Top ten tips for cheaper car insurance
Wednesday, 21 January 2009 10:59
The start of a new year is traditionally associated with resolutions, and given most people are resigned to a recession in 2009, cutting down on costs is up there with getting some exercise and eating more greens.
Sarah Routledge looks at ways of cutting your car insurance bills.
Car insurance is compulsory for motorists in the UK, and given the risks, can be expensive. Yet fierce competition within the market and an abundance of comparison websites has kept prices down, and there are a number of ways drivers can (legitimately) shave pounds from their policies.
There are several ways in which drivers can significantly reduce their premiums - here are some top tips to help.
- Shop around
Competition for car insurance is strong and in a crowded market there are bargains to be had by shopping around. Comparison websites are a good start, although it is recommended you use more than one to get the best coverage of the market.
Asia Manzoor, spokesperson for esure car insurance, says: "Car insurance is a very competitive market so you can always weigh the odds of getting a lower premium in your favour.
"A safe driver with a safe car kept in a safe place are the bedrocks of a great premium but you should always make it your business to check out different companies to benchmark your current premium.
"Inertia will never get you a better deal."
In addition, always remember the cheapest deal is not always the best value for money - you may end up paying hundreds in excess in the event of a claim, or find useful extras like use of a hire car are excluded.
- Check your entitlement
Your workplace, union or car club might have negotiated a discount on insurance for you, so check to see if you are entitled. It is also worth asking your existing insurer for a discount if you are thinking of changing for a cheaper rate as they will probably be keen to keep you.
Taking several policies out with the same insurer often also entitles you to a discount.
- Add another driver
"You can put named drivers on your policy," suggests Ian Crowder, spokesperson for AA Insurance.
"This is likely to work if you are a man and you put your wife on as a named driver - it could work out more expensive the other way around - or if you are a youngster and you put a parent on."
This is not the same as fronting, Mr Crowder says, a type of insurance fraud where the main driver is given as another person and the real driver added as a named driver to bring down premiums.
Remember other drivers can also raise your premiums, so if you have added a younger driver to your policy who does not use the car regularly, consider taking the name off again - you can always insure someone for a few days.
- Improve security
Better security can also help bring down your premiums.
"If you have a garage, why not clean it out and actually use it to keep your car in? This will reduce premiums," says Norwich Union spokesperson Adam Cracknell.
Anything you do that will make your car more secure or less tempting to thieves will help bring your premiums down, so make sure you tell your insurer if you fit a burglar alarm or a wheel lock.
However, this will also work the other way around too. Anything that makes your car more valuable to thieves, such as an expensive stereo system or fitting alloy wheels may also affect your premiums.
It is important to let your insurer know if you are planning to modify your car, as failing to may invalidate your policy.
- Increase your excess
Increasing the amount of voluntary excess you are prepared to pay on your car in the event of a claim will reduce your premiums every month. This is particularly true for younger drivers, who often struggle to afford insurance.
"You should never have an excess that you couldn't afford to pay tomorrow, but if you can add £50 to a voluntary excess it will reduce your premium," Ms Manzoor says.
- Pay in one go
Insurers often give the option to pay for their policies in monthly instalments rather than on one lump sum. Given that car insurance can be costly, for some the option to pay throughout the year seems the most sensible.
However, this is not a free payment method and your insurer will most likely charge a high rate of interest. If you cannot pay all at once, it may work out cheaper to use a low or 0% interest credit card, which you can then use to spread out the payments.
- Drive less
If you have just retired, you should let your insurer know as this may mean less mileage and therefore cheaper premiums. You should also make sure you are no longer insured to use your car for business purposes, if this was the case. Similarly, if you no longer drive to work, or your drive has shortened, your annual mileage will have changed.
"Check your mileage every year on your MOT certificate, you may be insuring your car to drive many more thousands of miles a year than you actual need to," says Norwich Union spokesperson Adam Cracknell.
Mr Cracknell adds: "Have your personal circumstances changed? Do you now cycle to work? Or are you now retired? If so, you won't need to cover your car for the commute into work which will save you some money."
- Buy a cheaper car
This may seem obvious, but check what insurance group your car belongs to - preferably before you buy it.
Most insurance companies use the Association of British Insurers (ABI) group rating.
"If you drive a sports car, expect high premiums, especially if you are male and under 30," says James Harrison, chief executive of online insurance comparison site Insurancewide.com.
"Insurers take numerous factors into account including your age and vehicle 'group rating' when determining your premium.
"The different groups available range from group one (the lowest) and group 20 (the highest). Most family cars, VW Passat, Audi A4, Vauxhall Vectra, Ford Mondeo, fall in to group six to 12, unless they have high powered engines."
- Take a course
For drivers who have just passed their test, the AA recommends taking extra lessons as part of the Pass Plus scheme. Not only will this help to reduce your premiums by up to 30 per cent, it is often possible to apply to your local authority for a grant to pay for the lessons.
Drivers who have been on the road for a bit longer - usually with at least 12 months' experience - could train for their advanced driver's test. This could help you avoid accidents and bring down your premiums.
According to the Royal Society for the Prevention of Accidents (RoSPA), there are over 50 local groups that will provide free training to help you improve your driving skills and help you train to become an advanced driver.
- Profession
Another way of saving money is to experiment with your job description.
Your job can have a significant effect on your insurance premiums, according to Mr Crowder.
"If you are a professional footballer you will pay a fortune for your insurance," Mr Crowder says.
"It's not just the fast cars they drive, but the fact that if they were injured in a crash they could sue the insurance company for a loss of earnings, which in a footballer's case could run into millions."
Some professions are subject to higher premiums because of their perceived behaviour, or because they are more likely to be driving at dangerous times. This means it could pay to try a few different variations on your job.
"You can compare different professions, so compare journalist with writer, or solicitor with writer, for example. As long as it is a legitimate description of your job this is alright," says Mr Crowder.
However, an outright lie to your insurer over any aspect of your policy could land you with a big bill if your insurance is cancelled as a result, Mr Crowder warns.
Sarah Routledge
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