By Kate Saines
There’s nothing more likely to make you consider (however briefly) giving up driving than seeing the quote for your car insurance renewal.
It doesn’t matter how exemplary your driving has been for the last year, or how many no claims bonuses you’ve acquired, premiums just seem to increase year after year.
And if you are a woman, expect your premiums to soar next year when gender discrimination rules are introduced making it illegal for insurers to charge different premiums for women and men.
With all this in mind there really is more incentive than ever to find ways of reducing the cost of your car insurance.
And it doesn’t have to be dodgy or illegal. There are plenty of legitimate ways of saving money in this area and we have found 15 methods for you to attempt.
1: Buy a car that’s cheaper to insure
The type of car you drive is the first thing an insurer will look at when assessing your premiums. You probably don’t need us to tell you that a high-powered sports car with modifications is going to set you back far more than a modest run-around with a small engine.
If you are new to driving or the owner of a vehicle in the higher insurance group, choosing a car which costs less to buy will drastically reduce your premiums. Indeed, many of the vehicles which cost more to insure also cost more to run because fuel and tax are more expensive – so you’ll be saving money all round.
2. Switch insurers
Upon receiving your renewal quote, don’t automatically sign up. See if you can find a cheaper deal with another insurer.
Research from price comparison website Gocompare.com found 27 per cent of drivers allowed their policies to ‘auto-renew’ under the false apprehension they would be rewarded for loyalty.
But its figures suggest people could save as much as £325 by spending some time comparing prices of other insurers. Use the Myfinances.co.uk comparison tools, powered by Confused.com to find a better deal.
John Miles of Gocompare said: “Our advice is simple, look at your renewal notice as soon as it arrives and compare the price and cover against last year’s documents.
“Consider any changes you might need to make to the cover and take a look at similar policies on a comparison website to see if you can make any savings.”
If you do decide to switch, make sure you notify your current insurer or you might pay a cancellation fee if they automatically renew your policy. Meanwhile, if you are a new driver, shopping around and comparing deals will also help you find the cheapest policy.
3. Secure your car
Although most cars are installed with alarms when they are built, if you have an old vehicle you might want to consider buying one. The same applies for immobilisers. Having both these security devices in your car could mean you get cheaper car insurance.
4. Increase the voluntary excess
If an accident is your fault you will pay an excess, which is the first part of the claim. If you increase the amount you pay in voluntary excess you could lower the cost of your premium.
The Association of British Insurers (ABI) recommends this method because most insurers work on the basis of the higher the excess, the lower the premium.
5. New driver? Get insured as a named driver
If you are new to driving, young and finding four-figure insurance quotes extortionate think about becoming a named driver on your parent’s policy.
It will involve sharing their car and will mean you do not build up your own no-claim’s bonus, but it will provide you with wheels at a cheaper cost at least until you are better able to afford your own insurance.
Remember, however, it is illegal to tell an insurer your parent is the main driver on your own car.
6. Pay your whole premium upfront
Paying your entire premium at once is cheaper than paying in monthly instalments. That is according to research by Moneysupermarket.com which found motorists making monthly repayments paid on average an additional 10.6 per cent extra on the cost of the original premium.
Pete Harrison, car insurance expert at the website, said: “Paying for your car cover on a monthly basis is a good way of keeping your initial outlay for car insurance down.
“However, whilst this may be a more convenient and manageable way for you to pay for your cover, it’s crucial to make sure you’re aware of the additional costs involved.”
7. Pay with a zero per cent credit card
If you cannot afford to pay the cost upfront, consider using a zero per cent on purchases credit card to make the payment.
This way you will still be able to make monthly repayments, but you will not incur the additional insurer’s costs and will not be paying interest to the credit card company.
Look out for a card offering this deal for nine to 12 months as this will help spread the cost.
Pete Harrison of Moneysupermarket offered a warning to anyone considering this technique. He said: “You need to be disciplined if you use a credit card, and aim to pay off the balance before the end of the promotional period, and within 12 months if the promotion is longer otherwise you’ll still be paying when your insurance is up for renewal.”
