How to save thousands on your car insurance

Car Insurance
Car insurance application form, car key and keyring

Every car needs to be insured, and there are plenty of insurers who will happily take your money.  But although the car insurance industry is very competitive, it’s still possible you are paying far too much money for your annual policy.  Follow the tips below and you will make sure that you are getting the best deal while still getting the best cover.

Whether you use one of the many comparison sites or contact the insurer directly, you can potentially save hundreds of pounds on your premium. And by making sure you are properly covered, you could save thousands if you need to make a claim.

Check your insurance costs before buying a car

When choosing your next car, its easy to forget that your insurance premium may be significantly more expensive than it is for your current car.

Certain models attract higher car insurance premiums because they are considered high risk. This particularly applies to performance models or sports cars, even if the car itself is not that expensive.

Many people have bought a car and then realised that it was prohibitively expensive to insure, and then had to try and cancel their purchase or sell their newly-purchased car because they can’t afford to insure it. This ends up costing a fortune, so make sure you understand the insurance implications of your car choice.

Two blue 64-plate Golfs, but the one on the right will cost a lot more to insure

Two blue 64-plate Golfs, but the one on the right will cost a lot more to insure

Shop around – every year

Many people will use comparison sites or get quotes from a few different insurers when buying a car, and then simply renew their car insurance with the same insurer every year afterwards without double-checking the price. If this sounds like you, then you could be missing out on significant savings.

After the first year, your insurance company might bump your premium up significantly. Even if you notice this, you may think that it’s too much hassle to check their pricing against competitors, or that it might not be any cheaper elsewhere. And as a result, you end up paying too much each year.

The car insurance business is a competitive industry, so if you shop around for good deals then you will almost always find them. But you need to do that shopping around every year. Just because your current insurer was best last year doesn’t mean they will be best next year, or the year after that.

Don’t accept their first offer

When your insurer sends you your insurance renewal quotation, don’t assume that there is no room for negotiation on the price. If you your shopping around and find a cheaper price elsewhere, simply call your insurer and ask them to match it. The sales team usually have some scope to give you a discount, so it’s well worth the call.

Like many businesses, insurance companies know that most people will simply accept the renewal quotation, even if they grumble about it.  But by doing about 15 minutes of homework online and making one phone call, you could save a big chunk on your premium.

Of course, this is not just for renewals. Whenever you are getting a quote for insurance, always assume there is room to negotiate the price – because there usually is.

If they won’t match another offer, switch!

Don’t expect your insurance company to reward you for your loyal custom. They will always try and take as much money from you as they can. If their price its higher than offered elsewhere and they won’t agree to match it, or at least drop to something comparable, then take your business elsewhere. They assume that you won’t leave, but it’s honestly not all that much hassle, and the savings are better off in your pocket than in your insurer’s.

Consider a black box recorder

Some insurers are now offering reduced premiums if you agree to have a black box driving recorder fitted to your car. This device records your driving style and assesses your level of risk – so if you drive sensibly, your insurance premium is reduced.

It’s controversial because people dislike the Big Brother aspect of insurance with such telematics, but if you’re looking for the biggest savings possible, it’s worth considering.

Clear out your garage

If you are playing around on comparison sites or online calculators, you will often find that small changes to your personal details can make a significant change to the price quoted. For example, keeping your car in a garage instead of on the street can result in a markedly reduced premium. If you have a garage that has been overrun with junk, this is an excellent excuse to clear it all out, sell the stuff you don’t need on eBay and make room for your car.

Car insurance is cheaper if you garage your car – so clear out the junk!

Clear out that rubbish and a car will easily fit in here

Don’t pay for things you don’t need

Insurance quotes will often bundle in features like European cover, additional driver cover and other things which you may not need. If you opt out of these extras, you may find a worthwhile drop in the price. Just make sure that if you do find you need them later on, you call the insurer and get them added back onto the policy.

