A UK-based company aims to put young drivers behind the wheel of a brand new car, from as little as £105.20 per month. The scheme is to launch later this month.
The biggest expense for young drivers is insurance, but the UK-based company has found a possible solution combining a PCP (Personal Contract Plan) deal with an insurance deal. The concept aims to make it more affortable for young people to enter motoring with a new car.
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Due to the price of insurance, "Young drivers are being forced into older cars without the modern safety features such as ABS brakes, airbags and improved crash test ratings", the company writes in their press release.
New for this project, the company can supply a car, such as a Fiat Panda, a Peugeot 107, a Fiat Punto or a Citroen C2, and an insurance deal especially aimed at young, inexperienced drivers. The obvious advantage is that a current Fiat Punto is a lot safer than a 15-year old Rover 100.
As an example, Marmalade, the company offering the new deal, can supply a Fiat Panda 1.1 5-door over 3 years, with an initial payment of £569.50, 36 Monthly payments of £105.20 and an optional Optional Final Payment of £2,336.00. If the buyer elects to pay the final payment, the car is theirs. This deal works out to an APR of 8.9%. In this particular example, the mileage is limited to only 6000 miles - about half the national average.
Complicated, but cheap insurance package
In addition, the company is introducing a Young Marmalade Insurance scheme. It costs £9.99 per year, which includes the basic comprehensive insurance premium for the first 100 miles per month over the first 12 months (in other words, roughly 20% of the insurance in the PCP deal above is included).
"Additional miles are charged separately at the rate of £9.50 per additional 100 miles driven between 6am and 11pm.", explains the company. The catch? Driving at night: "Since the vast majority of accidents involving young drivers occur between 11pm and 6am, this mileage is charged at £1 per mile.".
Presented with these type of figures, most readers turn off immediately, because who pays per mile for car insurance? It is worth taking a closer look, however:
In other words, if you are a young driver who drives 6000 miles per year, of which you drive 5% in the high-price band (i.e at night), you are looking at a yearly cost of less than £700. Factor in the cost of the car, and you are looking at roughly £1,900 for the first year.
In comparison, for the same car, based on an 18 year old male student living in a city in the north-west of England, Tesco motor insurance quotes nearly £2,200 - which obviously doesn’t include a car.
Full details of the scheme is available at http://www.youngmarmalade.co.uk