A proposal from the Financial Conduct Authority(FCA) aims to ban car insurance companies from hiking up renewal prices for existing customers. In light of this, we’ve explored how this could potentially impact the quotes for one year policies offered to new customers.
Uswitch car insurance expert, Florence Codjoe, said: “Whilst the new proposal is great news for loyal car insurance customers, those in search of a one year policy need to take extra care, as the ban on special deals for new customers could lead to an overall price increase.
“Young drivers find it especially hard to secure low cost car insurance, along with those who’ve recently made a claim, have a low credit score, or have been made unemployed. Thankfully, however, there are some surprisingly easy ways to reduce the cost of your car insurance if your premiums are higher than expected.”
In a bid to help motorists get the best deal, our car insurance expert has rounded up some savvy tips to help cut the cost of your premiums. From getting hitched, to registering to vote, you may be surprised at what can save you money.
Believe it or not, tweaking your job title could save you hundreds of pounds on your premiums.
This is because insurance companies store historical information on claims they’ve paid in the past. By analysing this data, they make predictions about claims they might face in the future. If the job title you choose when applying for a quote is deemed as high risk, the price you’ll pay will be higher.
For example, a recent study shows if your current job title is ‘chef’ you’ll pay amongst the highest premiums, with an average annual premium of £420.70. However, by tweaking your title to ‘cook’, you could save almost £120, as the average premium for this role is just £302.51. Whilst this may seem strange, it’s based on historical data that shows those with the job title ‘chef’ have made more claims over time, than those with the job title ‘cook’.
What our expert says: “It’s definitely worth trying out a few different job titles before accepting an offer. Whilst you must always ensure you are telling the truth about your profession, selecting an alternative job title that still matches your role could save you hundreds of pounds on your annual quote.”
If you’re in a relationship but haven’t tied the knot just yet, you and your partner could save hundreds of pounds by saying ‘I do’. That’s because car insurance companies tend to think married people are “lower-risk” than single people.
Thankfully, it’s not as old-fashioned as it sounds, research shows that married drivers make less expensive claims than singletons. As a result, insurers may offer you a more attractive insurance premium if your marital status is ‘married’.
Premiums can dramatically decrease by up to £200 for couples in their thirties, who make the most savings overall.
Even if you’re in a traditionally ‘high risk’ insurance group, getting wed can give you an advantage. Whilst this may seem unjust, studies show that single drivers are at twice the risk of having an accident behind the wheel compared to people who have tied the knot.
However, if you aren’t quite ready to get married but are in a domestic partnership, some insurers do offer specific discounts for couples living together. Some insurers feel encouraged to do this under the assumption you’ll spend less time driving alone.
What our expert says: “Whilst there are so many wonderful reasons to get married, making an extra saving on your car insurance is another added bonus.
“If you get married, remember to update your provider and send evidence of your marriage certificate to ensure your policy is updated and you can reap the benefits.”
Registering to vote could help you lower the cost of your insurance, which is calculated on a number of factors including your credit rating.
If you have a poor credit history, you may pay more for a monthly premium. That’s because, statistically, people with low credit ratings are more likely to make car insurance claims.
There are many ways to improve your credit score, and one of the easiest things you can do is to ensure you’re registered on the electoral register.
Credit reference agency Experian says, if you are registered to vote, companies see this as a sign of stability by lenders and can therefore help any applications that consider your credit score.
Typically, appearing on the electoral roll at your current address can add 50 points to your Experian credit score, which in turn could help you save on your car insurance premiums.
What our expert says: “The cost of your car insurance is calculated on a number of different factors including your age, postcode, and your credit rating.
“People with lower credit ratings tend to have higher premiums, however by taking some simple steps to improve your credit rating, you could cut the cost you pay. Ensuring you pay your bills on time is also essential to avoid seeing high premiums.”
Adding responsible named drivers to your policy is another way to slash the price you pay. This is especially useful for younger drivers who can make dramatic savings by adding their parents to their car insurance.
Regardless of your age, adding a responsible driver with a clean driving record and a long run of no claims could reduce your level of risk in the eyes of the insurer.
In fact, a recent study reveals that young drivers can save up to £426 by adding their parents as named drivers.
However, it’s important to remember that the named drivers must only use the car ‘occasionally’ or you run the risk of invalidating your policy due to ‘fronting’.
‘Fronting’ is where a parent or more experienced driver pretends that they are the main user of a car when a younger person is actually driving it on a regular basis.
People sometimes do this to try to reduce the cost of premiums. However, if an insurer discovers this, your policy could be declared invalid and you could be liable for any costs that arise as a result of an accident.
What our expert says: “While adding a named driver to a policy who occasionally drives the vehicle is perfectly fine, you must be honest with your provider about who the main driver of the vehicle is. If you provide inaccurate information, you could risk ‘fronting’ which is illegal and could see your insurance invalidated.
“People found guilty of fronting, or any other type of insurance fraud, will also find it more difficult to buy insurance in the future and their premiums will be more expensive.”
As we’ve all been spending more time at home this year, we’ve probably not been driving as much. When applying for car insurance, motorists are always asked to provide the estimated number of miles they are set to drive throughout the year, which impacts the cost of your insurance.
If your car insurance is due for renewal, it’s definitely worth recalculating your mileage based on the amount of time you’re set to spend at home in the coming months, especially if you’re working from home.
Some insurers wavered cancellation or amendment fees during the national lockdown earlier this year, so it’s also worth checking with your provider if you can amend your policy free of charge and make a saving right now.
What our expert says: “Right now many providers are offering financial support to their customers, so if you want to recalculate your mileage, it could be worth giving them a call to waiver the amendment fee.
“If you have a record of your mileage from the last time you applied for cover, you could use this to calculate the difference used this year.
“If you don’t, you can always sum up how far you’ve travelled each day on average to get a rough estimation.”
If you drive an older car that doesn’t feature advanced safety features, you could pay more for your car insurance, due to the increased risk of making an expensive claim.
With this in mind, many car insurance companies are encouraging drivers to use safer cars by offering substantial discounts to those who are already using safer vehicles or are willing to install safety devices.
Features such as adaptive cruise control, automatic emergency braking and blind spot warning systems, could all save you a substantial amount of money, or if you do have these already installed – make sure you tell your provider.
If you don’t have these installed in your vehicle, fitting a dashcam could also help you save money.
Insurance providers who offer discounts to drivers with dashcams usually shave between 10 per cent and 12.5 per cent off the price of policies, though it can be up to 20 per cent for young drivers who have the safety device installed.
Anti-theft devices, such as GPS trackers and mechanical immobilisers such as tyre and steering locks can also help reduce the costs.
Mechanical immobilisers have been compulsory in new cars since October 1998, so if your car was made after this year, you’ve got one.
For cars older than this, you’ll need to check your owner’s handbook, which will state if your car has a factory-fitted immobiliser.
What our car insurance expert says: “Whilst we know safety devices, such as black boxes can help young drivers, there are so many other features that can help you make a saving. If you’ve got a new car, make sure you check the list of features installed and tell your insurance provider.
“If you have an older vehicle, simply installing a GPS tracker or a car safety alarm system could see you save hundreds of pounds on your premiums. Not only this, but you’re increasing your safety on the roads, which of course, is the most important reason for doing so.”
For newly passed drivers, search for the best young driver insurance.