How much does car insurance cost?
The cost of car insurance boils down to the value you put on your car as a driver.
The drivers at one end of the scale are those who have a modest budget and can only afford a ‘pre-loved’ car.
These drivers tend to buy basic third party insurance because if the car is damaged or stolen, they know it’s not worth repairing or replacing.
Many of these drivers do not intend to make any insurance claim, but just want to stay within the law. They are looking for the cheapest car insurance that can legally put them on the road and are not willing to pay a penny more than they have to for it.
- Third party only is the cheapest option and only covers damage you cause to the third party’s car and any injuries to other drivers, road-users and passengers, including those in your car.
- The policy also covers you against the costs of any emergency treatment you need as a result of the accident.
- Third party fire and theft is a leg up, covering you for the same as third party only but also fire, theft and attempted theft.
At the other end of the scale are drivers who take pride in their car and love driving.
These drivers tend to buy comprehensive insurance with lots of add-ons because they want to keep their car in as near to showroom condition as possible.
- Comprehensive insurance is the most expensive type cover and comes with lots of optional add-ons like courtesy cars, cover for personal possessions in the car and legal cover. Both you and your car are protected, as is any third party.
The rest of us tend to fall somewhere between the two, depending on our budgets.
Providing you have the minimum third party cover as a driver, you comply with the law.
The next big factor that affects the cost of your car insurance, well, we’re sorry to say, it’s you again.
Complacency is another key reason why too many of people tend to pay more for their car insurance than they need to. When it comes to renewing car insurance, too many people just accept the existing insurer’s quote without bothering to look around and see if they could get a better deal elsewhere.
Using an insurance comparison web site for example, means, they might find a deal that offers the same or similar cover for less money.
The car insurance market is competitive and lots of insurers will offer incentives for you to switch cover to them.
By now, you should see that the biggest factor affecting the cost of your car insurance is probably you.
The price you pay for your car insurance is the consequence of your choices as a driver over the car you drive, your attitude towards your car and the expectations you have as value-for-money from your insurer.
If you want to save money, you may have to change the way you think about your car
Getting the best deals on your insurance
We all need some form of insurance at some point in our lives. Insurance can provide some form of financial reassurance when we hit the hot spots in life. There are many types of popular insurance such as home insurance, car insurance, unemployment insurance and many, many more, some of which are compulsory, such as car insurance. Getting the best deals on your insurance has become a lot easier in recent years especially due to widespread use of the Internet.
There are many online resources available for people looking for the more popular types of insurance. You can usually find an insurance comparison web site that will compare some of the main, basic features of insurance policies for you. Even if these web sties do not give you all of the information you will finally need to make a decision, they can serve as a good launching pad for your insurance policy search. These web sites will give you a clear idea of current rates and the standard features you can expect on most insurance policies of that type. They offer a place to begin your search.
Once you have gathered some foundational information on a few insurance policies you can begin to investigate deeper and gather more information on a few of the policies that appealed to you. If there is specific coverage that you need that does not necessarily fall under the norm, it is in the more details policy descriptions that you will find the information you are looking for. By comparing policies first for their basic features and then drilling down deeper you will have more chances of getting the best deals on your insurance.
Buying insurance through the Internet is probably the least expensive way to purchase insurance. It can be a good way of getting the best deals on your insurance. The minimal manpower and cost of running an Internet web site usually gets passed on to you the customer. Even if you are a person that does not use the Internet very often, it is worth the savings to find a way to use the Internet at least for insurance purchases.
Getting great insurance deals
- Shop around to compare policies
- Visit an insurance comparison web site
- Find a few policies that have the basic features you want
- Investigate selected polices further to see if they fully meet your needs
- Sign up with the right policy for you
You can find all types of insurance policies online sold by all different types of insurance companies. The benefit of this is that you have a myriad of options and policies to choose from. If you have special insurance needs or things that potentially place you in a unique insurance category, your best changes of finding the exact policy that you are looking for is online.
