When it comes to managing your finances, one area where you can often make significant savings is car insurance. Our aim in this article is to try and help provide you with some useful advice and tips to enable you to lower the amount of money you spend on your car insurance in the UK. By understanding the various factors that influence your insurance premiums and taking proactive steps to manage them, you can potentially save a substantial amount of money each year.
Everyone who drives is required to pay for car insurance, but you shouldn’t be required to pay any more than what is needed just to make sure your car can be on the road. With the cost of living on the rise, finding ways to cut the amount you’re having to spend on car insurance can go a long way in making sure you have enough money to cover all of your other living expenses.
Additionally, understanding how to lower your insurance premiums can make driving more affordable, regardless of whether you’re a new driver, a seasoned motorist who drives for a living, or just someone who only uses their car occasionally to get around.
Protect Your No-Claims Bonus
Your No-Claims Bonus (NCB) is a rewards system that insurers offer in an attempt to encourage safe driving. For each year that you drive without making a claim, you are entitled to a discount on the cost of your premium. This can stack up quite considerably towards a premium that is reduced by as much as 60-70% after five or more years. In order to protect your no-claims bonus and ensure that you make the most of it, the following can be done: avoid making the smaller claims by covering the cost of smaller damages yourself, use no-claims bonus protection if this is on offer, and drive carefully in order to avoid causing any accidents. Remember, it’s all about achieving a clean driving record in order to benefit from the savings that your No-claims can offer.
Add A Named Driver
Adding an experienced named driver to your policy can reduce the cost of your insurance. Insurers will see an experienced driver as a less risky option and so may offer you a cheaper premium. This is particularly useful for younger or less experienced drivers. However, beware the possible pitfall that if the named driver makes a claim, this can affect your premium. And also, never claim falsely that a named driver is the main driver, a practice known as “fronting,” which is illegal and can also invalidate your insurance.
Avoid Making Modifications To Your Car
Modifications to your car can have a significant effect on your insurance premiums. While some, for instance, security features, can lower your premiums, there are plenty that can increase costs. Performance modifications, for instance, engine upgrades or turbocharging, will often make your premiums higher as they heighten the risk of an accident. Cosmetic modifications, for instance, body kits or a new paint job, can also increase costs as they are more expensive to repair or replace.
Make Sure Your Mileage Is Accurate
Accurate mileage estimates are key to making sure your insurance isn’t voided in the event of an accident. Your annual mileage is used by insurance companies to calculate risk: the more you drive, the higher the chance of having an accident. Accurately estimating can prevent you from paying too much for your cover. If you underestimate your mileage and have to make a claim, it could be rejected or only paid in proportion. Review your mileage on a regular basis and update it to reflect what you are actually driving. An app for tracking your miles or a mileage logbook can help you give an accurate estimate to prevent you from having disputes with your insurer.
Take an Advanced Driving Course
Advanced driving courses, for instance, those offered by the Institute of Advanced Motorists (IAM) or Pass Plus, will improve your driving skills and make you a safer driver. They give insurers the proof that you are a lower-risk driver and can get you a discount from your premium. These courses include advanced driving skills, a more in-depth hazard perception, and driving on the motorways, all of which ensure you to be a better and more confident driver.
Opt For The Right Level Of Cover
The right level of car insurance cover is a careful balance between cost and protection. The highest level of protection is comprehensive insurance cover, which covers damage to your car, theft, and third-party liabilities. Third-party, fire and theft insurance is a mid-range level of car insurance and covers third-party liabilities and damage from fire or theft, but not accidental damage to your car. Whilst third-party, fire and theft was once seen as the cheapest way to insure a car – because those who opted for this cover were having a higher number of accidents on average, it’s now often cheaper to take out fully comprehensive insurance with many providers.
Pay For Car Insurance In One Lump Sum
Paying for your car insurance in one payment, rather than monthly, can save you considerable money. When you spread the cost over monthly payments, insurers normally apply interest or financing charges to the cost of the premium, making the overall cost higher. By paying your premium in one sum upfront, you avoid these charges and are often entitled to a discount for paying in one lump sum. If paying in one go would be very financially challenging for you, consider putting a small amount away into a dedicated savings account each month. This way, you can accumulate the total premium by renewal time and benefit from the savings of a lump-sum payment without putting a strain on your budget.
