How to save money on your car insurance
Getting cheaper car insurance in the UK isn’t just about finding the lowest premium; it’s about understanding what factors influence your insurance costs and how you can navigate them to your advantage. With rising vehicle-related expenses, securing an affordable insurance policy that offers good coverage is more crucial than ever. Here’s a comprehensive guide to help UK drivers minimize their car insurance costs without compromising on protection.
Understand the Basics
The UK car insurance market is highly competitive, with prices fluctuating based on various factors including the driver’s age, driving history, the type of car they drive, and even their postcode. There are three main types of car insurance:
- Third Party: The minimum legal requirement, covering damage to other people’s property and compensation for injuries to others in an accident you cause.
- Third Party, Fire and Theft: Includes the above, plus protection if your car is stolen or damaged by fire.
- Comprehensive: Covers all of the above, plus any damage to your own car, even if the accident was your fault.
Shop Around and Compare
Don’t just accept the renewal quote from your current insurer as they count on customer inertia to keep rates high. Use comparison websites like us to get a broad view of the market. Remember to check insurers not listed on comparison sites, such as Direct Line or Aviva, to ensure a thorough search.
Consider Your Vehicle
The car you drive significantly impacts your premium. High-performance vehicles or cars with large engines typically cost more to insure. To get cheaper insurance, opt for a car with a smaller engine, which is in a lower insurance group. Cars are rated in groups from 1 to 50, with 1 being the cheapest to insure. You can check a car’s insurance group rating on the Thatcham Research website.
Increase Your Excess
The excess is the amount you pay towards any claim before the insurance kicks in. By agreeing to a higher voluntary excess, you can often lower your premium. However, it is important to make sure it’s an amount you could afford to pay in the event of a claim.
Drive Carefully
Your driving record has a significant impact on insurance costs. Points on your license or a history of accidents will lead to higher premiums. Drive safely and build a no-claims discount (NCD) over the years, which can significantly red uce your premium. Some insurers offer a no-claims discount protection for an extra fee, allowing you to make a certain number of claims without affecting your discount.
Consider Telematics (Black Box) Insurance
Telematics policies, where a GPS system tracks your driving habits, can be cheaper if you’re a safe, low-mileage driver. They’re especially popular with young drivers who face high premiums. The insurer assesses your risk based on actual data from your driving, which can result in lower costs if you demonstrate safe driving habits.
Pay Annually
While monthly payments may seem easier on your wallet, they often come with interest charges. If possible, pay your insurance premium in one lump sum annually to avoid extra costs.
Limit Optional Extras
Only add extras to your policy if they’re necessary. For example, courtesy cars, legal expense cover, or windshield cover might sound good, but they can significantly increase your premium. Weigh the actual value these add-ons provide against their cost. Read more about optional extras here.
Boost Your Car’s Security
Enhancing your car’s security with approved alarms, immobilizers, or tracking devices can reduce premiums. Parking your car off the street, in a garage, or on a driveway can also help lower costs, as it reduces the risk of theft or vandalism.
Adjust Your Coverage
If you have an older car, consider whether you need comprehensive cover. It might not be cost-effective to have comprehensive insurance if your car’s value is low. However, never underinsure just to save money; always make sure you’re legally covered for your circumstances.
Add a Responsible Second Driver
Adding another driver with a clean record and no claims can sometimes reduce the premium. However, ensure this is done legitimately, as falsely designating someone as the main driver (fronting) is illegal and could invalidate your insurance.
Consider Membership Discounts
Some organizations and clubs have partnerships with insurance companies to offer discounts to their members. For example, if you’re a member of the AA, RAC, or a trade union, you might qualify for discounted rates.
Keep Your Details Up to Date
And finally, always keep your insurer informed of any changes in your circumstances, such as moving house or a new job, as these can affect your premium. Sometimes, such changes might result in lower insurance costs