Actually buying insurance online is fairly easy and it is an excellent way of getting the best deals on your insurance. You will in most cases need a major credit card. Sometimes a debit card will do. The important thing, as with buying from any web site, is to ensure that the page where you enter your credit card number is secure. This prevents interception and theft of your personal details.
How to Get the Best Deal on your Utilities by Using a Comparison Site
No one likes to feel as though they’re paying more than they have to for their utilities, especially in times of financial strife, and as such it’s becoming more and more common to use an online price comparison site to check for better deals.
Why use a comparison website? Do they really work? Here are five reasons you might want to consider it:
1. They’re easy to find, and to use.
If you’ve ever wondered why every other advert on the TV these days seems to be for a price comparison website, you’re no doubt not alone – they really are everywhere on the internet, and as such you have a wide variety of options available to use. If you don’t like the layout or the rating systems or the provider coverage of one website, you can easily find another one that better suits your needs. Better yet, the comparison websites know that they’re competing with so many alternative sites, and as such have been forced to up their game – as a result, you can expect any of the major comparison sites to be easy to use, in order to prevent them losing the custom of less tech-savvy individuals. If that includes you, don’t be afraid to give them a shot, as you might be pleasantly surprised at how easy it is.
2. They’re fast.
People always say you should be willing to switch your utilities provider at a moment’s notice, but that can be very unfeasible, especially if you have to phone up each of the companies individually and ask for a quote. Comparison websites take a lot of the fuss out of that by letting you see exactly what’s available where, and how much it will cost you.
3. They’re cheap.
Comparison sites are a business: they provide a service, and they have to make money somehow. Previously, it used to be the case that this would be as a result of a commission from the insurance policies they places. Of course, by doing this all that happened was the insurance companies hiked up their prices to match, and the customer ended up paying. Now, however, it’s becoming much more common for comparison sites to sell advertising space and get revenue that way, saving the customer money. Having said that, even if you were charged a commission, it’s entirely feasible that the money you save on insurance could more than negate this, and still leave you with more money in your pocket at the end of the day.
4. They’re updated regularly.
One of the wonders of the internet is how rapidly things can be changed. If you’re using a comparison site, you know that the information given has taken the latest fluctuations into account – what you see is what you get, so you can make decisions accordingly.
5. They often give good advice.
Comparison sites are branching out in their efforts to provide a better service. Now, it’s not only the case that you can expect to find a comparison chart on their site, but many include articles about utility switching and how to go about it – an often invaluable resource that’s worth a read.
Are you being overcharged for your pet medication?
Did you know that you may be paying more than you have to for your pet’s special diet foods, health supplements and medication? Take, for example, Mrs H, whose pet cat Kirby was prescribed a potassium supplement. The 4oz container from her vets cost £62.40. When the product had nearly been used up after a few months, there were problems getting it from her vet who had to ‘order it in’ as it was ‘special’. Desperate, Mrs H found the same product at the same weight for £29.99 online at one of the small number of pet prescription websites that have sprung up in recent years. Luckily for her, the product was a non-prescription item and she ordered it there and then.
You may also find that your usual preventative flea treatments work out cheaper if you look around online too. Companies who offer this sort of service include www.petdispensary.co.uk and www.petmeds.co.uk.
Similarly, when Mrs H asked her vet for some furball paste for Kirby, the cost was £18 for a 20g tube. Online a similar brand currently costs £7.50 for a 70g tube!
Prescription medications
However, even if your pet is on prescription drugs, you may still be able to make savings on the cost of your furry friend’s medications. All you need is a prescription from your vet – however, do bear in mind that he or she may not be happy about you buying the medications somewhere else, because they could well be losing out on making a profit on it.
Legally the vet can charge you to write a prescription and this may be anywhere from £5 up to £15. However, if you ask for a prescription for 6 months’ medications, you may still find it cheaper overall to buy the prescription from your vet and then get the medications online.
When ordering your pet’s medications online, you’ll be asked to supply a copy of the prescription before your order is despatched. It’s a simple process and one that can potentially save you a lot of money.
