Taking out car insurance can be a stressful and complicated process, and the sudden additional expenditure can ruin the enjoyment of getting a new car. Our car insurance tips take you through the FAQs, the process, and help you understand how to keep your car insurance costs down.
Why is my car insurance so expensive?
It’s important to first understand how car insurance is calculated, as there are many different factors impacting the price of car insurance premiums. The main car insurance factors are:
- Voluntary excess
- No claims bonus
- Driver age
- Driver history
- Car make, model and age
- Annual mileage
- How you use the car
- Where you live
- Where you park
Some of these factors are largely out of your control and as a result there may not be a lot you can do to affect your car insurance premium. Equally, there are some factors you may be able to control which can help you reduce the cost of your premium.
Important: It is vital that you don’t use false information on any car insurance quotes or policy documents as this invalidates your policy. Insurers have the right to not pay out over any claim, cancel your policy, and charge you the correct premium as a lump sum.
12 tips to lower the cost of car insurance
It can sometimes feel like the price of your car insurance increases for no obvious reason and it’s true; how companies calculate the price of their premiums is a grey area.
We have put together a list of 12 tips to help you save money and get cheaper insurance immediately. These are tips which you can implement right away whether you have a current policy, or you are looking to set up a new one.
1.Paying yearly vs monthly – Paying your insurance premium upfront for the year is recommended for people who can afford to do so. This could save you money on your policy compared to paying monthly because monthly payments have interest on them. However, paying monthly is the only option for some people, especially young drivers as some yearly payments can cost several thousand pounds.
2. Unnecessary extras – A lot of insurance companies will try and get you to add extra things to your policy, when in reality you might not need them. If you have add-ons to your policy, look into them and ask yourself if you actually need them as these extras can increase the price drastically.
3. Get a quote ASAP – Getting a quote for car insurance last-minute before you need a policy to begin can sometimes be more expensive. We recommend planning your insurance in advance, getting a quote at least a week before you need the policy to begin.
4. Add a driver – More tailored towards young drivers (drivers below 21), adding a more experienced driver to your policy can lower your premium. For example, you might want to add one of your parents to the insurance policy, this might lower the cost significantly.
5. Correct job title – Always be honest and accurate with your job title as this can affect premiums depending on the specific job you do. For example, if you are a waiter, don’t just put ‘waiter’ as your title, specify exactly who and where you waiter for.
6. Advanced driving qualification – ‘Pass Plus’ is an advanced driving course which once qualified for, could reduce your insurance premium.
7. Compare – Never settle for the first quote you get. Compare your car insurance quotes between the various major comparison sites to find the best deal, and don’t be afraid of contacting an insurer directly to ask if they can offer you a lower premium cost. Although this may seem tedious, quotes can vary in price depending on which site you are on.
8. Install a Black Box – A Black Box is a device which monitors your driving, measuring your speed, driving style, distance travelled and the time of day you’re driving. Having a Black Box noted on your insurance policy can reduce your premium substantially. Sensible driving can be rewarded financially!
9. Check your insurance yearly – Although you may assume your premiums with your current insurer will decrease after a year of cover, this isn’t necessarily the case. You can potentially save a lot of money by shopping around when your insurance is up for renewal. Another tip is to contact your current insurer when it comes to renewal to let them know you’re considering swapping to another provider. This can be beneficial because insurance companies can sometimes improve their offer if you tell them you plan not to renew with them.
10. Voluntary excess – Choosing your level of voluntary excess can affect the price of your insurance premium. If you choose a higher voluntary excess, this means you take on greater personal responsibility for the car and any potential damages incurred. However, if you are involved in an accident and you have to make a claim you will have to pay out this larger amount.
11. Your choice of car – Cars that are very valuable, very powerful or have certain modifications can increase the cost of insurance. This is because insurers think they are more likely to be stolen, get into an accident, or will be more expensive to repair if an accident happens. If you’re looking to minimise your insurance premiums, buying a car that is most suited to your needs will ensure your premium is no higher than it needs to be.
12. Where you park – Some insurers will consider where you park your car as a factor in calculating insurance costs. Whilst most people might assume that keeping a car in their garage overnight would result in a lower premium, this is not necessarily the case. If you have choices of where to park your car, you should choose different options when getting quotes, to see which is cheapest.
Types of car insurance
What your car insurance covers can vary hugely depending on what policy you have. Usually, car insurance covers your vehicle for any damage caused in an accident or crash, whether to your vehicle or another, plus damage to the property of other drivers, and finally personal injury.
It can also be extended to cover breakdown costs, medical assistance that may be needed and theft or damage to personal belongings stored in the car. The main types of car insurance are referred to as:
- Third Party
- Third party fire and theft
- Fully comprehensive