Likewise, carefully consider your annual mileage. If you only do 6,000 miles per year in the car, there’s no need to be insured for 10,000 miles. Again, if your mileage starts to go up, you can call the insurer and have the cover increased to allow for the extra mileage.

Don’t invalidate your insurance!

If you provide incorrect information to the insurance company, you face the very real risk that your cover will be void if you ever try to claim on it. Failing to declare that speeding fine, or omitting to mention that the car had been modified, is likely to mean that you won’t be covered.  When you make an insurance claim, the insurer will check everything to make sure it is all in order. If there is any breach of the terms and conditions of your policy, your claim will be rejected and you will be liable for any costs – which could be many thousands of pounds.

Don’t try and outsmart the insurers to save a few quid on your car insurance. If they find any evidence that you have lied, they will refuse to pay out and you will be left with a very large bill.

If your circumstances change and your insurance premium skyrockets, go back and shop around again for a better deal. It might be a bit of a hassle, but it’s worth the effort.

Hopefully the lads from Top Gear declared their modifications and overseas travel to their insurers

Hopefully the lads from Top Gear declared their modifications and overseas travel to their insurers

How your car insurance premium is calculated

When requesting an insurance quote or making an application, you have to provide a considerable amount of information. This covers both personal details and information about the car you are insuring.

Each piece of information you provide will influence the final amount, either increasing it or decreasing it. Some factors will make a large difference to the premium, while others may only make a tiny difference. And each insurance company will weigh each factor differently.

For example, one insurer might charge you significantly more if you car is parked on the street rather than in a garage, while another insurer might only charge slightly more. Some insurers will charge more than others for certain makes and models, or for different annual mileages.

Each insurer will use their own data and research to determine their prices, as well as national industry data. If one insurer has had a run of thefts on a particular model of car (even if the national average for that car is very low), they will inevitably see that car as a high risk and whack their premiums up for that model accordingly. Another insurer may have never had any problems with that same model, so they don’t penalise their customers.

Level of cover

Insurers are providing you with cover against loss in certain circumstances, but not all insurers provide the same level of cover. Some insurers will provide a courtesy car while yours is being repaired, while others won’t. Some will allow you to insure your car at an agreed value, while others will only allow market value (this is particularly important for rare or unusual cars, where values may vary significantly).

When looking at a car insurance quote, it is important to look beyond the price and actually understand what you are covered for. Don’t pay for cover that you don’t need, but equally you need to make sure you are covered for the most likely scenarios that would lead you be claiming on your insurance.

What information do you need to provide?

The following is a summary of the key information you will need to provide your insurance company:

  • address (where the car will live, and where it is parked overnight)
  • finance details (they may have specific requirements for cars on finance)
  • your job details (some jobs will attracted higher insurance premiums)
  • your no-claims bonus (they will need to see proof of this, not just your word)
  • your driving history (including speeding fines and any other convictions)
  • the vehicle details (make, model, engine, transmission – usually in a lot of detail)
  • any modifications to the vehicle from its original specification
  • your annual mileage
  • use of the vehicle (social and domestic, commuting, business use)

Do you have any car insurance tips to share?  Let us know in the comments below.

Stuart Masson

Stuart is the Editor of The Car Expert, which he founded in 2011, and our new sister site The Van Expert. Originally from Australia, Stuart has had a passion for cars and the car industry for over thirty years. He spent a decade in automotive retail, and now works tirelessly to help car buyers by providing independent and impartial advice.

10 Comments

  1. Great article Stu – very informative, I sort of fell into the ‘can’t be bothered trap’ last year, although I did call my insurer to get a discount on quoted price but didn’t do as much homework as I could have. Will be interested to see the impact of this year’s ‘change of profession’ as not quite sure what to call myself yet on the options they give in the drop down. Thank you!

    Reply
    • Stuart Masson

      Hi Tabs. The choice of job title is often amusing – I think I’m officially a website designer, because the insurance company didn’t have anything more suitable and their staff don’t have the option of manually adding a new line.

