Pick the right vehicle
Car insurance premiums are based on a wide range of factors related not just to the individual customer but also the vehicle itself. Insurers will raise premiums if they think there is a greater chance of you making a claim and also if they think any claim will be costly.
This means that expensive cars cost more to insure, as they are more costly to repair or replace in the event of an accident or theft. And more powerful cars can do more damage if they are involved in collisions, again driving premiums up.
If you’re wondering how to reduce car insurance, one way is by choosing a low-value and low-power car that is in one of the lower car insurance groups.
Improve your car’s security
If you’re wondering why your car insurance is so high, one of the reasons might be a higher risk of being stolen. Some UK postcodes have higher car-theft rates than others, and if you keep your car on the street overnight, this could also increase the chances of it being targeted by thieves.
By adding anti-theft devices to your car and keeping it in a driveway or garage overnight if possible, you can potentially reduce the cost of insurance.
Get your mileage right
The more miles you drive every year, the more you’ll pay for insurance. When you apply for a car insurance quote, you’ll be asked to estimate how many miles you’ll drive in the next 12 months. Make sure this is as accurate as possible so you don’t end up paying too much. And consider using your vehicle less so you can get cheaper car insurance.
Choose the right level of cover
There are three main types of car insurance. Third-party only is the minimum level of car insurance, and it means other motorists can claim against you in the event of an accident.
But if you only have third-party insurance, you won’t be able to claim for damage to your own vehicle if you’re involved in an accident that is your fault. Third-party fire and theft also lets you claim if your car is stolen or damaged by fire.
Comprehensive car insurance is the most popular form of insurance, and it allows you to make claims for damage to your own car even if an accident is your fault. Comprehensive policies also cover fire and theft.
In the past, third-party cover was normally the cheapest option. But as more and more high-risk drivers, especially young motorists, have opted for third-party, they have driven the price up.
As a result, comprehensive policies can often work out as the cheapest type of car insurance.
If you’re considering a third-party policy, be sure to compare different types of cover when you’re applying for a quote so you don’t end up with a lower level of protection at a higher price.
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Look at black box insurance
Black box insurance, also known as telematics insurance, uses a device fitted inside your car to record factors such as speed, accelerating and braking, as well as what times of day the car is being used.
This data is used to set premiums, with cheaper rates for more careful and lower-risk drivers. Black box insurance can be a good option for younger drivers, who normally face higher premiums because insurers consider them to be high-risk.
Pick the correct job title
Insurers view workers in some professions as higher-risk than others when it comes to setting car insurance premiums.
When you are asked to select your job title during the insurance application process, make sure it reflects what you actually do.
For example, by selecting ‘journalist’, you could face higher premiums than if you chose ‘editor’ or ‘copywriter’. If you have reached pension age, make sure you select ‘retired’ rather than ‘unemployed’, and the latter can lead to higher costs as well.
Add a named driver
For young drivers in particular, adding a parent or older relative to your policy can lead to lower insurance costs.
But make sure you don’t put them as the main driver on your policy if you are going to be the one using the car most – this would normally be seen as fraud.
Consider protecting your no-claims bonus
For every year you go without making an insurance claim, you’ll increase your no-claims bonus (NCB). This should give you a discount on your car insurance.
You can choose to pay extra to protect your current NCB, which means this discount won’t be affected if you do need to make a claim.
Pay for your insurance upfront
Another way to cut the cost of car insurance is by paying your annual premium in a single lump sum at the start of the policy, if you can afford to do so.
If you opt to pay monthly, you’ll effectively be borrowing the entire annual premium and repaying it with interest, increasing the total cost.
Shop around for the best quotes
One of the easiest ways to reduce car insurance costs is by comparing quotes from a range of providers.
Because there are so many variables involved in setting car insurance premiums, it’s impossible to say which provider is likely to offer you the best value.
The only way to find out which is cheapest is by putting your details in and comparing the resulting quotes.
Don’t automatically renew your policy
Towards the end of your current policy, your insurance company will get in touch with a quote for next year’s cover.
Use this as a prompt to compare prices again: just because an insurer was the best value a year ago doesn’t mean you won’t be able to get a better deal by switching again.
Raise your voluntary excess
On any claim you make, you have to contribute a certain amount out of your own pocket. This is known as the excess and is made up of a voluntary and compulsory element.
As the name suggests, you don’t have to pay a voluntary excess, but if you choose to set it to £0, your premiums will be higher.
By the same token, opting for a higher voluntary excess can reduce the cost of car insurance.
Cut back on extras
If your insurance policy includes extras such as a courtesy car in the event of your own vehicle needing to be repaired or cover for valuable items left in the car, these are likely to be costing you more.
Cutting back on optional extras can help you cut the cost of car insurance.
FAQs
Which drivers pay the most for their car insurance?
Young drivers usually pay the most for car insurance because they are statistically more likely to have accidents and make insurance claims.
What are the cheapest car insurance groups?
The cheapest of the 50 car insurance groups are the lowest. Cars that are in higher groups, such as those from 40 to 50, will be the most expensive to insure.
Is it cheaper to insure an electric car?
Electric cars are becoming more common and therefore the costs of insurance are coming down, yet costs have typically been higher because electric car components and repairs are often more expensive.
Why is my car insurance so high when I have a clean record?
Car insurance prices are based on a number of factors, not just your claims history. Where you live and your job, for example, can have an impact. If an insurer thinks you are high risk, you’ll be charged more even if you haven’t made any recent claims.
Is insurance cheaper on automatic cars?
Car insurance for automatic cars is often more expensive than for manuals. Automatics tend to be more expensive to buy and repair, while drivers of automatics may be viewed as being less confident behind the wheel and therefore more at risk of making claims.
Are older cars cheaper to insure?
Car insurance for older vehicles can be lower because premiums are based partly on the car’s current value, which tends to depreciate with age. However, older ‘classic’ cars may be more expensive to insure if they are considered especially valuable or attractive to thieves.
