Auto insurance tips
With the cost of motoring spiralling out of control it can be tempting to cut corners on car insurance to save some cash. However by following some simple steps you should still be able to find a great deal.
Here are our tips to keep your costs in check:
Tip one: Choose a suitable car
Many car buyers think beyond the retail price and consider how much the vehicle will cost them in terms of fuel and road tax – but not enough of us factor in insurance costs too. So before you search for a new car, use the Association of British Insurers' database to see which insurance group the vehicle fits into – the lower the group, the lower the premiums.
As a rule of thumb, older cars with smaller engines qualify for cheaper premiums – older cars usually cost less for insurers to replace, and cars with smaller engines are less likely to be involved in high speed accidents. Stick to standard specifications too – the sportier the model, the higher your premiums are likely to be.
Tip two: Choose the right level of cover
Clearly, the more cover you take out the better, in case an accident occurs. However, if you're driving a car that cost less than £1,000 when you bought it, you may decide that a third party or third party, fire and theft policy is sufficient to cover damage to other vehicles – otherwise you may pay as much in insurance costs as you do for the vehicle itself.
If you opt for comprehensive cover, think carefully about which policy options you need. For example, do you really need a courtesy car if you already have access to a second vehicle? Do you need cover for ‘commuting' or ‘business use' or do you just use the car as a run around? Carefully assess which policy options you need.
Tip three: Assess the excess
Before you begin shopping around for car insurance, think about the level of excess you can comfortably afford – the excess is an amount you must pay towards the cost of a claim.
Most car insurance policies include a compulsory excess – an amount set by the insurer; and a voluntary excess, which is an additional amount you agree to pay at the outset in case a claim is ever necessary. Setting the excess at a high level will reduce premiums as it means the insurer will have less to pay out on a claim – however, you should only set it at a level you can comfortably afford.
Tip four: Look for bonuses
Look to see if the insurance company offers a no-claims bonus – normally insurers carry a maximum bonus which can be worth around 60 per cent off your premiums after five years. For young drivers there may be rapid bonus schemes available, allowing them to earn a full year's no-claims discount in less than 12 months.
Tip five: Lower your risk
Insurers assess premiums based on risk – the more likely you are to make a claim, the more you are likely to pay. Lowering this risk therefore, should pay off.
For example, consider adding security devices to your car such as alarms, immobilisers and trackers – insurers should be able to recommend systems that earn the largest discounts. Parking in a garage overnight could reduce premiums by around five per cent; while agreeing to a mileage limit can also help you save as the fewer miles you travel, the less likely you are to be in an accident.
Tip six: Shop around online
Once you know what level of cover you want and what excess you can afford, you're ready to shop around. In the past, comparing car insurance quotes involved picking up the phone and calling around or contacting a broker. However now the task is straightforward thanks to the success of comparison websites which effectively do the work for you – just enter your details into one of the leading websites and it could return quotes from more than 100 insurance providers potentially saving you time and money.
Tip seven: Buy online
Some people are reluctant to buy online – but in the car insurance world it really pays off. Most insurers offer cheaper deals online because of the savings they make on overheads – so use the internet to your advantage.
Tip eight: Add a relative / friend
You might assume that the more people you have on a car insurance policy, the more expensive it will be. However, if you add an older, more experienced motorist as a named driver on your policy you could actually reduce your premiums. Adding young drivers however, should be avoided – and don't ask an older driver to ‘front' a policy for you, as this is illegal.
Tip nine: Pay annually
Paying premiums monthly can be convenient, but many insurers charge interest for this payment method. By paying premiums upfront for the year you can avoid these interest charges.
Tip 10: Don't stick with what you've got
Even if you got a great deal when you initially took the policy out you should still shop around before each renewal period as many providers offer introductory rates to new customers that you could take advantage of.