Never Auto-Renew
Auto-renewing your car insurance may be an easy option, but it can be an expensive one. The renewal time is a time many insurers will use to increase premiums, and it is a time to think twice about blindly paying a fee to auto-renew. Instead, get into the habit of comparing quotes at least annually. Shopping around means you get the best deal and can take advantage of new customer discounts or offers. Use a comparison website to see prices from different insurers.
Compare Quotes
It sounds simple, and with the easy access to comparison sites like GoCompare and Compare The Market, comparing quotes has become the standard practice when taking out your insurance. Insurance companies calculate premiums differently, so prices can vary significantly for the same level of cover. However, using these comparison websites to quickly gather quotes from multiple providers means you can shop around and check the different levels of cover, and if there are any additional benefits or exclusions.
Take Advantages Of Discounts & Freebies
Many car insurance companies offer a variety of discounts and freebies that can help to reduce your car insurance premiums. Common discounts include multi-car discounts for insuring more than one vehicle, loyalty discounts for long-term customers, and discounts for bundling multiple policies (e.g., home and car insurance). It’s always worth seeing if other free benefits are going to be included as part of any policy too, for example, some providers may include things like breakdown cover or legal assistance.
Consider Increasing Your Voluntary Excess
Voluntary excess is the amount you agree to pay out of pocket in the event of a claim. Choosing to increase the amount you’ll be paying as an excess will help you reduce the overall amount of your insurance premium as you’re sharing more of the risk with the insurer, which lowers their potential payout. However, ensure you choose an excess amount you can afford to pay if needed. Balancing a higher excess with an affordable premium is tricky, but if you can get it right, then it will lead to some pretty solid savings in the long-run.
Keep Your Car Safe
Where you keep your car can have a significant impact on your potential insurance prices. Most providers offer better quotes for those parking their vehicles at garages or driveways instead of the streets. But, if either of these are still not an option then it’s wise to park in well-lit areas overnight to reduce your risk profile. You can also make sure to add additional security to your car which can help to reduce car insurance quotes such as using steering locks, immobilisers, and tracking devices.
Drive Fewer Miles
As we mentioned when explaining why giving an accurate mileage to insurers was important, the number of miles you drive each year directly impacts your car insurance premium. The less you drive, the lower the risk of accidents, which can result in lower premiums. Car sharing a commute with colleagues, or switching to public transport when you don’t absolutely need to drive can both massively cut down your annual mileage, and, in turn, help reduce your car insurance.
Cut Out Any Unused Extras
Whilst we did say to look out for free additional benefits where you can, you should also be looking at if there are current add-ons that you’re paying for but not using. These extras might include breakdown cover, legal assistance, or a courtesy car in the event that your car is taken off the road for any extended period of time. Review your policy and identify any add-ons you don’t use or need. Removing unnecessary extras can reduce your premium without compromising the essential cover that’s needed, just be careful not to remove any vital protections which could then cost you more money in the event of a claim.
Choose Your Car Carefully
The type of car you drive significantly affects your insurance costs. Insurers consider factors like the car’s value, repair costs, safety features, and theft rates. High-performance cars and luxury cars both have much higher repair costs should they become damaged – which of course is going to drive up your insurance price. On the other hand, cars with good safety ratings, low repair costs, and lower theft rates are cheaper to insure. When choosing a car, consider its insurance group rating and opt for models known for lower premiums.
Be Mindful Of Your Job Title
Your job title can impact your car insurance premium, as insurers use it to assess risk. Certain professions are considered higher risk, leading to higher premiums. When filling out your insurance application, be accurate but also explore different ways to describe your job. For example, you could put down that you are a “journalist” or that you’re a “writer” both jobs which may seem similar. However, one may have a much higher risk in the eyes of insurers and therefore you should think carefully about how you declare your occupation whilst making sure that you remain truthful with any providers.
Watch Out For Admin Charges
Insurance policies often come with administrative charges for changes or cancellations. These fees can add up, especially if you frequently update your policy. So in terms of how to reduce car insurance quotes, you’ll want to review your policy details carefully and try to make any changes all at once rather than incrementally in order to minimise these costs. Also, some insurers offer policies with lower or no admin fees, so consider these options when choosing a provider.
Consider Getting A Black Box
Black box insurance, or telematics insurance, involves installing a device in your car that monitors your driving habits. The device then assesses factors like speed, braking, and driving times to calculate your premium based on your actual driving behaviour. Obviously, safer and more responsible drivers get the benefits here as they can massively lower their premiums by using a black box. There is also the common misconception that a black box only lowers the insurance for new and younger drivers, but the truth is, it can reduce your premiums significantly regardless of your age.