Special diet foods
It is also useful to note that even if your pet is insured, special diet food is often not covered under a pet insurance policy. Again, going online for special pet diet may work out cheaper than buying it from your vet.
Money Saving Tips
Whether times are good or bad financially speaking, there is rarely any valid reason to waste money by paying more than is necessary for products and services. It is equally unnecessary to have money tied up uselessly.
Many people are surprised at how much money they can save, and how much money they can ‘free up’ by progressing a few basic ideas that are both good for the pocket and in some cases, good for the environment also.
Manage the consumption of heating energy.
Whatever the fuel source is, fuel is expensive. The advantages of insulation and energy efficient boilers are well known, but is it necessary to heat the house to T-shirt level? Turn the thermostat down a degree or two and put on a jumper – the savings will be significant over a winter.
Shop Around.
There is something to be said for convenience but don’t give in to the siren-like calls of that one big shop just down the road. Be prepared to walk around a little to compare prices. Even easier, use the Internet or phone to compare prices on those slightly bigger purchases. The savings can be dramatic.
Negotiate!
Many people in the UK find haggling and asking for discounts to be something of an embarrassment. This is completely different to many other European countries where the first asking or ticket price is rarely paid. Sometimes asking for that deal or reduction can save a small fortune. Be prepared to haggle and if necessary, to walk-away and go elsewhere.
Buy through the Internet
The Internet is not only useful for comparing prices of products on the high street, but purchasing items through the Internet can also save large amounts of money. Many retailers will offer significant discounts for on-line purchases, as it is far cheaper for them to sell online than through a normal store.
Make more food.
The cost of ready-made meals (lunches, take-aways etc) can be very high when checked against what is actually in the package. Convenience is fine, but buying fresh food and preparing more lunches and meals will save a lot of money each month and very possibly be healthier.
Throw Away Less.
Instead of having that quarterly ‘trip to the tip’ to clear out the garage or loft, consider instead how much of it could be sold. These days it is very easy to sell surplus items through websites such as Amazon or EBay etc. The prices received may not always be high, but again over a year they could mount up. Or why not do a boot fair?
Buy in Bulk.
In many areas of life such as foodstuffs, DIY materials and household goods, it is always possible to buy at huge discounts if buying in bulk quantities. Contact neighbours and families to form a ‘purchasing association’ and make these sorts of purchases in larger quantities. The savings for everyone will be very worth having.
Leave The Car At Home
Cars are VERY expensive to run and a massive cost component in the budget of many families. Statistics also show that the vast majority of car journeys are short hop ‘convenience’ journeys to the local shop etc. Try walking or using a bicycle. This will also be healthier.
Check Baseline Household Costs.
In the modern world there is ferocious competition between utility companies (phones, electricity etc) and as a result, some staggering deals to be had. This is also true in financial services covering things such as your household, car insurance or savings policies etc. Check around to see what these are and be prepared to change supplier – it is easy.
Increase DIY.
Many minor jobs around the home do not require a specialist tradesperson. Labour costs are expensive and if it can be safely done on a DIY basis then the purchase of a good DIY book and the liberal use of some elbow grease could save a lot of cash!
- Lots of money can be saved in day-to-day life
- Shop around
- Don’t throw things away but sell them instead
- Be prepared to do more yourself.
Beating the credit crunch
Dealing with economic challenges and beating the credit crunch is more difficult for people already struggling with large amounts of debt and high interest rates. Finding options to make your credit more manageable are a bit tougher during tightened credit market periods. However, there are some great tips that can help anyone, regardless of your current situation, better maneuver through the credit challenges. There are several opportunities to cut expenses and find savings.
One of the first areas in which consumers can more effectively negative the tight credit market is in the retail sector. Retail businesses, like consumers, are struggling to drive sales and make money. Stores, and especially online retailers, have slashed prices across the board in many cases. Steep discounts are available, so shopping wisely to find the best prices on the products you need is a great way to beat the credit crunch. There are also some great budget-priced or discount-driven stores that provide regular, ongoing price breaks. Now might be a good time to learn about value-priced retailers in your area. There are also some retailers that run mailing lists and provide discount vouchers or rebate offers to customers. Look into signing up for some of them.
