Car insurance is a legal requirement in the UK and can be expensive. The average cost of an annual comprehensive car insurance policy was £560 in January 2023, according to data collected by MoneySuperMarket.
In this article, we share 10 money-saving tips to help you save money on your car insurance policy.
1. Shop around
Shopping around for your car insurance is one of the easiest ways to save money. Using comparison sites make this easier, although not all insurance companies - such as Direct Line - are listed on them. When comparing car insurance quotes it is often better to compare quotes from multiple comparison sites and insurers to find the cheapest deal. We have partnered with Quotezone* to allow you to search and compare quotes from over 110 UK car insurance providers.
2. Pay your premium annually
If possible always pay your premium annually as monthly premiums will normally carry a credit charge, this can make a significant addition to the premium. Damien explains more in the following video:
3. Be a careful driver
Getting points on your licence and being involved in accidents can increase the cost of your insurance policy as you are usually seen as a higher risk. This is especially significant for younger drivers who could see a significant jump in their policy costs.
Maintaining your no-claims by not claiming on your insurance can also help you to save money on your car insurance premium. The greater your no-claims bonus the more you are likely to save with insurers.
4. Buy a car with a low group ranking
All cars are grouped for insurance purposes measured on performance and cost of repairs, the higher the group the dearer the cost of insurance. Do your research to make sure you keep the insurance group as low as possible when buying a car. Find out more in our article, 'Cheapest cars to insure in the UK'.
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5. Secure your car
All insurance companies will want to know where your vehicle is kept overnight. Parking your car in a garage or on a driveway is likely to reduce the cost of your car insurance policy. You could also make your car insurance cheaper with additional security such as immobilisers and tracking devices.
6. Increase the excess
All insurance policies will carry an excess that you will have to pay in the event of a claim. You can increase the excess on most policies which, in turn, should reduce your premiums. One thing to consider, however, is that the excess is the amount payable upon a claim so you need to ensure that this amount is affordable.
7. Add another named driver
Adding an older or more experienced driver to your insurance policy can actually reduce the premium. This is because the insurance provider will assume that the driving is shared between drivers. The main driver of the car insurance policy needs to be the person that drives the car the most otherwise you could be seen to be 'fronting'. Fronting is when an older, more experienced driver is named as the main driver on a car to reduce the cost of the insurance premium. Fronting is illegal and can invalidate the insurance policy.
8. Consider pay-as-you-go/telematics insurance
It is possible to get telematics car insurance which monitors drivers using a GPS device fitted to the car. The telematics device monitors driving habits or how much you are driving and can reduce your car insurance policy as a result. These policies are typically aimed at younger drivers, making it more costly to drive at high-risk times, like during the hours of darkness.
9. Drive less
Typically, the more miles you drive the more expensive your car insurance will be. In addition, if you don't use your car to commute to and from work you could save money on your premium by registering it as social use only.
10. Cut down on policy extras
When taking out a car insurance policy it can be easy to insure things that you do not need. Look out for additional extras such as windscreen cover and courtesy car cover. If this is something that you do not need, removing it from your policy may reduce the cost of your premium.
What to do if you cannot afford your car insurance premium
Car insurance is a legal requirement if you are driving on UK roads so you need to ensure you keep up with your monthly payments. If you are having trouble making the car insurance payments contact your car insurance provider as soon as possible as they may be able to offer you support such as an alternative product with lower premiums or agreeing on an affordable repayment plan. Cancelling your car insurance policy will leave you uninsured and you could face a fine and points on your licence.
If you are feeling overwhelmed with financial problems there are a number of charities that offer free debt help and advice. We list some of these below:
- Citizens Advice
- MoneyHelper (formally the Money Advice Service)
- National Debtline
- The money charity
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