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Essential Tips To Help You Keep Car Insurance Costs Low

6 minute read

By Lesley Harrison

Car insurance is a legal requirement in the United Kingdom. All motorists are required to have at least third-party insurance on their vehicles. Recent changes to the rules surrounding car insurance renewals mean insurance companies aren’t allowed to charge existing customers more than new customers for their policies. As a result, people who switch every year may notice the quotes they get aren’t as attractive as they used to be. Fortunately, it’s still possible to keep car insurance costs to a minimum if you’re willing to shop around.

To help you get a more attractive deal, here are some valuable tips for saving on car insurance.

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Don’t Pay Monthly Premiums

Many people opt to pay their insurance premiums in monthly installments. While this payment method may seem convenient, it causes you to spend more money in the long run. When you pay monthly, you’re effectively taking out a loan for 80% of the premium. Insurance providers charge interest on that loan, and the APR they offer is based on your credit history.

Paying yearly as opposed to monthly benefits you and your insurance provider. Because the insurance company doesn’t have to manually process the payments every month, it doesn’t spend as much money. Therefore, these same savings are passed on to you.

Yet another benefit to paying for your car insurance annually is that you don’t have to worry about forgetting to take care of the bill each month. As you may know, failing to pay can lead to your policy being canceled. You’re likely to be slapped with a costly penalty for driving while uninsured.

Purchase Other Insurance Policies From the Same Provider

If you have home insurance, strongly consider getting your car insurance policy from the same provider. By bundling these insurance policies, you may end up getting a significant discount. To determine your potential savings, ask for a quote in advance.

Most consumers are able to drastically lower their insurance premiums by bundling. Furthermore, you have far less paperwork to deal with. Drivers who own more than one vehicle are also encouraged to use the same insurance company to cover all their vehicles.

Try Different Job Titles

One of the things insurance providers use to assess your risk profile is your job. Sometimes, tweaking your job title can result in significant savings. It’s important to be truthful about your job role. If you’re caught lying, this can invalidate your policy.

However, you may be able to save money on your premium by trying different words to describe the same job. For example, if you normally describe yourself as “Call Centre Staff” when taking out an insurance policy, but “Customer Advisor” also accurately describes what you do, try both and see which offers the cheapest quotes.

Fit a Dashcam

Many insurance providers offer discounts for motorists who have a dashcam fitted in their vehicles. To qualify, you may need to use a dashcam from an approved supplier. These cameras can be useful for proving who was at fault in the event of a collision. In addition, insurance companies often take the stance that a person who’s willing to have a dashcam fitted is likely a more responsible driver than someone who doesn’t have one.

Try Different Policy Start Dates

Start the process of shopping around for insurance as early as possible so that you’ve got at least three weeks of leeway before you need the cover. Most insurance companies allow people to get a quote for a policy 30 days in advance, and the earlier you quote, the more affordable the quote is likely to be.

Procrastinating about renewing your insurance can cost hundreds of pounds. Premiums increase dramatically if you’re trying to get short-notice cover, and next-day cover can cost almost double the amount of an identical policy set to start 21 days later.

Consider a Black Box

Black box policies are popular with younger motorists, but they can be beneficial for almost all drivers. These policies involve having a tracking device fitted to your car. The device tracks speed, acceleration and deceleration and also the time of day that you drive and the mileage.

Responsible drivers see their premiums reduce over time, while drivers with a speeding habit or who regularly drive late at night may see their premiums increase dramatically. Be aware that drivers living in rural areas sometimes report issues with black boxes not tracking their driving habits accurately.

Take Pass Plus or IAM Courses

Pass Plus and the Institute of Advanced Motorists certification are two advanced driving courses that are recognized by many insurers. Pass Plus typically costs £200, although some local councils offer discounts as part of an initiative to promote responsible driving.

New drivers, in particular, may benefit from taking one of these advanced driving courses. Drivers who already have several years of experience may not notice a significant drop in their premiums after completing a course, but over a few years, even a small discount can mean the course pays for itself.

Consider a Mileage-Based Policy

If you don’t do a lot of driving, you may be over-paying by having a standard policy. Motorists who drive less than 5,000 miles per year may find they save money by switching to a pay-per-mile insurance policy. Insurance companies take into account a person’s average mileage as well as the things they use their car for (commuting, business use, social use or a mixture of all three) when assessing risk. With traditional policies, lower mileage drivers may end up subsidizing those who drive longer distances.

No Claims Discounts

If you’re switching insurance companies, make sure you provide your previous policy details as a part of the switch so that any no-claims discount transfers over. Note that in most cases, you can only apply a no-claims discount to one car at a time, so if you buy a second car, you need to start building a discount on that car. However, having named driver experience or a long, accident-free driving history still counts in your favor when it comes to calculating insurance premiums.

If you’ve had a brief break in your driving history, ask if the insurance company is still willing to count your old no-claims discount. In many cases, a one or two-year break may reduce your no-claims bonus by a year or two but doesn’t necessarily reset it to zero.

Higher Deductibles

A deductible is the amount of money you pay before your insurance coverage starts to kick in. For example, you may be required to pay £500 before the provider covers the expense of repairing damage from a crash.

If you consider yourself to be a cautious driver, think about increasing your deductible. Expect your insurance rates to be noticeably lower. Make sure you keep the amount of the deductible set aside in a savings account, so you can use it for small repairs in an emergency.

Anti-Theft Devices

Discounts are often given to drivers who have installed anti-theft devices on their vehicles. Alarms and tracking devices make a vehicle far less likely to get stolen. Remember, the goal of the insurance company is to limit the number of claims made by customers.

Advanced safety technologies, such as blind-spot monitoring and automatic emergency braking, can also help keep your cost of insurance low. Parking your car on a driveway or in a garage usually reduces your premium when compared to parking on the street outside your home.

Compare and Shop

Although car insurance is a legal requirement, it doesn’t have to become a financial burden. You can lower your insurance rates by practicing safe driving habits, renewing your policy early and taking advantage of the available discounts. Use price comparison sites to find the best deal on your car insurance.

Always be truthful about your mileage, job title and where you park your car. Remember that insurance providers can and do cancel policies if they catch people withholding information or lying to get a better rate.

Lesley Harrison