Another way to make it through is to reduce your level of borrowing. Historically, many consumers worked through their credit challenges by routinely moving from one creditor to the next to take advantage of zero per cent transfer opportunities and other deals. These deals are not readily available in a tight market. This is especially the case for those that are already stuck with high credit balances. As such, it is important to improve your current credit situation by paying off as much debt as possible. Start first with higher rate balances and meet all other minimum payment obligations. People with savings are likely earning less on savings accounts than they pay in credit balance interest. Thus, it is smarter to use savings funds to pay down high rate credit balances.
Beating the credit crunch requires discipline and proper financial management. Unfortunately, those that are in the most precarious positions likely lacked discipline when building up high amounts of debt. Still, the situation is not hopeless. The key is to look for all savings opportunities, cut costs, and reduce borrowing during the hard times. Eventually, when the credit sector recovers and credit is more available, there may be some nice opportunities to consolidate debt, reduce monthly payments, and lower the amount of interest paid on debt.
So, successfully beating the credit crunch is a battle of emotions and mentality. It is important to make decisions using logical judgement. Thus, do not panic if faced with a tough financial situation and significant debt. Take some time to sit down and explore all of the money saving and debt reducing opportunities. Remember these three tips:
- Look for discount price opportunities through retailers
- Reduce your level of borrowing to avoid worsening your credit situation
- Cut your expenses in whatever ways possible
Clean Up Your Credit Rating
When applying for a mortgage, you’ll have to become intimately familiar with the contents of your credit report. If it’s not up to date, it can be a real headache to try and get things sorted, and may stop you from getting the mortgage you want.
Here are seven tips to help you clean up your credit rating before you apply for a big loan:
1. Get your file.
First and foremost, you need to know what your credit rating says before you can try to improve it. You have a legal right to get a copy of your report from the three big bureaus (Experian, Call Credit and Equifax), so get in touch and make sure you’re well-informed about how you stand – it costs around £2, so it’s not a big outlay. Remember that each of the major rating companies uses a different system, so you won’t end up with just one universal score.
2. Make sure your details are correct.
Once you’ve got your file, go through it and make sure everything is up to date. This stops you being negatively affected (in case of an error not in your favour) or accused of fraud (if you don’t declare a false piece of information that would improve your credit rating).
3. Know what is and isn’t included.
Generally speaking, your credit profile is based on how well you’ve paid off loans you’ve had in the past, the amount and type of credit you currently have, and whether or not you’ve applied for credit at other institutions that are still pending. It’s very rare for your credit score to be affected by your age, race, gender, how long you’ve spent at your current job, your current income, your level of education, your marital status, geographic location, how long you’ve lived at your current address, and whether you own or rent the property you currently call home. That’s not to say that lending companies won’t look at these separately, of course, but the details that actually make up your credit report should be a top priority.
4. Make sure you’re on the electoral roll.
This is how credit reference agencies get your address. If you aren’t on the roll, this can cause a great deal of unnecessary fuss, which could slow your application down considerably.
5. Close any credit accounts you don’t use.
You credit rating is based partly on the amount of credit you have available, not the amount of credit you’ve actually used. If you have a credit card with a maximum balance of £2,000, it doesn’t matter if you’ve only used £50 of that credit – it counts as £2,000 worth of credit. Pay off any accounts you don’t use before you apply for a mortgage, and your credit report will look a lot cleaner.
6. Dissociate yourself from bad influences.
If a relative of yours has a bad credit rating, this can occasionally impact on you. If you have no legitimate financial connection to them (for example, parents to a grown child), you can ask to be dissociated from them. This can have a positive knock-on effect.
7. Pay bills on time.
This is one to make sure you’ve got sorted a while before you apply. When moving house, debts can sometimes mount up – but it’s important that you keep on top of them. Just one missed bill can have a negative effect on your credit report and, while there’s not a lot you can do if it’s already passed, but it’s one to watch out for. The same goes for making sure you don’t get an unauthorised overdraft, or anything else that might incur bank fees.
