In a cost of living crisis, it's important to save money and not pay more than what's necessary. And whilst there might not be such a thing as 'cheap' car insurance prices, there's always ways to cut back – just like with most things.
Sure, factors like your age, job, driving experience and access to a driveway are the usual 'big-hitters' when it comes to cheap car insurance, but not all of us have access to a time machine, nor maybe the desire or freedom to change career.
Fortunately, there are other factors (like avoiding penalty points or purchasing your insurance in advance) which also affect the final price and which can be more easily controlled. So to help you on your way, we've put together some handy tips and tricks on car insurance which you can't 'afford' to miss.
Let's take a look . . .
Does Leasing Affect Insurance?
Leasing a vehicle doesn't tend to affect car insurance either way. The only difference is that you'll definitely need fully-comprehensive cover, meaning no cutting costs by opting for third-party cover (besides, comprehensive cover actually works out cheaper nowadays in many cases).
Apart from that, you'll still be paying roughly the same as a car owner or somebody on a PCP deal.
Choose Your Car Carefully
A big factor that's maybe sometimes overlooked, but it should come as no surprise that one of the most important things which can drive down the cost of your car insurance is … the car itself.
In case you don't know, cars are split into various insurance groups, with different price marks attached to each group according to their 'risk level', which is based on everything from fuel consumption to the level of CO2 emissions.
We're not saying that you shouldn't get that Alfa Romeo you've always dreamed about, but the cheapest car insurance groups usually belong to simpler cars like the Ford Fiesta. So before rushing headfirst into a premium brand, do take some time to research the market, find out which are more economical, more cheap to maintain and less mechanically risky, and so forth. Of course, if you have your mind set on a sports car, then that's your decision, but be aware that they're generally more 'high risk' for insurance firms.
Age and Experience
Think age is no measure of wisdom? Insurance firms would tell you otherwise.
That's because young drivers are statistically far more likely to drive irresponsibly and be involved in more accidents. From the insurance point of view, those aged under 25 fall into this 'high risk' group and will therefore see higher premiums.
Age isn't the be-all and end-all, however. The number of years you've been driving also plays a part. For example, someone aged 55 who's just passed their test might pay more than a 25-year-old who's been driving for five or six years without having to make a claim.
Think Carefully About How You Describe Your Job
Probably the second-most important factor when it comes to car insurance costs is the nature of your work/occupation. Generally speaking, that's because some occupations are deemed as more desirable than others in the eyes of insurance firms. If your job involves a lot of travel, for example, then you're more likely to have an accident and are therefore higher-risk.
Of course, it's important not to be misleading when filling out a form for a car insurance quote, but do think carefully about how you could 'embellish' your job title without being untruthful. For example, you could enter 'cook' for chef, or 'writer' for journalist, and find that the insurance cost comes down as a result.
But if you do bend the truth a little too far, then you could find your car insurance premium being cancelled or you could even face prosecution for insurance fraud. Ouch!
Park Your Car Off the Road
One of the other main questions asked on an insurance form is where you park your car overnight. This helps insurers analyse the risk of it being broken into, vandalised or damaged, so it's no surprise that it can make a big difference to what end up paying for your premium.
You might be surprised to learn that a private driveway can actually be a better option than storing your car in a garage due to the potential of you damaging it when driving in and out. Both though help reduce the chances of your vehicle being stolen or damaged whilst parked, which will lead to a lower insurance price.
If you do need to park on the road, you're best doing it in a well-lit area or preferably somewhere near CCTV, so that thieves and vandals are less likely to target the car.
Ensure Your Car is Safe and Secure
Tying into the previous point, insurers are keen to know that your car is a safe bet and that there's little chance of theft or anything similar occurring.
Therefore, the installation of alarms, immobilisers, and other safety equipment can all help reduce your insurance premium and minimise the risk of something happening to your car. You might need to contact your insurer directly to see if the savings reflect in the premiums, and be sure that the cost of the kit which you buy doesn't override any potential savings you could make.
Drive Fewer Miles
It's a basic principle for insurers: the less distance you drive, the less risk you are of getting into bother and making a claim, meaning cheaper insurance for those with low mileage needs.
And remember to keep an eye on your mileage count throughout the year just in case there's a danger of it exceeding the annual limit which you agreed to in the policy. Otherwise, there's a chance that any future claims you make could be turned down.
How Does Driving to Work Affect My Insurance Premium?
Same idea here. Because it means you'll be spending more time on the road and more time for a potential accident to happen, driving to work should be avoided whenever possible if you're really keen to get cheaper car insurance.
Consider using alternative means of transport. Try cycling, or maybe getting a ride-share with a colleague or family member.
Avoid Penalty Points (Endorsements) On Your Licence
Being a safe driver isn't only good for you and other people, it also gets you more discounts when it comes to your car insurance policy. If you have a clean licence with no penalty points, you should find that you avoid any hefty hikes on your insurance premium.
Buy Add-Ons Separately
Getting the full insurance package in one go can be tempting, but you'll find that things like breakdown cover, windscreen cover, legal protection and use of a courtesy car can often be cheaper elsewhere if you buy them as standalone policies.
