How you can lower your car insurance premiums

How you can lower your car insurance premiums

The rising cost of car insurance has been in the news a lot recently, with the average premium now costing around £1000 per year. For younger or newer drivers, this has been particularly painful, and premiums costing several thousand pounds a year are not uncommon.

The increases are being blamed on a lack of spare parts, recent inflation, and the complexity of modern cars making them more expensive to repair. But is there anything you can do to help bring down the cost of insurance premiums?

We've put together the following tips that may help to lower your premiums, but a word of warning: you must remain truthful when getting quotes. If you do have to make a claim, the insurer will likely check the circumstances and verify everything you told them; if they find you have been less than truthful, they may refuse to cover you. You should also try to limit the number of changes you make to your quote in a short timeframe, as insurers may suspect you are not being truthful in your answers.

With that said, let’s get to the tips!

Don't just use comparison sites

Comparison sites have revolutionised the way we buy insurance. It is now far easier to directly compare prices from many different insurers than it was before. However not all insurance companies feature on these sites. If you're a young or inexperienced driver facing a hefty premium, it is worth spending the extra time to get a quote directly from those companies as they may offer a better deal.

Increase your voluntary excess

Excess is the amount you personally have to pay out if you make a claim and it is usually composed of two parts; mandatory and voluntary. The mandatory excess is fixed by the insurer and cannot usually be changed, but increasing the voluntary component of excess that you're willing to pay in the event of a claim may help to significantly lower your premium.

Be aware that you will have to pay both the voluntary and mandatory excess if you make a claim, so make sure you can afford both.

Check your credit score

Insurers may run 'soft' credit checks on potential customers, and your details may be a factor in your premium quote. Check that your current address is correct, and that you are registered to vote.

You can often check your credit report for free with online services.

Pay annually if you can

Paying the annual premium at the start of the policy is usually cheaper than paying monthly. If you pay monthly, you're effectively taking out a credit agreement, and interest will be added to your premium. The insurer may also run a 'hard' credit check on you, which may impact your credit score.

Add an experienced named driver to your policy

Adding an experienced named driver such as a parent or spouse to your policy can help to lower your premium. However, never add the experienced driver as the ‘main driver’ unless they truly are the main driver of the car. Adding someone as the main driver who isn’t really going to be the main driver is known in the industry as ‘fronting’, and if the insurer discovers this when you make a claim, they may refuse to cover you!

Consider a 'black box' policy

So-called black boxes are a relatively recent innovation in car insurance. The black box will record how you are driving by measuring acceleration, braking, and steering forces. It will upload this data to your insurer, who can use this information to adjust your premium according to how you are driving.

If you drive in a way they consider safe, this type of policy can save a young or inexperienced driver money compared to a non-black box policy. However, make sure you understand how your driving will be assessed and drive accordingly. If you drive in a way they consider undesirable, the insurer may increase your premium or even cancel your policy.

Don't modify your car

You must tell your insurer about any modification you make to the car because any modifications might affect its performance or desirability. Even relatively minor changes like a different set of alloys or a performance exhaust should be declared to avoid problems if you need to make a claim later.

Many mainstream insurers are risk-averse when it comes to modifications, and will either charge a much higher premium or refuse to insure you at all.

If you do have a modified car, it might be worth getting a quote from a specialist insurer.

Buy a 'sensible' car

If you have not already bought a car and are looking for one, try to shortlist only those which fall into a low insurance group. Every trim level of a car model will have a standardised insurance group from 1-50, regardless of insurer. The insurer will use the insurance group to help calculate your premium; the higher the insurance group, the higher the premium.

Cars in low insurance groups are usually lower performance, have fewer toys, and are less desirable (and therefore less likely to be stolen), but they will usually be cheaper to insure as a result.

Consider where you keep the car

A mistake people often make is to assume that keeping a car in a garage overnight will lower the premium, however this is not always the case. Garages tend to be quite narrow and full of other items, which means garaged vehicles may be more likely to suffer bodywork damage. Insurers know this, and as a result you might find that leaving your car on the driveway or even in the road leads to a lower premium in some cases.

Consider a dashcam

This is probably good advice anyway, but it can also help lower your insurance premium. Be aware though, that if you tell the insurer you have a dash cam, but then cannot or will not provide them with the footage of any incident, they may reduce their payout or refuse to cover you.

Lower your mileage (to a point)

Lowering your annual mileage can reduce your premium, as statistically if someone drives more miles they’re more likely to be involved in an accident. However this usually only works down to a point, as if the figure is very low, the insurer may assume you don’t drive much and therefore haven’t gained a lot of experience. You should take care to not understate your mileage; if you say you only drive 3000 miles a year, but then drive 9000 miles, the insurer will start asking uncomfortable questions should you make a claim!