The benefits of payment protection insurance
Thanks to improvements in the marketplace, the benefits of payment protection insurance are becoming more obvious to many consumers. Payment protection insurance, or PPI, is an umbrella of insurance products that provide replacement for lost income for employees faced with involuntary redundancy, and sometimes accident and illness. The portfolio of protection plans includes three basic cover types. Income payment protection, mortgage payment protection, and loan payment protection are the three typical insurances that make up the PPI sector.
Though there are some subtle differences in design and intention, the benefits of payment protection insurance are similar. Providers have some difference in products but terms and conditions are fairly consistent. Most policies run for either 12 months or 24 months. Benefits typically begin either 30 days or 90 days after the insured event. Some plans offer backdated protection to the first day of claim.
The real benefit of payment protection insurance is the financial security it provides people when they are faced with unemployment. Many families are faced with budget restraints and rely on consistent monthly income to meet loan and bill obligations and to put food on the table. The maximum allowable protection under most plans is 1500 Pounds or half of your normal monthly income, though this can vary among providers. This may not sound like enough to keep you going without your monthly job income, but these benefit payments are non-taxed. This means the actual net pay is significant.
Payment protection insurance does not have to cost an arm and a leg. For years, many consumers were duped into believing that they had to buy PPI from large financial institutions. In fact, many borrowers either unknowingly, or based on pressure, purchased expensive payment cover from lenders at the point of receiving a loan. Some high street banks notoriously pressured borrowers into taking on the payment insurance as part of package with the loan product. Many even deceptively built the premium costs into the loan repayment in order to hide the true expense of the premiums.
Fortunately, today, the benefits of payment protection insurance are affordable. Following an investigation by the Office of Fair Trading (OFT) and one by the Financial Services Authority (FSA), fines were issued against some high street companies in 2007, and new resolutions have been put into place by the Competition Commission. For instance, loan payment and mortgage payment protection can now only be sold after a 7 day waiting period by lenders who want to sell to new borrowers. This restricts their ability to sell PPI through pressure tactics or deception.
Following the investigations, consumer awareness has dramatically increased. Now, more and more, people are learning that independent insurance brokers offer the best valued products that provide the benefits of payment protection insurance. Brokers sell plans that are 40 to 80 per cent less expensive than those available from financial institutions, depending on the product. These specialists also have a better service offering and maintain a better reputation for fair selling practices and support. Comparing PPI plans is efficient through a broker’s online website.
Top Money Saving Tips
There is one sure way to get ahead financially, one that has not changed over the centuries, it is: Make sure that your outgoings are less than your income. In other words, save money whenever you can! This is perhaps a little easier said than done however since most of us struggle to find places in our budgets from which we can trim a bit of fat. Yet when we stop to think about it savings are actually rather easy to achieve. The following are a few potential ‘savings areas’ that you should perhaps consider:
Clear your credit card every month: It is a golden rule of financial planning that you should get rid of your most expensive debts first. For most people this means the money that they owe on their credit cards. If you do use a credit card it would therefore be worth your while to make sure that you pay it off every month. If this is not possible right away you could consider moving your credit card debt into a loan that attracts a lower rate of interest (e.g. a standard bank loan) and then working hard to pay it off as soon as possible.
Switch your household bills to less expensive suppliers: Many people stay with energy and telecommunications suppliers for years without really considering that cheaper alternatives might be available. This despite the facts that the market for household utilities in the UK is extremely competitive and that switching suppliers could in many cases lead to substantial savings.
Always make a shopping list: Making unnecessary purchases is one of the reasons why many household budgets flounder. Protect yourself from this by always making a shopping list (even for non-grocery shopping) and then sticking to it. This will go some way towards protecting you from ‘impulse buys’.
Make smart shopping decisions: It is often the case that huge savings can be made on the weekly grocery spend by making a few smart shopping decisions. This could include buying some of your fruit and vegetables from a market stall and switching to ‘home brand’ products where available.
