WHAT YOU NEED TO KNOW TO REDUCE YOUR CAR INSURANCE
The cost of almost everything is going up at the moment, and car insurance premiums are no exception. According to Confused.com, the average car insurance policy is currently £554, which is £32 more than last year.
Every pound counts at the moment, so it's worth shopping around as switching providers can help you save. If you're looking for a new policy or you want to know what factors might affect your quote when you renew your car insurance, we've rounded up everything you need to know.
What factors influence the cost of your premium?
- Age. Car insurance tend to get cheaper between the ages of 17 and 25. They tend to rise again once you turn 60.
- Where you live. Locations that experience a higher number of claims, traffic, theft and accidents are likely to have higher premiums so where you live makes a huge difference to the cost.
- Your driving history. If you have made any claim in the past or have points on your license this will have an impact. The longer you have been claim free the lower your premium is likely to be.
- Your occupation. Whether your job involves travel or not will be one of the factors considered by insurance companies.
- Your car. The age of your car, the make, model, fuel type, transmission and engine size will all invariably affect your insurance premiums.
- Annual mileage. The more you use your car, the more of a risk you are.
How can you reduce the cost of your car insurance?
1. Shop around and compare
When the quote pops through your letterbox to renew your car insurance, it may be tempting just to stick with the provider you have. Don't fall into the trap — it's always worth comparing.
Research by MoneySupermarket suggests that you could save up to £319 a year by comparing car insurance quotes. The more quotes you get, the better your chance of finding the cheapest one. Remember to compare all insurance quotes on a like-for-like basis though. Some may offer breakdown cover as an optional extra and for others it may come with the policy, so check all these details.
Once you've rounded up your quotes, it's worth going back to your current insurance company and ask them to match any cheaper quotes you've found.
GHI Tip: If you can, avoid paying for your premium monthly as it's always cheaper to pay in one payment.
2. Don't over insure
Always put a realistic value on your car — when asked to value our cars most of us have a pretty inflated price in our mind so it is worth checking similar makes and models online to get an idea of the replacement cost. Remember in the case of an accident the insurance company will only pay out the market value of the car at the time of the claim.
Sites like AutoTrader or What Car? can help you to assess the true market value of your car.
3. Look carefully at the excess
Increasing the amount of the excess on your policy will bring down the cost of your premium, but remember it will mean paying more when you claim.
4. Consider a black box
The use of a telematics system or black box as it's often known provided by an insurance company to track your driving is becoming more popular, particularly among new drivers, as a way to reduce insurance costs. However, all drivers can benefit as the regular feedback you get on your driving can make you an overall safer and better driver. However, be aware that it won't necessarily mean a decrease to your premium.
5. Get the right cover for you
Choose between a comprehensive or third party cover carefully. Always check the differences between the price of both, as it might not be financially sound to pay the difference depending on the car’s value but remember third party cover is not always the cheapest option.
6. Keep your car safe
The safer your car is tucked away at night, the happier your insurance company will be. Any additional security features you add can make a difference to your premium, including an alarm, immobiliser or keeping your car in a garage overnight.