach insurance companies that offer discounted policies where the new driver agrees not to use the car at night. Others use a pay-as-you-drive systems that charges for each journey which may lower costs.

Shopping around to find the best deal is advised and individuals can get instant quotes on the Internet. Insurance can also be purchased over the phone, on the high street and direct from insurance companies.