Get rid of your clutter: One man’s junk is another’s treasure! You may be sitting on some things that could be quite valuable to someone else. The rise of services like Ebay means that is has never been as easy as now to cash in on this fact.
Do not automatically renew your insurance cover with your current providers: It is very convenient to simply allow insurance policies to ‘run and run’. This does not mean however that it is necessarily the best thing to do from a cost saving point of few. It would be far better to get new quotes from a variety of providers every time that a policy becomes due. This applies to all kinds of insurance including vehicle insurance, home insurance and annual travel insurance.
Think before taking out ‘value added’ products: You will often be offered ‘value added’ products like ‘Payment Protection Insurance’ and extended warranties. It could be that they will indeed ‘add value’ to your purchase/transaction under certain circumstances. It would however be a good idea to ‘crunch the numbers’ to determine whether this is indeed the case before taking it up. In far too many cases the ‘added value’ applies to the vendor and not to you!
Summary:
- The fastest way to financial stability is to make sure that your income always outstrips your outgoings.
- Clearing credit card debts can result in significant savings
- Smart shoppers always make lists and shop around
- Your financial decisions should be determined by thorough research and not merely by ‘business as usual’
Tips for saving money in a recession
All of us need to tighten our belts in a recession, but sometimes it’s difficult to make crucial spending decisions.
Here’s a list of some sensible tips for saving cash without making your life too austere:
1. Stop spending – keep your cash together and set yourself a ‘cooling off’ period before you spend on that bargain in the sales. Consider whether you really do need more shoes or that computer game.
2. Check out the comparison sites on the web for insurance, utilities and credit card rates. Make sure you are not paying over the odds and switch to a cheaper product if you can.
3. Check out your bank statement and look at all the outgoing expenses – cancel what you can. Most have us are paying a few pounds every month for a service we don’t really use, like gym membership when we could take up more running or walking.
4. Declutter – all those old clothes and unwanted gifts that are taking up space in loft, cupboards and under the bed can be cleaned up, photographed and auctioned off on websites like eBay. Or do a boot fair.
5. Look at your shopping bill. If you are mostly buying ready meals or living off takeaways, cut them out and start buying the ingredients and cooking your own meals. Maybe having your main meal at the canteen at work and a sandwich when you come home could work out cheaper.
6. If you do eat your main meal at home, then take a packed lunch to work instead of buying food.
7. Look at life’s luxuries – your mobile phone and Sky TV – do you really need a prepaid plan with all those texts and minutes? And how much TV do you actually watch to justify extra money on all those packages?
8. Cut your coat according to your cloth - put your credit cards safely in a drawer and live off your income rather than borrowing.
9. Change your brands – switch essentials like cleaning products, tissues and cooking basics to cheaper supermarket own brands rather than pay extra for a ‘brand’ name.
10. Buy a bread maker and a slow cooker in the sales. They are both relatively cheap kitchen appliances. A bread maker will soon pay for itself and keep you with a constant supply of crusty, homemade loaves while you can set a slow cooker before you go to work and come home to a piping hot meal.
11. If you have children and live within walking distance of the school, then keep the car on the drive and give you and family a breath of fresh air and some exercise.
12. If you have a spare bedroom and are struggling with the mortgage and bills, consider letting a room. Currently, you can charge a total of £4,250 a year to a lodger without paying any tax – that’s an extra £82 a week in your pocket.
If you are unlucky enough to have lost your job, taking in a lodger won’t affect any benefits you are claiming.
13. Put a little bit of money aside every week for a family treat, even if it’s something simple like renting a DVD and buying some sweets. Times might be tough but you need something to look forward to as well.
Summary
- Stop spending and review your financial circumstances by listing all your income and outgoings and considering what, if anything, you can cut.
- Declutter and be ruthless with your stuff and see what you can sell to on eBay
- Save money with cheaper brands, more home cooking and walking rather than driving where you can
- Don’t take things too far – save a few pounds a week for a treat and something to look forward to