With the rapidly expanding growth in online shopping, courier and parcel delivery companies are finding it difficult to find the right level of talent to meet their business demands. When you consider that approximately 4.2 billion parcels were sent in the 2020/2021 fiscal year, an increase of 1.3 billion parcels from the previous year, the training of younger drivers would seem the logical solution.
The downside to this could be the high cost of commercial vehicle insurance that may be charged to younger drivers, whether a sole trader or an employee. Statistically, there is no getting around the fact that younger drivers incur more accidents, specifically those adults under the age of 25.
Overall, in 2021, around a fifth of all serious accidents with cars involved a young driver. When you consider that fewer than 7 percent of drivers under the age of 25 held a full British driving licence at that time, the figures are high.
So, on the one hand there is a huge younger talent pool out there to meet the expected courier service growth of $16.10 billion in 2023 to $23.59 billion by 2028 (Mordor Intelligence), but one in which potential employers need to choose wisely.
You will need to have a motor trade insurance policy if you are involved in running a garage, carrying out MOTs, servicing and repairing vehicles, valeting, driving vehicles from one place to another, or moving a customer’s vehicle around a garage forecourt or showroom. If you intend to do parcel delivery, then you are more likely to need road risks as part of your commercial vehicle insurance.
Either way, you will need a policy that is not only affordable when entering the driving business, but also offers sufficient protection for the work you carry out. Unfortunately, insurance is likely to be higher the younger you are, and some brokers may even be reluctant to offer you insurance for your business. Others, such as Tradex, may be more sympathetic and offer some solutions to get you started.
It is important to know that when a motor trade insurance broker calculates your policy premium, they look at the probability of risk. With a higher likelihood that an inexperienced driver might be involved in an accident, particularly when driving for work, the risk level will increase substantially.
If you are driving vehicles within the motor trade or as a courier, you will need road risks insurance cover. For a younger driver, this is more likely to be considered if you can prove you have ‘on the job’ experience and have spent time gaining some skills, either within service and repair, helping with deliveries or even breakdown and recovery.
Most motor trade insurance policies will expect you to have held a full, clean UK driving licence for a minimum of 12 months and have built up some no claims before being eligible for cover. A broker may also look more favourably if you have undertaken an advanced driving course.
How To Reduce Younger Driver Insurance Quotes
Tradex works with younger drivers, offering a flexible approach to those between the ages of 21 and 25 years. Risk is assessed on an individual basis and we will look at such areas as a higher excess.
The following can be a help when discussing the possibility of insurance for younger drivers, as well as ways in which you could help to keep insurance costs lower. As well as being a safe and careful driver as mentioned above, there are some other areas that may keep your insurance costs to a more reasonable level.
1. Choosing a less powerful vehicle
Selecting a car or van with a less powerful engine may be both cheaper to run and reduce your insurance costs. If you are a recently qualified or less experienced driver, choosing a powerful car could be much more costly. Generally, the smaller the size of your vehicle the lower the insurance policy. This may be the same if you are working for a company who sells or repairs high-end vehicles. It could be a while until an insurance broker will accept the risk for you to drive these on the road.
2. Select a lower vehicle insurance group
All vehicles will have an insurance group number – the lower the number could mean cheaper insurance. In part, this is due to the engine size but also includes things such as reduced repair costs due to the availability of cheaper parts, and the value of the vehicle at purchase. Whilst this may not be practical if you need a larger van as a courier, it could be that you invest in a mid-size vehicle which will be suitable until you expand your business.
3. Securing Your Vehicle
Where your vehicle is parked at night is important to insurance brokers, together with the level of security installed to deter thieves. Examples could include fitting an alarm or immobiliser (a Thatcham Cat 1 Alarm and immobiliser is industry recommended), and parking in a well-lit area or in a locked garage. Remove tools at night or keep them well-hidden from prying eyes.
4. Increase your voluntary excess
When you are requesting quotes for your young driver courier or motor trade insurance, you will be asked how much you can comfortably pay should you need to make a claim. This is known as the voluntary excess. If you are confident in your driving, you can increase the amount you are willing to pay towards this, and your overall premium should then decrease. Voluntary excess will only be paid when you make a claim, but it is important to set the money aside just in case it is needed.
5. Making an annual payment
Making an annual payment for your motor trade insurance can reduce the total paid due to the non-addition of interest. This may help you to make savings on some insurance policies and you will have one less regular payment to worry about.
6. Installing a black box
Having a black box fitted (also known as telematics) can reduce premiums for young driver vehicle insurance. A black box provides feedback on your driving style and builds a picture of how you drive for your insurance broker. It checks things like the speed, distance and time of day you are travelling. It will also determine how you drive around corners and braking and acceleration. This will need to be actioned in advance to allow your insurance broker to build up the evidence of your driving ability.
7. Dashboard cams
Having a dashcam installed can be a great way to promote good driving, settle any disagreements that may happen on the road, and help you to receive any insurance discounts. Dashcam footage is a good security measure as evidence to prove you might not be to blame for an accident.
8. Building you no claims
It is usual that motor traders or commercial vehicle drivers under the age of 25 have driving experience and possibly no claims bonus (NCB). To support new drivers, Tradex offers a bonus booster, in which a six month motor trade or commercial vehicle policy will allow a discounted rate for a full year’s policy.
9. Home family fleet insurance
This offers a multi-vehicle policy that puts all your family vehicles on one policy. It usually covers between two and five vehicles and includes all types from cars, vans, motorbikes, even horse boxes and camper vans. The vehicles must all be registered to the same address and can be a good policy if you are a younger driver.
10. Advanced driving course
Pass Plus offers a practical training course taking approximately six hours. It enables drivers to improve their skills and be safer on the road. This may be useful for new drivers in the year after passing their test. Subjects covered include driving in town, in different weathers, on rural roads, at night, on dual carriageways, and motorways. Find details at the Driving and Vehicle Standards Agency website.
Every motor trade insurance broker will differ greatly in the motor trade or courier insurance that will be available for those under the age of 25. Always get several quotes to compare which offers the best possible business cover at the most reasonable price.