Sorting out your car insurance is one of those annual chores that most of us absolutely dread.
It’s incredibly tempting to just jump onto a comparison site, sort by the cheapest price, and click buy within 5 minutes just to get the whole thing over with (if you’re looking to switch from your current provider, that is). However, picking a policy based solely on the lowest number can easily backfire if you ever need to make a claim.
From understanding the true cost of your voluntary excess to making sure you haven’t accidentally invalidated your cover with the wrong annual mileage, there are a few critical details you need to check before signing on the dotted line. Looking past the basic price tag is the only way to ensure you’re actually protected when it matters most.
Shopping around is the single biggest thing you can do.
The most important habit when it comes to car insurance is comparing policies and prices from a wide range of providers. Insurers target different types of drivers, which means the cheapest insurer for your best mate, partner or neighbour might not offer the best deal for you at all. Loyalty is rarely rewarded in this industry either, so simply renewing with the same provider year after year almost always means paying more than you need to.
Comparison sites are by far the easiest way to do this. They let you fill in your details once and see quotes from dozens of insurers in one go. Statistics from MoneySuperMarket suggest savvy shoppers can save hundreds of pounds a year just by switching providers, and yet a surprising number of people still just accept their auto-renewal price without checking what’s out there. A few minutes of comparison can genuinely make a huge difference to your annual bill.
Time your renewal properly.
One of the lesser-known tricks for getting cheaper car insurance is to buy your policy around three weeks before your renewal date, rather than leaving it to the last minute. Insurers see last-minute buyers as a higher risk and often hike prices closer to the renewal date. By starting your quote process early, you’ll usually see noticeably lower premiums on offer.
Paying annually rather than monthly also works out cheaper in the long run. Monthly payments include interest, which can add a fair chunk to the overall cost of your cover. If you can’t afford to pay it all in one go, some people use a 0% purchase credit card to spread the cost, then clear the balance before the interest-free period ends. That way you get the cheaper annual rate without the upfront hit to your bank account.
Understand the three main levels of cover.
There are three main types of car insurance to choose from, and picking the right level matters more than just opting for the cheapest. Third Party Only is the most basic and the legal minimum required to drive in the UK. It covers damage you cause to other people, their cars and their property, but not your own car or yourself. Counterintuitively, it’s not always the cheapest option, since insurers often see third party drivers as higher risk.
Third Party, Fire, and Theft adds protection for your car being stolen or damaged by fire, which gives you a bit more peace of mind. Fully Comprehensive is the highest level of cover and protects your own car as well as everyone else’s. Despite sounding more expensive, comprehensive policies are often surprisingly competitive and sometimes cheaper than third party options. Always quote for all three levels when comparing and see which works out best for your situation.
Get your mileage right.
Insurers ask how many miles you drive per year because the more you’re on the road, the higher the chances of being involved in an accident. Over-estimating your mileage will cost you more, while under-estimating it could mean your insurer refuses to pay out if you have an accident. Both are bad options.
The trick is to work it out properly rather than guessing. Add up your weekly mileage including commuting, school runs, supermarket trips and any other regular journeys. Multiply that by 52 for an annual figure. If you also use your car for work meetings or visiting clients, that counts as business use rather than just commuting, and you’ll need to declare that too. Getting this right could save you money and protects you if you ever need to make a claim.
How your excess affects your premium
The excess on a car insurance policy is the amount you pay yourself if you make a claim, with the insurer covering the rest. There are two parts to it: compulsory excess set by the insurer, and voluntary excess that you choose. Increasing your voluntary excess will lower your premium, sometimes in a big way.
The catch is that if you ever have an accident, you’ll need to pay the combined excess before the insurer pays out anything. So if you’ve set a high voluntary excess of £500 on top of a compulsory £250, you’d be paying £750 out of your own pocket before your claim kicks in. Only push your voluntary excess up to a level you could genuinely afford to pay in one go if you needed to.
The optional extras worth considering
Car insurance policies usually come with a range of optional extras like legal expenses cover, windscreen cover, breakdown assistance and use of a courtesy car if yours is being repaired. These add to the cost of your premium, so it’s worth thinking about which ones you’d actually use rather than ticking every box.
