Cheaper car insurance: how to cut costs

Drivers can’t do anything about lowering the cost of fuel, but they can drive more economically to save money. And so it is with car insurance: by law, we must all be insured, but there are proactive steps drivers can take to reduce the cost of cover significantly. That is good news, because insuring the car is estimated to make up around 15 per cent of an average driver’s yearly running costs, according to CAP Automotive, the vehicle valuation experts. Here are a dozen top tips to follow which can help reduce your insurance premium.

Limit your mileage

The fewer miles drivers travel in a year, the less of a risk they are considered to be. That’s why many insurers will issue a lower premium to drivers travelling fewer miles. If you don’t keep a record, an easy way to know how many miles you drive each year is to check your MOT certificates or the vehicle’s service history book.

Lock it away

As cars have become harder to steal, so criminals have evolved, thieving valuable mechanical parts such as wheels and tyres or exhaust systems instead. Malcolm Tarling from the Association of British Insurers (ABI) says: “Theft from a vehicle is still a problem and my neighbour recently had the catalytic converter stolen from his car when it was parked on his drive.” Garaging a car can cut premiums by between five and 10 per cent.

Pay once

You have a choice how you pay for insurance: annually or monthly. Most insurers charge extra for paying in monthly instalments so paying in a lump sum generally makes cover cheaper.

Bump up your excess

Increasing your excess – the first few hundred pounds of any claim that must be paid by the driver – will lower your premium. The assumption on the insurer’s part is that the higher the excess, the more caution a driver will exercise on the road: no one likes to spend their own money should an accident happen.

Fewer named drivers on a policy

The more people listed on the policy document, the more expensive a premium will be. Parents wanting to cover their children who will only be driving the car during college holidays should think about temporary rather than annual cover. But, adding a husband or wife to a policy will cut the cost: insurers think drivers take more care when their spouse is also on the policy.

Choose a low premium car

If you can’t bear to be torn from your pride and joy, then look away now. The larger, faster and flasher your car is, the more likely it is to be driven quickly, attract thieves and be a magnet for vandals. It’ll also be more expensive to repair. The smaller, cheaper and more anonymous your car is, the cheaper it is likely to be to repair and the less likely it is to appeal to undesirables. Before buying a car, check which insurance group that model is in, or call your insurance company for a quote: it will help avoid any nasty surprises.

Be a careful driver

There is no substitute for careful driving when it comes to insurance. The fewer claims you’ve had, the cheaper you’ll be to cover. A driver with speeding convictions and a lengthy list of previous claims is likely to be viewed as a higher risk and therefore more expensive to cover.

Don’t modify your car

Insurers tend not to like modifications being made to cars, for the simple reason that they can’t predict whether it could adversely affect the vehicle performance or the owner’s driving habits. They definitely don’t like computer chips that boost engine power and body kits designed to make a car look like a prop from The Fast and the Furious films. And if you are tempted to modify your motor, always tell your insurer as not doing so can invalidate cover.

Shop around

There tend not to be rewards for loyalty in the world of insurance so automatic renewals can penalise car owners. Just because your current insurer gave you the best deal 12 months ago doesn’t mean they’ll do the same in subsequent years.

Think about your profession

There are many ways to skin a cat, so consider how an insurer might perceive your profession. Say you’re a journalist and you could be stereotyped as a hard-living paparazzi, giving high-earning and litigious stars lifts and leaving your car in inner city badlands while you stalk celebrities. The ABI’s Malcolm Tarling advises: “For an unusual occupation it pays to find an insurer who asks the right questions and understands your profession. The higher the premium, the less an insurer wants to cover you because you represent a greater risk.”

Take some driver training

If you pass an advanced driving test, it won’t automatically follow that budget brand insurers will slash their premiums for you. However, some higher quality insurers will take your extra skills into account and offer cheaper cover.

Think about multi-car cover

Some insurers give reduced price premiums when you cover more than one car with them. However, it doesn’t automatically suit all drivers. Malcolm Tarling from the Association of British Insurers explains: “It all depends on your profile. What works for one person’s profile, cars, and circumstances won’t work for another.”