What information do I need to compare car insurance?

June 3rd, 2022
What information do I need to compare car insurance?

When you need car insurance, it is always recommended to shop around to secure the best possible quote for your unique circumstances. This advice also applies to car insurance renewals, as policy prices tend to automatically rise every year after the policy is taken out.

Do I really need to compare car insurance?

The short answer is yes, even though the insurance industry has recently undergone the most significant shake-up for several decades.

As of January 2022 [1], insurers must now charge new and existing customers the same price for the level of cover they need. The Financial Conduct Authority (FCA) responded to countless complaints over many years from unhappy consumers highlighting that customers who chose to switch insurers regularly were securing significantly better deals than loyal customers who chose to automatically renew an existing policy.

The FCA discovered that many insurers were artificially lowering their prices to attract new customers and subsequently increasing prices significantly the next year. This tactic was known as “price walking” and insurers were even going as far as specifically targeting customers they believed would be unlikely to switch insurers when it was time for their policy to renew. This led to some loyal customers being charged hundreds of pounds more [2] for the same policy taken out by a new customer.

However, although steps have been taken to put an end to what has been called a two-tier insurance sector, there are still savings to be made simply by shopping around frequently.

Why?

Well, because although insurers are no longer permitted to favour new customers, they can still charge customers who are using different price comparison sites markedly different rates. They must simply demonstrate to the FCA that existing and new customers are receiving the same level of insurance at the same price on aggregate.

In addition, different insurers have different target markets, so if you are part of their ideal demographic, they may quote accordingly to capture your attention. Insurers may also view where you live, the type of vehicle you drive, and your claims history in very different ways, which will all affect your quote.

It is always best practice to conduct a quick car insurance quote comparison, as it is the most effective way to ensure that you are getting the most competitive rates for your requirements.

What do I need to have to hand when comparing car insurance policies?

If you have purchased car insurance before, the latest documentation you have received should clearly display everything you will need. But don’t panic if you don’t have these documents to hand, as the good news is that you should only need a few simple pieces of information to get started with your car insurance comparison quote.

Personal information needed for a car insurance quote comparison

It is always a good idea to ensure you have the following pieces of personal information to hand when beginning a car insurance quote comparison:

  • Your age and address
  • Your occupation
  • Your driving licence number
  • Details of any accidents or claims made during the last 5 years
  • How many years of no-claims bonuses you have
  • Information relating to any additional drivers you would like the policy to include

You will also need to declare whether you have any points on your licence. If so, you must include the specific conviction code.

You may also be asked what your vehicle is used for, such as commuting to work or solely for personal use.

Vehicle information needed to compare car insurance in the UK

Insurers also require information about your vehicle to provide you with an accurate quote for your needs. This includes:

  • Your vehicle registration
  • The make and model of your vehicle
  • An estimation of your annual mileage, which can be found by checking your MOT history [3]
  • Whether your vehicle has any modifications
  • It will also be helpful to have at least an estimate of the price of your current car insurance policy if you have one.

Will my credit rating be affected by car insurance comparison quotes?

Some insurers will run what is known as a ‘soft’ search on your credit record, which is primarily done to accurately verify your identity. Soft searches will appear on your credit file [4] however your credit rating will not be affected and other companies will not be able to view them.

How to choose the correct type of car insurance

When purchasing car insurance, it is important to note that there are three main types to choose from. The type of cover you choose must include everything you need to protect you and your vehicle.

– Third-party car insurance

All vehicles on the road are legally required to have at least a valid third-party car insurance policy. This is the lowest level of insurance available on the market and will ensure that you are covered for:

1. Damage to another person’s property

2. Injury to another person

This type of policy will also cover any passengers in your vehicle. However, don’t make the mistake of assuming that the lowest level of cover will automatically be the most affordable option, as this often isn’t the case and you don’t want to be paying more for a lower quality policy.

– Third-party fire and theft car insurance

Like third-party insurance, this type of policy will protect you should you cause damage to another person’s property or injury to another person. Again, your passengers will also be covered. Additionally, third-party fire and theft insurance will also cover you in the event that your car is stolen or damaged by fire.

