Insurance Guide

Top 10 tips for saving money on your car insurance

Here are the 10 best ways to save money on your car insurance.

* 12% of customers who received a motor insurance quote between 1st January and 31st March 2009 and provided a best alternative price saved £205.80

1. Shop around

Instead of accepting the renewal quote from your existing insurer, shop around for a cheaper premium from a competitor. Likewise, if you’re buying a new car don’t accept the dealer’s insurance offer without comparing prices first.

Internet comparison sites such as Confused.com make this easy. By filling in one form you can get quotes from 97% of insurers in the market. The difference between the highest and lowest quotes can be hundreds of pounds.

Get an instant quote from Confused.com

2. Pay annually

If possible pay your premium upfront in one payment. If you opt to spread payments and pay by monthly direct debit instead you will be charged interest. This can add up to 25% onto the quoted price.

If you can’t afford to pay the whole premium at once, consider taking out a 0% credit card to spread the cost, but you will need a good credit history to be approved for one.

3. Be a good driver

Not causing any accidents or making any claims will earn you a no claims bonus which will qualify you for discounts on future premiums. The no claims discount can be transferred between insurance companies and you could get up to 75% discount on typical prices if you manage to stay claim-free for five years.

Some insurers also give you the option of paying to protect your no claims bonus so that one prang doesn’t wipe out years of careful driving. Insurers also look at any endorsements on your driving licence so keep your speed down and don’t use your mobile while behind the wheel.

4. Buy a cheaper car

Cars are given an insurance group ranking based on the level of risk involved with each car type and group (based on likely repair costs). Generally, high-powered performance cars will be in the highest priced group, whereas a small car will be generally lower ranked and therefore should attract cheaper car insurance.

Also, go easy on the modifications – noisy exhausts, “go faster” stripes and souped-up engines will all add pounds to any insurance quote. A car alarm or immobiliser, however, will lower the cost.

5. Park off-road

One of the questions insurers ask applicants is where they usually park their car overnight. Securing it in a locked garage is the best option but parking it off-road on a driveway or in a private space is good too.

Also make sure you fit an immobiliser and car alarm.

Your postcode is another factor – but not one you can do much about. Insurers will hike your premium if you live in what is deemed as a high risk area such as a city centre or an area with a high crime rate.

6. Increase your excess

When you ask for a car insurance quote you will be asked what level of excess you want to pay. The excess is the amount you will have to contribute to any repair or claim before the insurance kicks in.

The higher the excess the less chance the insurer will have to pay anything at all so the lower the quote. But if you opt for a high excess consider whether you could really afford to pay this amount in the event of an accident.

7. Add another driver

Surprisingly adding another driver to your premium can reduce what you pay. Older drivers with a good driving history – maybe one of your parents - are best. Married or co-habiting couples also pay less than singletons, so if you’re coupled up make sure you tell your insurer.

8. Consider pay-as-you-go

A couple of insurers offer pay-as-you-go insurance and monitor your driving habits by fitting a GPS device to your car. These policies tend to be aimed at younger drivers and aim to dissuade people from driving at night when most accidents happen. They can be worthwhile if you don’t drive much and stay off the road between 11pm and 6am.

9. Drive less

When you get a quote for car insurance, insurers will ask you what you use your car for – social, commuting or business (or any combination of these). If you don’t use your car for business purposes or getting to work then just tick “social” and your premium will be cheaper.

You will also be asked your annual mileage and less miles generally results in a cheaper premium.

10. Cut down on policy extras

Courtesy cars, cover abroad and being covered to drive other people’s cars might be useful but consider whether you will really need them. If you have a second car or could survive without a vehicle for a few days, paying for a free courtesy car is probably a waste of money.

Some insurers also offer “handbag cover” but the contents of your bag are usually covered by your home insurance policy so you could probably forgo this cover. Meanwhile physiotherapy cover could already be covered if you have a private medical insurance policy.

* 12% of customers who received a motor insurance quote between 1st January and 31st March 2009 and provided a best alternative price saved £205.80

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