If you’re reading this, you’re probably a young driver looking for their first insurance policy.
The concept of a voluntary excess might be strange: why would you want to pay more if you got into a crash? You want to pay less!
Voluntary excess is one of those insurance terms that sounds complicated, but it’s actually pretty simple. It’s just the extra amount you agree to pay upfront if you make a claim.
As a result, you’ll pay less per month (or per annum—depending on how you want to pay for your insurance).
The trick is figuring out how much to set it at—and that’s where this guide comes in.
In this article, we’ll cover:
- How voluntary excess works
- Should you choose a high or low voluntary excess?
- What happens if you make a claim?
- Common mistakes to avoid
Looking to find affordable car insurance as a young driver? You could save over £500 with our comparison tool
How voluntary excess works
When you purchase car insurance, you’ll have two types of excesses:
- A compulsory excess (set by your insurance policy): The amount you must pay upfront if you make a claim.
- A voluntary excess: An additional amount you agree to pay upfront if you make a claim. You can choose how much you want this to be.
Your voluntary excess can make a big difference to your monthly premiums.
Let’s say your compulsory excess is £400. If you add a voluntary excess of £100, your total excess would be £500.
Now, if you choose a higher voluntary excess, say £400, your total excess would increase to £800 (£400 compulsory + £400 voluntary). Because you’re agreeing to pay more upfront if you make a claim, your monthly premium would be significantly lower.
The trade-off is clear: a lower voluntary excess means you pay less when making a claim, but your monthly premiums are higher. A higher voluntary excess reduces your premiums but increases your upfront cost if you make a claim.
Should you choose a high or low voluntary excess?
There’s no right answer here. It’s all dependent on your financial situation and risk tolerance.
- A low voluntary excess might be better if you have limited savings. If the excess of a claim would wipe out your savings, you might be more comfortable paying higher monthly premiums but have the peace of mind that a claim won’t clear your bank account.
- A high voluntary excess can save you money on your overall insurance cost if you can afford a claim.
Think about how much you drive. Do you drive all the time, or just an hour or so a week?
A high voluntary excess might make more sense if your risk is low (e.g. you don’t drive much), as your chances of needing to claim are fairly low.
If you drive daily to get to work or class, your chances of needing to claim are higher (even if you drive perfectly). So, you might want to consider a lower voluntary excess.
What happens if you make a claim?
When you make a claim, you’ll need to pay your insurer both your compulsory excess and voluntary excess. Your insurer will pay the rest.
For instance, if your total excess is £500 and the repair bill is £3,000, you’ll pay £500, and the insurer covers the other £2,500.
Of course, if the repair cost is less than your excess (or close to it), it might make more sense just to pay the repair yourself, and protect your no-claims bonus.
Common mistakes to avoid
When choosing a voluntary excess, avoid these common mistakes:
- Choosing an excess that’s too high might lower your premiums, but if you can’t afford to pay the excess when making a claim, it could leave you in a tough spot financially. You don’t want to go into debt just to pay your excess.
- Forgetting to account for the compulsory excess: Your voluntary excess is added on top of this—make sure to consider the total you’ll need to pay.
- Not shopping around: Different insurers calculate premiums differently, so try experimenting with voluntary excess levels across multiple providers to find the best deal.
Get a quote today
Finding the right voluntary excess is just one part of getting the best car insurance for young drivers.
With Young Car Driver, you’ll get access to quotes designed specifically with young drivers in mind, balancing great coverage with affordable pricing. Whether you’re looking to save on premiums or want peace of mind with lower upfront costs, we’ll help you find a policy that works for you.
Need car insurance specifically designed for young drivers? Get a quote