8. Watch out for any good deals
It’s always worth keeping your ear to the ground for any promotions or deals on car insurance. At the moment money saving website ILoveCashback.com is guaranteeing £20 cashback for any car insurance policy taken out through the site.
There are 70 car insurance deals to compare on the website, which offers free registration and promises motorists the choice of the cheapest policies around.
Have a question on car insurance? Ask our insurance expert
9. Tell your insurer if your circumstances change
If you use your car for work, but a change of jobs mean you start using public transport or use your car less – be sure to tell your insurer. Insurance for cars which are only used for social, domestic or pleasure purposes tend to be cheaper than for vehicles used for commuting.
10. Reduce your mileage
Likewise, if anything else occurs in your life which means you drive your car less, such as your children no longer requiring lifts to school, moving house to a location closer to work or a named driver not using your vehicle any more, get on the phone to the insurer.
This is because a reduction in mileage can result in a lower quote. If there are any other ways you can think of to reduce your mileage – for example getting involved with a lift sharing scheme for the school run or commute to work – this could also help, whilst also reducing fuel costs.
11. Drive more safely
This one might be obvious, but being caught driving too fast by a speed camera or traffic police officer will mean your car insurance will soar. Indeed, being convicted of any driving offence will increase your premiums or even jeopardise your chances of getting insurance in the future.
Paying attention to the speed limit and practising good driving behaviour can only be a bonus.
12. Buy a ‘telematics’, ‘black box’ or ‘pay as you drive’ insurance policy
A number of insurers are now offering a new service which involves the installation of a ‘black box’ (sometimes called a clear box) into the dash board to monitor driving behaviour.
This piece of technology assesses certain criteria and this information is then picked up by the insurer who rewards careful driving with bonus points, which usually results in a fall in premiums, and penalises risky drivers with increased insurance.
Currently there are a few specialist insurers providing the service. Insurethebox, one such firm, has just released statistics revealing around two thirds of its policyholders who received renewal notices in July and August were offered cuts in their insurance compared to last year.
Some customers saw savings of as much as £800. But the average renewal saving was 22 per cent of the previous year’s premium. Other general insurers such as the AA and The Co-operative Financial Services are also introducing the scheme.
Mike Brockman, chief executive of Insurethebox, explained the concept: “If everyone received the same favourable terms on renewal, then good motorists would be subsidising less responsible road users.
“We are empowering car owners to control their costs – as long as they buy into our approach,” he said.
13. Advanced driving lessons
Advanced driving lessons, such as the Pass Plus scheme, are an excellent way of improving new drivers’ confidence and therefore their safety on the road. And safer driving can lead to cheaper insurance premiums in the future.
Some car insurance experts suggest taking the course will also help reduce your premiums because some insurers offer discounts to drivers who have been through Pass Plus. However, the AA warns that this is no longer the case.
Simon Douglas, director of AA insurance, said the scheme had become discredited because so many young drivers were taking it to get insurance discounts. He is calling for a radical overhaul of post-driving test education for young drivers, particularly speed awareness training, to improve safety on the road.
14. Be honest
Tempting as it might seem to mislead your insurer about the amount of mileage you cover, your address or another vital piece of information to reduce your premium, this might actually result in you paying more in the long run.
Upon making a claim, if your insurer uncovered the lie, it is possible your claim will be rejected. Invalidating your policy is certainly not going to save you money over time.
Find out more: How to avoid car insurance fraud
15. Don’t necessarily buy the cheapest policy
While this tip might sound ridiculous in a feature on how to save money, there is a method to our madness.
Mike Powell, insight analyst for general insurance at financial research company Defaqto, has warned while price is important when choosing car insurance, pinpointing the right features and identifying policies providing that cover is more essential.
“After all,” he explained, “buying the cheapest cover available could end up being the most expensive option if it doesn’t provide adequate cover for someone’s new car.”
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