Tracking down cheaper car insurance

Car insurance is an expensive necessity as every driver must have at least third party cover.

Driving without insurance is a serious offence that often results in a driving ban, points on your licence and a fine.

Car insurance companies include lots of factors in calculating your insurance premium, like age, gender, where you live and the type of car you drive.

Some of these are beyond your control to change to try and keep your premiums down – but others are, so here’s a list of tips that may help you save money on your car insurance.

• Drive more carefully – do everything you can to keep your no claims bonus intact and this gives you a hefty discount each year
• Park your car off the road, in a locked garage if you can.
• Fit an alarm, immobiliser and a tracking device if you can – any insurance approved anti-theft device will knock money off your premium
• Try and reduce your mileage and night driving – people who drive between 7am and 11pm and average less than 10,000 miles a year often pay a lot less than drivers who use their car more
• Don’t add too many named drivers – everyone bumps up your policy
• If you can afford a higher excess, then pay the extra because this will cut the cost of your premium as well
• Shop online – use more than one comparison site because not all insurers are on all the sites and some are not on any. Generally, buying your car insurance online might save you up to 10% on what you would pay through a broker.
• If you’re a married man see if there’s a difference in cost between your wife taking out a policy with you as a named driver rather than the other way round. Many insurance companies give cheaper premiums to women drivers.
• Look for an extra bonus, like discounted breakdown cover, that reduces the costs
• If you belong to a special member club for a particular type of car, the club may have a special deal with a broker or insurance company that will save you cash.
• If you’re a woman driver or aged 50 or over, look for a special insurance deal as you are a lower risk than most drivers.
• Don’t pay your insurance in instalments – it will cost you more. Instead, consider paying your premium on a 0% interest credit card and paying the premium off over your interest free period.

For example, if your annual insurance premium is £360 and you pay with a 0% interest credit card that gives you a six-month interest free period, pay £60 a month off your card instead of paying interest to the insurance company.

Summary

• Try and reduce your premium by reducing your risk – fit anti-theft devices to your car and try and park off the road in a garage
• Shop online for a discount – but make sure you go to more than one comparison site because not all insurance companies are represented on all comparison sites
• See if you can qualify for a discount deal through a special insurance provider if you can
• Pay a higher excess and reduce your premium

Getting cheap car insurance

The law says that you have to insure your car, but that doesn’t mean that you should a pay a fortune for it. There are a few things that can help you get cheap car insurance, and we’ve pulled them together for you in this article.

• Shop around. Get quotes from different places, and compare the features as well as the price of each provider. The easiest way to get a lot of quotes quickly is to use one of the online insurance comparison websites. Some providers will let you remove things you might not need, such as European breakdown cover or a hire car, to make the policy a little bit cheaper.
• Garage your car overnight. Parking your car in a garage can get you a decent discount off the full premium.
• Secure your car. Consider buying a Thatcham approved security device, such as a steering wheel cover or immobiliser, as this can often get you another discount. Even if your car is secure in garage when at home, it makes sense to be sure that your car is secure when parked up while you are at work or out shopping.
• Don’t automatically renew. A lot people make the mistake of assuming that their current provider will automatically be the cheapest when it comes to renewal. That isn’t always the case, especially as many providers offer additional discounts to brand new customers.
• Look out for promotions. Many providers offer incentives to take out a policy with them, such as free legal or breakdown cover. Some even offer cashback, and when you take the cashback amount or the cost of your normal breakdown cover off the price of the premium you might well find that it works out cheaper overall.
• Haggle. Don’t be afraid of making providers work to get your business. If you’ve had a cheaper quote from someone else, ask them if they can beat it.
• Check your mileage. If you don’t drive a lot of miles every year, then ask if you can have a low mileage policy. Insurance companies may see you as being a lower risk, but if you don’t tell them they’ll make assumptions and charge you accordingly.
• Speak to insurance specialists. If you aren’t a ‘typical’ driver, there are providers who specialise in certain areas and can often give you a better deal. If you are under than 21 or over 50 for example, or drive a 4×4 or a classic car, there will be a provider wanting your business and offering cheaper policies to get it. Search the internet or look at the adverts in motoring magazines to find them.

