Car insurance premiums went up by 9% in 2016 to an average of £440, so it’s more important than ever to do whatever you can to cut its cost. The rise has partly been driven by two increases in Insurance Premium Tax made in 2016 that have taken it up to 10%. The cost of repairing cars has also risen along with the average injury claim made by people who’ve been in car accidents.
Our comprehensive car insurance guide looks at the different types of car insurance, including short-term insurance, and gives you tips for cutting costs, including choosing a telematics or ‘black box’ policy. It also answers your most frequently asked car insurance questions, gives you a jargon buster and explains how to make an insurance claim.
Top 10 tips to cut the cost of insurance
1. Opt for the lowest insurance group
The biggest deciding factor in the cost of cover is your car’s insurance band, which is based on a range of parameters, including the driver assistance systems fitted, its security kit and how much it’ll cost to repair if it’s involved in an accident.
While you can’t mitigate all of those things, you could save money by opting for a model with the latest automatic driver safety aids. If these are optional extras, do consider adding them, or if they are standard on a higher trim level opt for that to save money.
2. Improve your car’s security
If your car doesn’t have an alarm and immobiliser, fitting an approved one, such as a Thatcham 1 or Thatcham 2 system, should reduce your premiums. More than half of all vehicle thefts occur at night. Keeping your car in a locked garage will help to protect it from thieves and vandals, and reduce your premium. If you don't have access to a garage, parking your car on a driveway is better than leaving it on the street.
3. Drive fewer miles
Voluntarily limiting your mileage will also have a positive impact on your bill. The fewer miles you cover, the lower the statistical likelihood of you being involved in an accident - and the insurance company will take this into account. Don't be tempted to lie about your mileage, though, because if you exceed the agreed amount you may have to pay an extra fee or it could invalidate your policy.
4. Drive smart to save cash
Motoring transgressions that put penalty points on your licence will also put pounds on your premium, so drive carefully. If you do end up being caught for speeding, taking a speed awareness course if it's offered will suspend any points that would otherwise be put on your licence - and the cost of the course could well be less than increase that you'd face on your premium.
5. Protect your no claims bonus
Equally, if you have a minor accident it can be cheaper overall to pay for the repairs yourself because building up a no-claims discount could halve your premiums after five years.
6. Do an advanced driving course
Completing an advanced driving course, such as the Driving Standards Agency's Pass Plus (aimed at newly qualified drivers), or one of IAM RoadSmart’s suite of courses, could reduce your premium by up to 35%.
7. Get a ‘black box’ policy
A growing number of insurers are offering telematics policies, which use a ‘black box’ to monitor your driving habits and rewards you for good driving habits. This type of cover suits low-mileage drivers and those who don't drive late at night; it's also especially beneficial to young drivers who could otherwise be priced out of standard insurance.
8. Shop around for insurance
Around 7.3 million UK drivers simply stay with their current insurance provider when their policy comes up for renewal – even though 90% of them know they'll probably get a better deal elsewhere. Customer loyalty has little or no value with motor insurance, so rather than simply accepting a renewal quote, you need to minimise your costs by shopping around for the best possible deal.
9. More excess means less
Agreeing to increase your excess – the amount you pay towards any claim, typically around £250 – is another useful money-saving tip that financially rewards careful drivers because most insurers respond with a lower premium.
10. Pay up front
Finally, you should try to find the money for insurance in one lump if you can. Paying the entire bill up front will be cheaper than opting for the tempting monthly installments, which will include interest charges and possibly admin fees.
Click through to the next page for part 2 of our complete car insurance guide
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