Car insurance: Money Saving Tips

December 13th, 2019
Car

Given the cost of buying a car, tax, car insurance and fuel, owning a car in Britain is expensive. Insurance within itself can be one of the biggest components of the driving budget, with young drivers paying significantly more than the average motorist.

To help overcome some of this cost, Free Price Compare has listed some of the money saving tips below.

Selecting the right car

Car insurance groups are divided in terms of numerical category 1 to 50 – the higher the insurance group, the higher the premium is likely to be as the category of the car, is determined by factors such as cost of repairs and engine size. To find out which category your purchase might fall in, visit www.thatcham.org

You should also be wary not to carry out modifications such as purchasing expensive rims as this will add on to the premium. At the same time, if you enhance the security in the car, by perhaps adding an immobiliser or adding an alarm, this should reduce the level of car insurance premium. To add, you should try and park your car in a garage overnight, more than 50% of thefts happen at night, so the more secure the parking, the less the car insurance premium should be.

Mileage

Statically, the more your drive/are on the road, the higher the chance of an accident occurring and the higher the premium is likely to be. But this doesn’t mean to say that you should understate the amount of miles your are likely to cover to your insurer, as you could breach the mileage limit agreed by your insurer and hence, the policy would be declared void should you choose to claim.

Telematics car insurance

Telematics car insurance is also commonly known as the black box insurance as the insurance company would physically send an engineer out to fit a black box into your vehicle. This box monitors driving habits such as speed, acceleration, braking, time of travel, distance travelled etc. This will not only encourage you to drive more safely but the quote is more bespoke to your personal risk as appose to the demographics of the age group.

Voluntary Excess

In most cases, there is a mandatory policy excess of £150, but you do have the option of increasing this voluntary excess. Voluntary excess is effectively the money you are willing to put forward in case of a claim, hence if you increase the voluntary excess, then you are transferring the risk from the insurer to yourself and hence there should be a reduction in the quote of the car insurance.

No Claims Discount (NCD)

If you don’t claim from your car insurance company, then you will earn a no claims discount/bonus in the following year. These discounts add up year on year and in some instances can lead to up to 80% discount off the premium.

Given that the discount is likely to substantial depending on the number of claim free years, for minor accidents it might be worth paying for the damages yourself. In many cases you can even choose to protect your no claims discount but you will have to pay more of a premium and it will be limited to a certain number of claims.

Remember, the no claims discount is transferable between different car insurance companies, so if you compare and find a better deal elsewhere, you should change your insurance provider to the one which best suits your needs.

Types of car insurance cover

The minimum legal requirement is for all motorists in the UK is to have third party car insurance cover, which pays out for claims made against you but not for repairs on your own vehicle. Other options include third party fire and theft car insurance which also pays out if your car is stolen or damaged in a fire. Finally comprehensive car insurance cover is the most popular type of motor insurance. It includes injury/damage payout for you and for anyone making claims against you. The policy can sometimes also include extra benefits such as legal expense insurance in case there is a dispute. However, for cheap car insurance you may need to cut out the frills as insurance companies also offer optional extras such as a courtesy car and breakdown cover. But this will increase the amount of premium and hence you should consider if you actually need the benefit.

For young motorists, third party cover is likely to be the cheapest but this is not always the case and in some instances the difference is very small so it’s probably worth upgrading the cover.

Moreover, if you car is old and is not worth much then third party cover is probably adequate as the insurance company will cover the cost of the other party and you can drive legally.

Online

Buying insurance online makes it cheaper for the insurer to process the insurance application, which also means online discounts for the customer. So if you’re thinking of buying car insurance, then it’s highly recommended to looks for all the possible deals online. To add, you should pay for your car insurance policy upfront as appose to on a monthly basis, as paying the full amount upfront is cheaper due to charges, such as admin and interest, levied on monthly payers.

Advanced driving courses

Many experts recommend that young drivers should improve their road skills by enrolling into an advance driving course. By completing a recognised driving course, you would become a safer driver on the road and hence insurers will offer a discount, up to 35%, for the reduced risk of a claim.

Out of all the advanced courses, the most popular is the Driving Standard Agency’s Pass Plus scheme. But institutions such as ROPSA, the institute of Advanced Motorists and the RAC offer a similar course.

In most cases you will be required to pay for the advance driving course, but your local council may contribute towards the cost and the discount in premiums might offset the initial cost of the course.

Compare Compare Compare

Whilst it feels easy to take the renewal quote from your current car insurance provider, it is unlikely to be the best option available in the market. Hence, it is advisable for all motorists to look at all the options/suppliers available in the car insurance market. To help you do this quickly and easily, check out the Freepricecompare.com comparison tool.

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