How much is car insurance?

Car insurance premiums vary from driver to driver and insurance provider to insurance provider. This is due to a number of factors used by the insurance company to create a risk profile. This risk profile is then used to determine what it will cost to have you insured.

While this sounds like it is dictated to you, you are able to have some influence over how your car insurance premiums are calculated by understanding the various factors used.

These factors include:

• Age, gender and driving history;
• Car value;
• Your location;
• Security devices fitted…and more

By using some of these factors you are able to reduce your insurance costs.

Decide how to buy insurance can reduce costs

There is also another factor that can influence how much your car insurance will cost. You can reduce your insurance costs by shopping around and getting multiple quotes before making a purchase. As mentioned above, different insurers will apply a different risk to you and therefore some insurance companies will insure for less than others.
Buying online also usually means a discount typically of up to 10% dependent on the provider. This reduction is passed onto you, as web customers cost less to service.

Always shop around when you receive your renewal notice. Determining factors and costs change, meaning that spending a short amount of time on a price comparison site could help you to make savings.

Summary

• Car insurance costs are made up of a number of variables;
• Some variables you can influence, others you can’t;
• Deciding on how to buy your insurance can provide a saving;
• Always shop around and don’t automatically accept your renewal as being the cheapest option.

Car Insurance Comparisons

If your car insurance is coming up for renewal, it’s very tempting to put it off and just let it roll over. After all, you did all of this last year, right? How much price fluctuation could there really be in just twelve months? If you had the best offer back then, surely it’s still the best offer now?

Well, no… far from it, in fact. Whenever you’re looking to renew your insurance, the first thing you should be doing is scouting around the various providers, trying to find the best deal for you. The financial climate is never what you’d call particularly stable, and many insurance companies rely on people being too lazy to examine the alternatives before they sign on the dotted line. Add this to the fact that any introductory offers you received in the first year of your insurance policy generally won’t last into your second and you might find yourself paying much more than you have to.

Help is at hand, though, and it’s all thanks to the internet. There are literally dozens of companies springing up online dedicated to helping you find the lowest possible quote for your car insurance. These comparison sites work by taking certain details from you (age, gender, make of car, location, etc.) and seeing what the various providers would charge you for your insurance. By doing this for every provider on its books – often an absolutely staggering number – it can find you the best possible policy for you, all with just a few clicks of the mouse and taps of the keyboard.

Additionally, you can be sure that if you’re comparing quotes online, the information you get is going to be absolutely up to the minute, ensuring that you don’t end up getting yourself settled on an offer that has expired, or rapidly increased in price. In the long run, this can make things a lot easier; you don’t have to deal with the extra frustration of having the rug pulled out from under you just when you think you’ve got everything sorted.

Price comparison sites are a good way to check out the shape of the current marketplace before you sign your name to anything. Although it may seem a bit intimidating to be assailed by such a great deal of data in such a short space of time, they’re designed to be as easy as possible to use – they have to be, as there are too many alternatives out there for you to choose from. If the first one you try is confusing, or you don’t think it offers you enough choice in insurers, don’t be afraid to look for a second opinion. As with anything, the point is to make the process work for you as easily and straightforwardly as possible; if it doesn’t, then getting your car insurance is going to become a needlessly complicated chore. If that happens, you may end up getting bored and settling for the first package that looks OK – precisely what you were trying to avoid by using the services of a comparison site in the first place.

Does my address affect my car insurance?

We all know where we live, but few of us know our risk address for car insurance – and that’s the key to how much we pay for our cover.

So what is our risk address?

To your insurance company it’s the place where your car is parked during the night for the bulk of the duration of your car insurance policy.

The insurer factors in the crime risk for that postcode area to set your annual insurance premium. The rule of thumb is the more crime in the area, the more expensive your car insurance will cost.

If you live at home with your family in a rather well to do area with a postcode and crime level to match, that relatively crime-free leafy suburb probably reduces the cost of your car insurance.

