Car insurance is a legal requirement for all vehicles that use or are merely kept on public roads in the UK. And at an average annual cost of £485 for fully comprehensive cover, it’s a significant portion of the nearly £2,000 a year Britons will spend running their cars. Drivers under 25 and those who have made previous claims will face even higher premiums.
While you can’t magically age yourself into a better insurance pool or undo the mistakes of the past, you can take some steps to reduce your car insurance premiums today. Understand your insurance options, drive safely, and be a savvy shopper and you could pare hundreds of pounds from your insurance cost.
- Accumulate a no claims bonus and protect it
Prove to your insurers that you’re a safe driver—and owner—of a vehicle by going years without making a claim and they’ll reward you with a reduction in your premiums. Just one year of no claims bonus can trim 30% from your insurance premiums. Accumulate more than five years of good behaviour and no hail storms—that’s the maximum most insurers will count—and you could reduce your premiums by 60-65%. Some insurers offer accelerated policies that allow you to accrue a year of NCB in just 10 months.
A claim generally knocks two years off your NCB, which can spell significantly elevated premiums. You can protect your NCB by driving safely, storing your car in a garage, and installing a security system for it. But of course you can’t control the driving of others on the road (or stop a very determined thief) and if you’re involved in an accident that isn’t your fault and your insurer can’t recoup all the costs of your repairing the vehicle from other party’s insurer, your NCB can take a hit. But pay a little extra on your premium you can protect your NCB against one or two claims a year. Think of it as an insurance policy for your NCB.
- Increase your voluntary excess
All insurance policies will have a compulsory excess—the amount you’ll have to contribute to any claim—but you can shave your premiums by increasing your voluntary excess. Don’t hike it too high, however, as you might find yourself shouldering the entire cost of some repairs, and wondering why you’ve been paying premiums for insurance at all.
- Improve your vehicle’s security
Add an industry-approved alarm, immobiliser, or tracking device to your older vehicle—new vehicles should come with these as standard—and you could see a 5% reduction in your premiums.
- Store your car in a garage
You’ll need to disclose where you normally store your car overnight when obtaining quotes for insurance. Keeping it in a garage can spell savings over parking it on the street, as cars in garages are less likely to be stolen, damaged by inclement weather, or struck by other vehicle. So clean our your garage: your wife will thank you and your insurer reward you.
- Reduce your mileage
You’ll also need to tell your insurer approximately how many miles you drive a year. Reducing your mileage can trim your premiums substantially. Cut 5,000 miles from your annual driving and you can save £50. Shave off 10,000 miles and your premiums could drop by £100, not to mention the savings you’ll see in fuel and car maintenance and your impact on the environment.
You need to be honest when telling your insurer how much you drive, however, as misrepresenting this figure could invalidate any claim.
- Consider a black box (telematics) policy
You can prove to your insurer you’re driving a limited number of miles—and safely and rarely at night—by using a black box, a device stored in your car, or an app running on your phone, that records your driving. If your insurer likes what the black box is saying, your premiums will fall.
- Pay yearly
If you pay your premiums in monthly installments, you’ll be charged interest. You can save money overall by paying your premiums for the year upfront in a lump sum.
- Don’t assume fully comprehensive policies are more expensive
You might think that fully comprehensive car insurance policies, offering more cover than third party and third party, fire and theft policies, would come with higher premiums. In fact the opposite is true, as the more limited policies tend to attract riskier drivers, prompting insurers to hike fees for them.
Of course, this is information you’d find out if you…
There are dozens of car insurance companies vying for your premiums. Take advantage of a competitive market by gathering as many quotes as possible and picking the policy that offers the most cover for the lowest fee. A car insurance comparison website can take the grunt work and endless forms out of shopping around, harvesting you dozens of quotes with a single query.