– Comprehensive car insurance

Comprehensive car insurance is the highest level of cover you can purchase for your vehicle and covers:

1. You and your vehicle

2. Other people and other people’s property

Notably, despite delivering the most protection for you and your vehicle, this type of insurance policy is sometimes the most affordable option. So, it is always worth conducting a comprehensive comparison to ensure that you are getting the most value for your money and the peace of mind that you are properly protected.

How much does car insurance cost?

The price you will pay for your car insurance policy will be affected by a variety of different factors, including your age, where you live, the vehicle you drive, and your driving history. Your quote may also be higher if you park your vehicle on the road rather than inside a garage or if insurers deem that your occupation is high risk.

Like many sectors, however, pricing trends do affect car insurance costs. In 2021, for example, the Association of British Insurers (ABI) found that the cost of car insurance fell to a six-year low [5]. The average car insurance customer paid £434 for a comprehensive policy, which was 7% lower than the equivalent policy cost in 2020.

Although the average car insurance premium increased by £11 from quarter 3 to quarter 4 in 2021, prices were still 3% lower than in the same time period in 2020.

I need the cheapest car insurance, what should I look for?

As the cost of living rises, we’re all looking for ways to make savings to allow our finances to stretch further. Car insurance is just one area in which you could make significant savings simply by conducting a price comparison online at Free Price Compare.

This is particularly true if you have several years of no-claims, which could allow you to benefit from a no-claims discount. It can be easy to assume that a significant no-claims discount will automatically mean you are receiving the best deal, however, this isn’t the case. In fact, often a no-claims discount won’t compensate for a very high renewal premium, which could mean that you would end up paying more than you need to.

For example, receiving a 30% no-claims discount on a policy that costs £1,000 will ultimately cost less than receiving a 50% no-claims discount on a policy costing £1,600. Remember, that you are generally able to transfer your no-claims history to another insurer who will take it into account when calculating your quote.

Can I get cheap car insurance as a new driver?

New drivers are typically subjected to higher car insurance premiums, however, there are ways to save money even if you have just passed your test. This includes black box policies, which offer rewards for demonstrably driving with more caution than the average person.

Other money-saving tactics include:

  • Increasing your voluntary excess
  • Adding another older, more experienced named driver to your policy
  • Driving a vehicle that is cheaper to insure
  • Taking a Pass Plus course

I’m over 50, can I get cheap car insurance?

Car insurance policies often become more affordable as we age, however for people over 50 they can start to increase. There are several providers who specifically market policies for the over-50s but do bear in mind that they may not be the most affordable option.

Although it is beneficial to obtain quotes from all insurance providers, it is worth noting that some over-50s specific insurers often include perks that may be worth your attention.

I’m a low-mileage driver, can I get cheap car insurance?

Low-mileage drivers, who are officially classed as those who drive less than 6,700 miles per year, can often receive higher insurance quotes than drivers who cover more miles in a year. This means it can be worthwhile choosing a policy that charges you by the mile, which will track your driving via a black box.

If you’re searching for this type of policy because you only need coverage for a short amount of time, you may be better off selecting a temporary car insurance policy. This type of insurance is often offered on a rolling monthly basis and won’t incur high cancellation fees.

Can I haggle with a car insurance provider?

Although insurers are no longer permitted to increase the price of your policy when the time comes to renew, there are numerous other reasons why your premium may rise. It is possible to haggle with your provider and many customers may find they are successful simply by sharing a handful of providers who have provided a cheaper quote for a like-for-like policy.

Some insurers simply won’t budge from their original renewal quote, at which point it is often beneficial to walk away and secure a more affordable deal with another provider. If you do want to stay with the same insurer and reduce your premium, however, you could think about removing some elements of your cover or increasing your voluntary excess costs. It is still vital to prioritise the level of cover that meets your needs, even if that does mean switching providers.

Are there any other ways to save money on car insurance?

It is always worthwhile delving into the fine print to ensure that you aren’t paying for any add-on features that you simply don’t need. You may also be able to find legal cover or breakdown cover separately elsewhere for a cheaper price.

If you can afford to, paying for your premium upfront will often work out cheaper than paying monthly because you won’t need to pay any interest charges that may be incurred.

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