Then you start seeing someone who lives in a little more downmarket area, and you start spending a lot of time at his or her place, then your risk address changes.

You should call your insurer and tell them that your home address is still the same, but your car is parked overnight at the new address for typically ‘x’ amount of nights a week.

Then standby for a shock – because you may see an increase in your car insurance because of where he or she lives.

What happens if you don’t tell the insurer about your new risk address?

This can be fraught with problems, because if you read your policy small print, you’ll probably find this is one of those important details you are obliged to report.

It’s a strange world where your mum and dad don’t mind where you are, but your insurance company is upset if you don’t tell them.

The end result is if your car is vandalised, stolen or broken in to while parked at your boy/girlfriend’s, then your insurance company could invalidate your policy and refuse to pay out because you have broken the terms and conditions of cover.

Can the car registration documents list one name and address while the insurance show another person’s name and address?

The answer is, it doesn’t matter as long as the insurance company knows the risk address – and because the risk address is one of the factors that sets the policy premium, you can tell the insurance company what you like about where you live - as long as it is the truth of course!

Besides the ‘downmarket’ boy/girlfriend warning – no personal offence meant, of course – night workers should also consider what they tell their insurance company about their risk address.

If you work permanent nights and drive and park your car at work, then technically, this is your risk address and you should tell your insurer to make sure your policy is not invalidated if something happens to your car while parked at work and you need to make a claim.

Is car insurance for a woman cheaper?

In the UK, women’s car insurance is marketed as a separate product. There are several niche insurers who cater for women drivers. Mainly, this is due to the understanding that women should be treated differently to men when it comes to insurance.

Figures produced by Governmental departments show that:

• 98% of dangerous driving convictions are men;
• over 90% of convicted driving offences are men;

On top of this, research has shown that women tend to drive slower than men and also do not cover as much mileage annually. Taking this into consideration when calculating an insurance premium, means that women are seen a lower risk and therefore an insurance company charges less for car insurance for a woman.

Different age groups
The statistics shows that younger women drivers, those under 45, will tend to receive the reduced premiums. Over the age of 45, the figures for accidents are more balanced that therefore reflect on the cost of insurance.

The future
The figures also show that the gap is closing between men and women but there is a long way to go. It should be said that it is the risk profile of a woman and their proven driving abilities by having less accidents and convictions than means they get more competitive premiums than a man of a similar age driving a similar car, but if that profile changes then insurance prices will go up.

The Risks Associated with Driving an Uninsured Vehicle

There are a staggering number of motorists who drive without car insurance which is frightening when you consider the risks as well as the fact that driving without cover is a serious offence.
The reasons that uninsured drivers give for not taking out insurance are varied and typically include the following.

• Cost: Many people claim that they simply cannot afford to take out insurance
• Forgetfulness: A large proportion of uninsured drivers simply forget to renew their cover
• Time Constraints: Some uninsured drivers claim that they do not have the time to arrange insurance
• Ignorance: Some people are unaware of the legal requirement to take out insurance
• Wilful Lawbreaking: It is sadly the case that a significant proportion of those driving without insurance simply do not consider insurance necessary

Whatever the reasons people give for not taking our insurance, it is never worth it. Some of the possible results of taking this course of action include the following:

• License penalties: If you are caught driving an uninsured vehicle it could least to 6-8 penalty points being added to your license. Considering that you need only 12 points for your license to be suspended, driving without a license can be a significant step towards getting you ‘off the road’.
• Risk of a fine: Uninsured drivers are routinely fined for what is considered to be a serious driving offence. Fines range from £500 – £1000.
• Exposure to serious liability: If you are uninsured against third party liability you are leaving yourself open to cost recovery attempts by other drivers or their insurers if you are ever involved in an accident.
• Risk of vehicle seizure: In some cases the police may decide to seize your vehicle until you can prove that you have arranged the required insurance. The costs associated with this, coupled with the inconvenience, can be very significant. You will be liable for all transport, administration and storage costs.
• Significantly increased premiums in future: If you have been caught driving without insurance, insurers will henceforth regard you as a very high risk customer. This means that your insurance premiums will rise significantly for at least 3 -5 years. This obviously leads to the ironic situation where an attempt at ‘cost saving’ can eventually lead to much higher costs.
• Risk of a custodial sentence for repeat offenders: It is not unheard of for people who repeatedly flout the law by driving without insurance to be criminally prosecuted and sent to prison.
• Negative impact on others: Uninsured drivers cause insurance premiums for the rest of the driving population to rise by as much as £50 per person. This means that those not paying their way are actually placing a huge financial burden on the rest of society.