  2. montypark

    Hi people’s out there, it is Monty here,

    I have just been reading an interesting story regarding car Insurance.

    The person involved was a car trader, who had a vehicle of the trade insured by her. which she used to use daily. It became a little worse for wear so they decided to sell it.
    He sold it to another trader, who obligingly paid cash for it and drove it away. now with it being a weekend he had difficulty in contacting her insurers to cancel the insurance, so thought I will do it at a later date. He and his family then went away on a short break and he had totally forgot about cancelling the insurance.
    In between all this the trader who he sold the car to went and sold it on to another person.
    In the following week they got a visit from the police, because the car that they sold to the trader had been involved in an accident and the driver of the said sold vehicle drove off leaving the scene of the accident, so the police could only trace back to the previous person who had insured the car, that being his wife.
    Now this is the difficult part. He showed the police the receipt/ invoice of the sale of the vehicle all dated and timed at the point of sale. apparently now because he did not cancel the insurance they are now liable for the payment of the repairs to the third party vehicle and also liable for any compensation claim for personal injuries to the third party, this because by not cancelling the insurance on the sold vehicle, they are seen in the eyes of the law of allowing a vehicle to be used on the road without insurance. This is called a cascade claim introduced by ( you’ve guessed it ), The EU commission on car/ vehicle insurance. Which means that any third party claiming because the person involved is not insured they cascade down to the next persons who insured the vehicle and not cancelled it. So that person is liable for all costs. Now the insurance company who had insured the car will not accept liability because the insurer allowed that vehicle to be driven without insurance and because they were not a named person on that insurance, the insurance becomes void. Now the said insurers who covered the wife will probably cover all costs but will make a personal claim on the person who was insured, because they allowed a person who was not named to drive the vehicle. So all the liability fall on the last person insured to drive that vehicle. and that could amount to thousands of pounds especially if personal injury claims are put forward.
    The said couple are now in fear of assets being seized because of accident, and personal injuries being involved, this could mean losing their home and any other assets if the value of their home is not enough to cover any costs involved.
    So this is a personal reminder that should you sell a vehicle no matter who to, cancel your insurance before you sell it, or you could leave yourselves open to all sorts of claims.

    Some of you may know this already, and some of you will not, Just beware.

    If you can take a look at this: http://www.whitedalton.co.uk/motorbike-blog/2013/09/cancel-your-insurance/
    All the best Monty.

    Reply
    • Stuart Masson

      Wow, that seems completely crazy. Do you think that a court would award that level of costs against them if it was a clear case of the vehicle being sold twice well before the accident took place?

    • montypark

      Look at the thread on Andrew Dalton, 16th Oct 2013. I sold my bike but did not cancel insurance . it is law so beware.

    • Stuart Masson

      Have fixed the link now, wasn’t working before.

    • montypark

      The latest I’ve heard now is that there was considerable damage to the vehicle, and there was personal injuries too. The extent of the cost has been passed to the insurers underwriters, and it looks very much like they are going after the the blokes wife’s assets.
      Depending on the costs of these could possibly make him and her bankrupt and the house will go so virtually homeless unless a brilliant solicitor can come up with something.

      So the information is: If you are going to sell a vehicle make sure your insurance is cancelled from day one. As soon as the V5c document has been signed by you and vehicle and keys are handed over. Cancel the insurance, if you cannot cancel till the following Monday then do not let go of the vehicle until all your responsibilities for it have been cancelled.

      I hope this information is helpful to you all.

      Monty.

  3. montypark

    What happened to my last thread

    Reply
    • Stuart Masson

      Hi Monty. It was held by the spam filter for manual moderation because you included a link in it. I have approved it now, so you should be able to see it.

  4. montypark

    Just an addition to my last thread. If you can not find the thread on the link. scroll down to Archives and select date 16th Oct 2013, Andrew Dalton Third thread down, ( Sold my bike but did’nt cancel insurance). This will give you an insight of how insurance really works.

    Monty

    Reply

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