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Drive down the cost of car cover
By Naomi Caine
If you think the cost of your motor insurance is creeping up, you are probably right. Premiums have been rising over the past year, according to the AA British Insurance Premium Index. They edged up by 1.24% in the third quarter to an average of £772.
And it looks like they could be heading further up. Norwich Union, the biggest motor insurer, announced premium rises of up to 40% last month. So how do you cut the cost of cover?
Premiums depend on a variety of factors that statistically determine where you are more or less likely to put in a claim. They include your age, gender, occupation and postcode. You can't do much about the first two - and you are unlikely to change your job or move house to get a better motor quote. But there are several ways to cut the cost of car insurance. Perhaps the most obvious is to shop around. Insurers are also offering no-frills policies and special deals for "green" drivers.
Compare the best motor insurance deals here
But take care! The cheapest policy might not be the best deal. For example, some people need a policy that includes a courtesy car, or roadside assistance. You might also want insurance that automatically pays for a new child seat if your car is involved in an accident. And do you often keep sport kit in the car? If so, check the cover for personal possessions.
To help you get the best deal at the best price, here are some top tips for motorists.
- Shop around
Do you automatically renew with the same insurer each year? If so, you are probably wasting money. The average motor premium is £772, but the typical "shop around" premium is £459 - a saving of more than £300.
There's really no excuse for sticking with your current insurer. There are several websites that let you compare premiums, including Yahoo!'s Car insurance wizard, www.confused.com and www.elephant.co.uk. It's best to try a couple of websites because they do not all compare premiums for the same companies. You should also try a couple of direct insurers, such as Tesco and Direct Line.
Compare up to 98% of online insurers with the Yahoo! MotorWizard here
- Buy online
If you arrange your cover online you can usually secure a discount of at least 10%. Some insurers offer a deeper discount, sometimes as much as 25% of the premium.
- Check your excess
The amount you pay towards any claim is called the excess. The typical excess is £250, but you can volunteer to pay a higher excess in return for a lower premium.
- Go green
You might be able to get a discount if you drive a car that's environmentally friendly. Swiftcover, the online insurer will, for example, knock 10% off your premium if you drive a Honda Civic, Honda Insight, Lexus GS, Lexus RS or a Toyota Prius. Also bear in mind that sports cars, convertibles and luxury motors all cost more to insure.
- Pay upfront
Most insurers are happy to let you spread the cost of your premium in monthly instalments - and no wonder! They often charge interest of up to 20% if you don't pay in full upfront.
- Name that driver
If you want to insure other people to drive your car, make sure you name them on the policy. If you cover "any driver" it can bump up the premiums.
- Your car only
It's quite common for an insurance policy to cover a motorist to drive other cars. But if you stick with your own car, you should be able to reduce the premium.
- Keep it in the family
Some insurers, notably Direct Line, will offer a discount to other members of the household, perhaps your husband or daughter. So it might pay to switch all motorists to one insurer.
- Don't claim
There's not much point in paying for insurance if you never make a claim, but you should certainly try to limit the number. You can then build up a no-claims discount (NCD), which can lead to big savings. If you don't make a claim for five years, you could earn a discount of more than 50% of your premium.
Check the sort of claims that will affect your NCD. Most companies exclude "no fault" claims, but it's worth asking.
You might also want to find out if you can protect your NCD. If you have built up three years of no claims but make a claim in the third year, you might lose all of your discount. Or you might be able to make just one claim and keep your NCD. Jon Sellors of More Than, the insurer, says: "Traditionally insurers reduce a customer's no-claims discount after a claim. But it's crazy for people to pay for car insurance and then not claim for fear of losing their NCD. We're the only insurer to offer motor insurance that allows drivers to keep their no-claims bonus for life, regardless of the number of claims they make."
- No frills
A number of insurers offer no-frills policies that don't include some of the extras such as courtesy cars. They can be a great way to save money - just as long as you know the limitations.
- Caught on camera
The number of speed cameras on the roads means that the number of drivers with speeding convictions has gone up over the past few years. If you have points on your licence, then you will probably have to pay a higher premium for your insurance.
But there are some companies that offer decent deals to motorists who have been caught on camera. Try Budget, Direct Choice and Endsleigh.
- Big brother
Norwich Union offers a pay-as-you-drive policy that could work our cheaper for some motorists. You install a black box in your car that tracks your movements, so you only pay for insurance when you drive the car.
It's quite tricky to work out whether the policy is right for you because you have to calculate when your drive, how far and on what type of roads. But it could help younger drivers, who pay big premiums for car cover. If they don't drive between 11pm and 6am, they could cut their premiums by more than a third.
More Than's Drive Time deal is similar. It offers a 40% discount to motorists between the ages of 18 and 25 who don't drive at night.
- Road safety
Insurers always want to know if you park your car on the street. Why? Because it's more likely to be stolen or damaged. If you don't have a garage, you're a bit stuck, but you might be able to cut the premium if you install an approved alarm system. Some insurers also offer discounts to motorists who take an advanced driving test.
- You're so special
Some insurance companies 'cherry pick' their customers so they can offer supposedly lower premiums. Sheila's Wheels, for example, promotes its policies to women drivers. If you have a clean driving record, you might also want to try Privilege or eSure. But don't assume the quotes will beat the conventional insurers. It's always best to compare specialist deals with mainstream offers.
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