Car owners are well aware that the prices of both fuel and insurance have rocketed over the past few years. While we can’t really avoid rising fuel prices, we can quite easily make sure we get the best possible deal on our car insurance policies.
In October 2016 motor insurance premiums rose by an average of £109 compared with the previous year, according to financial website thisismoney.co.uk. Now, more than ever, people are looking at ways to reduce their car insurance premiums to more affordable levels.
We’d like to share with you 10 money-saving tricks which should help keep your premiums down:
- Shop around
If, like the majority of motorists, you simply renew your cover each year with your existing insurers, then think again. You may well be able to find car insurance that’s far more economical somewhere else.
These days, the car insurance market is notoriously competitive, so it’s a good idea to search online or get on the phone and bargain as much as you can. In so doing, bear in mind some of the following pointers that insurers look out for – they could reduce risk and therefore the price of your quote.
- Keep your vehicle safe
Putting it safely in a garage and not on the street protects it from damage as well as theft. Malcolm Tarling of the Association of British Insurers says: “As cars evolve, so do the criminals. Theft from a vehicle is still a problem and my neighbour recently had the catalytic converter stolen from his car when it was parked on his drive.”
Criminals are often more visible on your driveway than on the street so the nearer your car is to your property, the less likely it is to be targeted. Insurers like cars to be kept in garages, especially overnight, and this can dramatically reduce your premium – often by up to 10 per cent.
Anyone pretending to insurers that they have a garage could suffer devastating consequences; supplying false information could invalidate your entire insurance policy, should you need to claim.
A car alarm or other kind of security device like an immobiliser can cut the cost of your insurance premium because they render your car more difficult to steal. You might also fit locking wheel nuts, a steering wheel lock and a GPS tracking system.
- Install black-box telematics
How and when you drive can often lead to cheaper policies. Telematics insurers install a Black Box system in your car to monitor your driving habits and reward you with a lower premium – often around 44 per cent lower – than previously.
- Pay once only
Spreading payments over monthly or quarterly instalments can prove to be more expensive than paying up front. Many insurers charge as much as 24 per cent interest for the privilege, which can add around £60 to the cost of your policy.
- Increase your excess
The greater the excess (the amount you are required to pay towards a claim), the lower the cost of your premium will be. Therefore, if you are a safe driver and wish to risk agreeing to pay more towards the cost of any accident repairs, a high excess amount could greatly reduce the cost of your premium. Bear in mind that if you are not at fault in an accident, the excess you paid can often be recovered.
However, try to resist the temptation to allow the excess amount to rise too high, especially if you have a low value car for which you might be exposed to inappropriately high costs if you have a prang.
- Be aware of named drivers
Reducing the number of named drivers on your policywill in turn reduce the cost of your premium. However, in the case of young drivers, your premium will be based on the youngest named driver who will often not have a no-claims bonus, thereby bumping up the cost.
Insurers have been cracking down on “fronting” where some parents fraudulently insure cars in their name on behalf of their higher risk children in order to reduce motor insurance costs.Make sure you are actually the “main driver” of a car driven by your children. If not, fronting could prove to be a false economy: Your policy will be rendered invalid in the rather likely event of a claim. What’s more, the young driver could be fined up to £5,000, get points on their licence, face prosecution or even get an automatic driving ban.
- Choose a low-premium car
Generally the smaller, less powerful the car, the cheaper it will be to insure. So if you are driving a vehicle which attracts high premiums, you might consider saving money by purchasing one belonging to a lower insurance group instead.
It’s a good idea to check out the insurance cost for the car make and model you intend to purchase beforehand. Sporty, prestige cars can often mean high premiums, particularly for young drivers. A slightly different model or a smaller engine size can make a significant difference to your premium amount, let alone the cost of the petrol.
If you’re making a change to a policy mid-term, be aware that insurers will sometimes include administration fees (usually between £25 and £50) for a change; however, you might be able to get the fee waived if the alteration is minor. If not and it proves costly, you might consider being patient and waiting until your existing policy expires to buy your dream car.
- Steer clear of driving convictions
A driving offence will normally affect car insurance premiums, meaning you have to pay more for your car insurance. Insurers feel you are more likely to make a claim on your car insurance, so will insist on knowing your full driving history before insuring you. The number of Penalty Points you get on your licence depends on the severity of your driving conviction and the conviction code it comes under.
If you have points or a driving conviction, it’s a good idea to shop around for a quote as insurers will weight premiums differently, according to their own criteria while basing them on the severity and number of offences you have to your name.
A rehabilitation course can be a good way of attracting a discount on your policy, so make sure you notify the insurance company of your attendance. The courses cover speed awareness or drink driving and can mean money saved on your next policy.
- Establish a no-claims history
A long no-claims bonus is possibly the best way to drive down motor insurance costs. So build up a no-claims history as soon as possible by getting your own policy as the main driver and, of course, be careful not to have to claim for any accidents!
- State the right profession
Insurers base their premiums in accordance with strict underwriting categories. But not everyone fits into categories and if your job fits into more than, it’s a good idea to check the insurance quotes for each category before going ahead with a policy.
Obviously you can’t lie about your job or you would invalidate your policy. But if it genuinely falls into two categories, think about what they might mean from an insurance perspective. For example, if you’re a “journalist”, you might be stereotyped as high-risk paparazzi follower, possibly driving rich, litigious people about or leaving your car in the early hours to stalk celebrities through inner-cities, when in fact you are more a “writer” who rarely leaves the home office. The image they have of you and the cost of cover can vary dramatically. Bear in mind too that if you’re a full-time parent or retiree, be sure to tick the relevant box and not “unemployed” – it could save you up to £300 per year.
The Association of British Insurers explains: “For an unusual occupation, it pays to find an insurer who asks the right questions and understands your profession. The higher the premium, the less an insurer wants to cover you because you represent a greater risk.”