THE costs of car insurance can drive motorists mad but it is an essential cost when running a motor.
Here is how to cut down the costs of your car cover.
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What is car insurance?
It is illegal to own and use an uninsured vehicle unless you have declared it off-road with the Driver and Vehicle Licensing Agency.
Failing to insure your car could land you with a minimum £300 fine and six points on your licence, plus your car could even be seized by the police.
Car insurance is beneficial as it can cover a large repair bill if your vehicle is damaged in an accident and may payout if your motor is stolen.
What does car insurance cover?
There are three types of car insurance that provide different levels of cover.
Third party is the most basic level of cover that will let you legally drive on UK roads.
It covers claims for damage to someone else’s vehicle and injuries you may have caused to someone else in an accident.
Another option is third party fire and theft, which covers damage or injury that you have caused in a car accident as well as if your motor is damaged due to fire or theft.
The highest level of cover is fully comprehensive.
This covers if your motor is stolen, damage and injury caused to someone else and their vehicle as well as for you and your car.
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How much is car insurance?
There are lots of factors that go into the cost of car insurance.
It depends on your age, the vehicle you are driving, how often you driver and any previous claims.
Your job, where you live and where your car is kept overnight can also influence pricing.
Many of these factors are outside of your control, but here is how to cut some of your car insurance costs.
Plus read our guide to finding the best cheap car insurance here for even more tips.
Go fully comprehensive
Third-party cover is often thought to be the cheapest as it has fewer features.
But fully comprehensive policies can actually be cheaper as insuers may associate third-party cover with higher risk drivers looking for cheap deals.
Fully comprehensive can also work out cheaper if you do have to make a claim as it will cover the cost of fixing or replacing your vehicle, which you won’t get through a third party policy.
Increase your excess
There are two costs associated with car insurance, the premium and the excess.
The premium is the amount you pay for your insurance while the excess is what you agree to pay each time you make a claim.
You can usually choose your own excess when setting up a policy and it can be as low as £100.
However, the higher your excess, the lower your premium and vice versa so you could bring the cost of your insurance down by agreeing to pay more if you do need to make a claim.
You are then likely to save money as long as you never have to use the insurance.
Pay upfront
Your insurers will give you two choices when purchasing your car car.
You can usually either pay monthly or upfront.
Paying monthly helps spread the cost of your cover but the insurer will add extra interest charges so you actually end up paying more overall.
It may be tricky to get a lump sum together to pay upfront but it can save you money as there are no extra charges.
Shop around before renewing
Insurers rely on customer inertia to make money.
Car insurance policies typically auto-renew when a contract comes to an end.
This may be more convenient but insurers rarely offer the best deals to their existing customers.
(AD) How to find the best car insurance for your needs
WITH car insurance quotes depending on so many different factors, it really pays to shop around for the best deal for you.
New rules introduced this year ban insurers from charging existing customers more than new ones but you can also save money by shopping around before your deal expires.
Use comparison websites or check how much you could save direct with other insurers and also see if your current provider can match or beat rival offers.
Check your mileage
An insurer will consider how much you use your car when pricing a policy.
You will be asked how many miles you drive each year such as up to 1,000, 2,000 or 3,000.
It may be worth contacting your insurer if your driving habits have changed or consider how much you drive if you have reduced your car use since you setup your policy otherwise you could be overpaying.
Change your job title
Some jobs are seen as more risky than others for insurance purposes.
Making small but accurate changes to your job title or profession may save you money.
For example, if you list your job as a journalist, the insurer may assume you are driving to lots of risky places to pickup exclusive stories.
But it may be more accurate to describe yourself as an editor, writer or publisher if you are mainly office based, which could bring your premiums down.
Lying about your job could invalidate your policy so make sure any tweaks are legitimate and accurate.
Add a driver
Younger drivers or those with a history of claims can face higher premiums.
But you could cut your insurance costs by sharing your car with someone else who has a decent insurance track record.
A young driver could add one of their parents to their policy and this may bring their premiums down as the insurer will be reassured that the car will sometimes be used by a more experienced driver.
Change your car
The car you drive could be pushing up your insurance costs.
Insurers group cars into certain insurance bands based on their make, size and the cost of replacement parts.
Pricey, faster and high-spec cars can cost more to insure as they may be at higher risk of getting into accidents.
It could be worth shopping around for cheaper models or different brands if you want to save money on your insurance..
You can check which band your car is in on the Thatcham website.
Consider black box insurance
An alternative to paying a set upfront or monthly cost for your insurance is to use black box or telematics cover.
This lets an insurer install a device in your car that tracks how you drive such as your speed and braking.
You are given a driving score and your premium may then change based on your performance each month or when you renew.
The idea is that the better your drive, the lower your premiums.
Use cashback websites
Websites such as Quidco and TopCashback may pay you money for purchasing car insurance with certain providers.
Check their websites for offers and you will be able to click through to complete a switch.
This shouldn’t be the main factor when choosing insurance though as you need to ensure it provides the right level of cover and is appropriate for your needs.
Don’t forget to shop around when insuring your home. Find out how to find the best home insurance deals.
Holiday cover costs can also vary. Here is how to find the best travel insurance.
Important Information
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