It should be very clear from the above that, whatever the perceived, ‘advantages’, it is never a good idea to even consider not being covered by insurance when you take to the road. The perceived ‘saving’ or avoidance of hassle pales in comparison when you consider the extremely negative impact that this choice can have on your life.

Saving on Car Insurance

Vehicle Insurance is obviously not an ‘optional extra’. Apart from the fact that you will be exposing yourself to huge liability claims if you drive without insurance it is also illegal to drive anywhere on a public road in the UK without your vehicle being properly insured. Since you cannot avoid having to pay for insurance it would make a lot of sense to do everything in your power to make sure that your premiums are as low as possible.

The worst way to achieve insurance savings is to ‘underinsure’ your vehicle by taking out inadequate cover. Another common ‘saving’ that can turn out to be very costly is to accept a ‘lowball’ quote from an obscure company that might not be able to honour the insurance contract that they have with you. The best ways to save, on the other hand, all have to do with doing a bit of homework to ensure that you are assessed as ‘low risk’ by insurance companies. This will of course translate into significant savings on premiums.

Before we look at specific examples of how you can improve your risk profile, it is worth mentioning that you should always ‘shop around’ a bit before accepting an insurance quote. This may seem like a lot of hard work, but there are currently many services around that will submit your profile to a large number of insurers in exchange for a ‘finder’s fee’ (paid by the insurer, not you). Making use of such a service can be a very effective way of slashing your insurance costs.

There are some aspects of premium pricing that will be very difficult to change, short of growing older and changing your car! This is because younger drivers face higher premiums as do very powerful ‘supercars’. The story does not end there however. There are several kinds of discounts available to those who are perceived to be lower risk drivers. Be sure to mention the following when you apply for a quote:

• The length of your ‘no claims bonus’ – If you did not make a claim in the recent past insurers will automatically place you in a lower risk category.
• The ways in which you will use your car – ‘Social use’ (i.e. not using the car to drive to work) will normally lead to lower premiums.
• Membership of professional organisations – Some insurers will offer you a discount if you are a member of a respected professional organisation.
• Your age – Some insurers will lower their premiums once a driver reach age 55, only to raise it again when he/she reach an advanced age. You should therefore be sure to make the best of your ‘golden premium years’!
• Safety features – The installation of advanced safety features could lead to lower premiums.

Some other ways to lower your insurance costs are the following:

• Apply for combined cover. Insuring more than one vehicle with an insurance company could lead to lower average premiums on both (or all) of the insured vehicles.
• Elect to pay a higher excess. If you offer to pay a higher level of excess in case of a claim it means that you assume more risk yourself, leading to a lower monthly premium.
• Choose the right level of cover. For a new vehicle it makes perfect sense to take out comprehensive insurance as replacement costs will be very high. If you drive an older car it might be worth it to just take out insurance for ‘Third Party, Fire and Theft’.

Summary:

• It is illegal to drive without insurance in the UK. Insurance premiums are therefore an unavoidable expense.
• It pays to ‘shop around’ for the best insurance quote.
• If you can somehow prove that you are a ‘low risk’ customer your premiums will be lowered.
• Some other ways in which savings can be made are applying for combined cover and electing to pay a higher excess.

How much do you pay for car insurance?

Far too much is the quick answer – mainly because most people are just too lazy to put in some legwork to save themselves some money.