Take Out Black Box Car Insurance
Otherwise known as a telematics device, a black box is essentially a small GPS-tracking device that's fitted inside your vehicle (usually in a discreet location, like behind the dashboard or near the engine/battery).
It records your driving habits and behaviour by scoring you on things like speed, braking and whether you drive often at night-time (usually classed as between 11pm and 6am). You can view your score via a downloadable smartphone app, and if you score well enough over the course of a year, your premiums will likely be lowered. Drive badly, on the other hand, and you could even see a rise.
Best thing is, even new drivers can have a black box installed (in fact, that's often who they're specifically geared towards), and as a bonus, they help make your car easier to trace in the event that someone steals it.
Compare Different Car Insurance Quotes
Even if you're happy with your current insurance provider, you're likely to make savings by switching. Remember, there's alternatives to the big-name providers, and a specialist insurer might be able to give you a better deal if you’re in a 'high-risk' group or have a modified car.
Loyalty doesn't always pay. It's a free market, so do your due diligence and shop around!
Beware of Auto-Renewal
On that note, don't leave off getting a new car insurance policy till the last minute. Otherwise, your current provider can 'trap' you into another year if you haven't got auto-renew turned off.
And although New Financial Conduct Authority (FCA) rules mean that insurance providers can no longer quote existing customers a higher premium to renew their insurance than what they'd pay as a new customer, it still doesn't mean the price is good.
If you find a better price elsewhere, you could even contact your current insurer and ask them to match or lower the price.
Buy Your Insurance in Advance
This is another big one.
You'd be surprised how much cheaper an insurance policy becomes if you book it two or more weeks before it's due to begin. This can often reduce the cost by hundreds of pounds, whereas if you were to start a policy on the same day, insurance companies will think you're desperate and won't offer you the best deals.
By contrast, booking a policy within one week of the start date isn't going to make much of a difference to the final price. Two to three weeks hits the sweet spot.
Pay a Higher Excess
Another easy win when it comes to getting a cheaper quote.
The excess is the amount of money you'd pay up yourself if you ever needed to make a claim. A higher excess will mean lower premiums, but just be aware that you will need to pay it if you file a claim, so don't go so high that you wouldn't be able to afford it.
Build Up a No Claims Discount
If you go for a long length of time without making a claim on your insurance, you’ll be rewarded with a no claims discount (NCD) which can be built on overtime. Maintaining a good NCD can be such a money-saver that it’s often cheaper to pay for repairs yourself if you have a bump, rather than making a claim.
Some people deem them so sacred that you can even 'protect' a no claims bonus in the event of a minor claim by paying a small fee.
Pay Annually Rather Than Monthly
Paying monthly can often seem easier because it allows you to spread the payments out over the course of a year, but this usually come at the cost of adding between 6-17% interest onto your premium (costing UK drivers some £544million per annum).
So if you have access to the funds up-front, the better choice is to pay in one lump sum.
Add a Named Driver to Your Policy
An insurance policy typically allows for up to three named drivers, but simply adding another driver won't necessarily help. It all depends on the nature of the driver and whether they're deemed 'reliable' from the perspective of insurers.
If you just recently passed your test, the addition of a more skilled, experience driver onto your policy will tend to bring the price down. Or even if they aren't experienced, they may have a low-risk occupation, which could also have a positive effect.
On the other hand, if you add a younger, unexperienced driver to your policy, then the price will probably go up. And be aware that's it's illegal to pass off someone as the primary driver of a vehicle when that's not the case. This is called 'fronting' and can invalidate your insurance policy.
Sign Up For an Advanced Driving Course
Driving courses like the Pass Plus scheme might not always automatically qualify you for a discount, but some do. That being the case, don't be shy to get in touch with your provider to check if enrolling on one would make a difference to the cost of your premium.
Plus, they're designed to develop your skills and make you a better driver, meaning less chance of you being involved in an accident and having to file a claim. (At least in theory!)
So don't just take a driving course for the sake of ticking a box and trying to reduce your premium. After all, the cost to enrol onto one could well outweigh any potential savings you might make.
Is It Cheaper to Insure An Electric Car?
Not really.
Although the cost is gradually going down, electric cars have traditionally been more expensive to insure due to their higher repair and replacement costs. They contain a lot of parts that are still relatively 'state-of-the-art' when it comes to the overall car market.
Summary
As you can see, there's a lot more to getting cheaper car insurance premiums than just your age, driving experience, and overnight parking location.
So, next time you're sorting out your policy, you'll be all set.
FAQs
Can I get cheaper car insurance if I call?
It never hurts to ask. Pick up the phone and give the companies with the cheapest quotes a call. You never know, you might be able to haggle a discount or get a better policy.
Which drivers pay the most for their car insurance?
Statistically, young drivers tend to pay the most. That's because they lack experience and are more likely to have an accident and file a claim.
Does insurance go down after a year?
Yes, assuming you haven't had to make a claim in that space of time.
Why is car insurance cheaper with more drivers?
Because insurance companies assume that the primary driver is going to be spending less time on the road, meaning less chance of accidents and claims.