Windscreen cover is often surprisingly cheap to add and can save you a fortune if you get a chip or crack. A courtesy car is genuinely useful if you’d struggle to get to work without your own vehicle. Legal expenses cover can help you pursue compensation if you’re hit by an uninsured driver. Breakdown cover is worth having but you can often buy it cheaper as a standalone product through providers like the AA or RAC rather than tacking it onto your policy.
How your car itself affects the price
The make and model of your car has a huge impact on what you’ll pay for insurance. Every car in the UK is assigned an insurance group from 1 to 50, with 1 being the cheapest to insure and 50 being the most expensive. Groups are based on factors like the car’s performance, safety features, security, the cost of replacement parts and how difficult it is to repair.
If you’re buying a new car, it’s worth checking the insurance group before committing. A car that costs only slightly more to buy might be in a much higher insurance group, costing you hundreds extra a year to insure. Smaller, less powerful cars with good safety records are generally the cheapest to cover, while sportier models, modified cars and luxury vehicles tend to sit at the top end.
Your driving history matters more than anything.
Your past as a driver has one of the biggest influences on what you pay. Any previous accidents, claims or driving convictions like speeding tickets will push your premiums up. The longer you go without making a claim, the more your no-claims discount grows, which can knock large amounts off your annual bill.
Protecting your no-claims discount is one of the best long-term moves you can make. Most insurers let you add no-claims protection for a small extra cost, which means you keep your discount even if you do have to make a claim. Before making a small claim, think carefully about whether it’s worth it. If the damage is only a couple of hundred pounds more than your excess, you might be better off paying for repairs yourself and keeping your no-claims record intact.
Where you live and where you park
Your postcode is a major factor in your insurance price. Insurers look at things like crime rates, traffic density and how often claims are made in your area. Living in a quiet rural village will usually cost less than living in a busy city, all other factors being equal.
Where you park your car overnight also matters. A car kept in a locked garage is cheaper to insure than one parked on a public street, with a driveway sitting somewhere in between. If you’ve got the option to park more securely, even just on your own driveway rather than the road outside, it’s worth declaring it on your policy. Some insurers also offer discounts for cars with extra security features like trackers, immobilisers, and alarms.
Adding named drivers
Adding an additional driver to your policy can sometimes lower the cost, particularly if they’re more experienced than you. A spouse or older relative with a clean driving history added as a named driver can bring your premium down considerably. The key is that they need to genuinely use the car occasionally, not be added just to bring the price down.
What you absolutely can’t do is something called fronting, where a more experienced driver pretends to be the main driver of the car when it’s actually being driven mainly by someone else, usually a younger family member. This is insurance fraud and if discovered, your policy will be cancelled and any claims refused. It can also affect your ability to get insurance in the future, so it’s just not worth it.
Honesty is genuinely the best policy
When filling in your details for a quote, accuracy matters enormously. Insurers verify the information you provide, and any mistakes or omissions can lead to your policy being voided or claims being refused. Be honest about your job, your mileage, any modifications to your car, any previous claims and any medical conditions that need to be declared.
If you have multiple cars in the household, it’s worth looking into multi-car policies that can offer discounts compared to insuring each vehicle separately. Combining cover with a partner or family member often works out cheaper, too. Some insurers also offer telematics or black box policies, particularly for younger drivers, where your driving is monitored, and good behaviour is rewarded with lower premiums.
The questions to ask before you commit
Before clicking buy on any policy, take a proper look at what’s actually included. What’s the excess? Is windscreen cover included or extra? Is a courtesy car part of the deal? What’s the claims process like, and how quickly do they handle them? What are the reviews from existing customers like?
The cheapest quote isn’t always the best policy. A slightly more expensive insurer with better customer service, faster claims handling, and more useful inclusions might end up saving you money and stress in the long run. Reviews on independent sites like Trustpilot and Defaqto ratings can give you a real sense of which providers genuinely look after their customers and which ones are a nightmare to deal with when something goes wrong. A few extra minutes spent reading reviews can save you a world of grief later.