The main culprits are those people who simply renew their policy with the same insurer year after year without checking around to see if there is a better deal.

You can compare motor insurance premiums as well as policy features and benefits easily by using our service.

You will find out what you can pay rather than what you are being charged because car insurance is a competitive market and insurers are falling over themselves to get your business.

So how do car insurers work out their premiums?

Basically, underwriting a motor insurance policy is a risk assessment. The insurer takes three main factors in to account:

1. Your claims history as a driver
2. The type of car you drive and the car’s value
3. The risk address – this is the place where the car is parked overnight and not necessarily your home

The insurer’s aim is to charge enough in premiums from their pool of customers so they can pay out for any claims made by drivers they insure – and don’t forget you are also shelling out for their administration costs, plush offices and profits as well.

If you are a youngster with a poor claims history driving a sports car and living in an area with a high crime rate, your risk is high, so your premium will reflect this.

If you are middle-aged with a maximum no claims discount, drive a standard family car and live in a low crime country area, your premium will be much reduced compared with our other driver.

You can reduce the cost of your car insurance in several ways:

• By taking out lesser cover that is cheaper – like third party fire and theft rather than fully comprehensive insurance or paying for a couple of week’s cover on a friend or relative’s car instead of adding a courtesy car in to your policy
• By paying a voluntary excess that reduces the insurers risk and allows the premium to be adjusted downwards
• By comparing products and premiums with a price comparison service
• By changing your car to a less powerful and less expensive model
• By upping the security on your car by adding an alarm, immobiliser or a GPS unit so the car can be tracked if stolen
• By reducing your annual mileage – the fewer miles you travel the less you present yourself as a risk to the insurer.

In the long-term, just paying more attention and becoming a safer driver who makes no claims will earn you a big no claims discount that will considerably reduce your insurance costs.

So if you think you are paying too much for car insurance, don’t just send that renewal form back next time – take some action to bring the costs down because if you don’t help yourself, no one else will.

How Much Is Car Insurance?

The answer’s simple – as expensive as you want to make it because you are the one of the key factors in deciding the cost of the premium for the insurance company.

Your attitude towards your car

If you have modest means but need to put a car on the road, you probably look for a bargain and insure the car for third party only, the cheapest form of insurance.

This is because you know the car is worth nothing and if you have an accident or it’s stolen, you are better off putting your cash in to a replacement rather than sending good money after bad.

Basic insurance cover keeps you legal and means you can tax and MoT the car, and as long as you can get from A to B for the least cash possible, that’s fine with you.

Other drivers with shiny, expensive cars like to keep their vehicles in pristine condition and have no intention of scrapping them if they have an accident because the cost of repairs is far outweighed by the value of the car.

These drivers tend to go for comprehensive cover with lots of bells and whistles, because they don’t want any hassle if they have an accident, they just want the insurance company to send them a courtesy car and send their car back when it’s repaired.

The way you drive your car

If you have lots of penalty points on your licence and a long claims history with car insurance companies, your car insurance premium is going to be loaded because the insurer perceives you as more of a risk than a more careful driver with a maximum no claims discount and no penalty points.

How you shop for insurance

Another reason why drivers tend to pay too much for their insurance is complacency when renewal time comes round every year.

Too many accept the quote from their existing insurer without investigating whether they can find a better deal elsewhere, like an insurance comparison site like ours.

All you need to do is key in a few basic details about yourself, your car and your driving history and we’ll come up with some car insurance options for you to compare – including the policy features and benefits.
Insurance companies are in a competitive market and some may offer incentives to switch to their company.

You don’t have to be what you drive

You don’t have to accept what a car insurance company puts in front of you. You can bite back by changing your attitude towards insurance and not just sit back and take what’s offered.
Look at ways to reduce your insurance costs.

Question the add-ons on your policy

Do you really need a courtesy car – would it be cheaper to pay an extra premium on a relative’s car for a couple of weeks?

What about a voluntary excess? This reduces the insurer’s risk and drives the cost of your policy down.

All these little savings add up in to a reasonable slice off your insurance.

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