Car insurance premiums can feel like a heavy burden, especially when they seem to rise year after year. However, while your premium largely depends on factors like your car, age, and claims history, there are several steps you can take to help stop the increase—or even reduce your premium.
Here are 20 practical tips to help you save on car insurance:
- Buy Insurance Online
- Shop Around
- Bundle Your Policies
- Pay Your Premium in Full
- Increase Your Voluntary Excess
- Reduce Your Annual Mileage
- Install Security Devices
- Take an Advanced Driving Course
- Don’t Overestimate Your Car’s Value
- Maintain a Good Credit Score
- Consider Third-Party Only Insurance
- Keep a Clean Driving Record
- Remove Unnecessary Drivers
- Add an Older Driver
- Build Up Your No-Claims Discount
- Protect Your No-Claims Discount
- Choose a Lower Insurance Group Car
- Join a Car Club
- Add Your Spouse as a Named Driver
- Take the Pass Plus Course
1. Buy Insurance Online
Many insurance companies offer discounts for online applications. Since this is an automated process, it costs them less to handle, and those savings are passed on to you. Discounts can range from 5% to 10%, making it worth your while to get an instant online insurance quote.
2. Shop Around
Not all insurance companies are created equal. Each uses different formulas to calculate your insurance premium, meaning that one insurer may offer a significantly lower rate than another. Shopping around and comparing quotes from different companies can result in substantial savings.
3. Bundle Your Policies
Insurance companies often offer discounts if you buy multiple products from them, such as combining your car insurance with home or contents insurance. By bundling your policies, you can save a significant amount across all your insurance premiums.
4. Pay Your Premium in Full
Paying your insurance premium in one lump sum can help you avoid interest charges associated with installment payments. Some insurers may charge up to 15% APR on installments. Moreover, you might receive a discount for paying in full, making it a cost-effective option if you can afford it.
5. Increase Your Voluntary Excess
Your excess is the amount you pay in the event of a claim. By opting for a higher voluntary excess, your insurance company may reduce your premium. Just make sure you can afford to pay the excess if you need to make a claim.
6. Reduce Your Annual Mileage
The fewer miles you drive, the lower your insurance premium can be. Most insurers quote based on an estimated annual mileage of around 12,000 miles. If you drive less than this, you might qualify for a discount. Be honest about your mileage, as insurers may verify it through MOT and service records in the event of a claim.
7. Install Security Devices
Theft is a significant factor in determining your insurance premium. Installing an alarm, immobilizer, or tracker can reduce the risk of theft and result in lower premiums. While an alarm or immobilizer might provide a small discount, a tracker could lead to more substantial savings.
8. Take an Advanced Driving Course
Passing an advanced driving test demonstrates to your insurer that you have enhanced driving skills, making you less likely to be involved in an accident. This can lead to a reduction in your premium.
9. Don’t Overestimate Your Car’s Value
When applying for car insurance, resist the temptation to inflate the value of your car. In the event of a total loss, the insurance company will only pay out the market value of the car at the time of the accident. Overstating the value will only increase your premium without providing any benefit.
10. Maintain a Good Credit Score
Insurance companies increasingly factor in your credit score when calculating premiums. A good credit score can help you avoid unnecessary additions to your premium. Keep your credit in check to save on your insurance.
11. Consider Third-Party Only Insurance
Third-party only insurance is the minimum coverage required by law and typically the cheapest option. If your car is of low value, you might want to consider this type of coverage. However, remember that it won’t cover any damage to your vehicle in the event of an accident.
12. Keep a Clean Driving Record
Driving convictions can dramatically increase your car insurance premium. By maintaining a clean license, you prove to the insurance company that you are a safe and careful driver, which can lead to lower premiums.
13. Remove Unnecessary Drivers
If there are drivers on your insurance policy who no longer use the vehicle, remove them. Having fewer drivers on your policy, especially those who are young or inexperienced, can help reduce your premium.
14. Add an Older Driver
Some insurance companies offer lower premiums for young drivers if they add an older, more experienced driver to their policy. This could be a parent or a more seasoned relative, which can help lower costs for young drivers.
15. Build Up Your No-Claims Discount
One of the most significant factors affecting your car insurance premium is your no-claims discount. The longer you go without making a claim, the bigger your discount—up to 75% for five or more years without a claim. The safer you drive, the more you save.
16. Protect Your No-Claims Discount
While protecting your no-claims discount will increase your premium slightly, it might be worth it. A single claim could raise your premium by up to 75%. Protecting your discount ensures that your years of safe driving are not wiped out by one unfortunate incident.
17. Choose a Lower Insurance Group Car
The car you drive plays a crucial role in determining your insurance premium. Most insurance companies use the Association of British Insurers (ABI) Group Rating, which ranks cars from 1 to 20. Generally, the higher the group, the higher the premium. Opting for a car in a lower group can lead to significant savings, particularly for young or inexperienced drivers.
18. Join a Car Club
If you own a classic or specialist car, consider joining a car club related to your vehicle. Many clubs offer insurance schemes with very competitive premium rates, which could be lower than standard insurance policies.
19. Add Your Spouse as a Named Driver
Some insurance companies offer discounts if you add your spouse as a named driver, as they view marriage as a sign of stability. Stability is often associated with safer driving, which could result in a lower premium.
20. Take the Pass Plus Course
If you are a new driver, consider taking the Pass Plus course. Some insurance companies offer discounts of up to 25% for drivers who complete this course. When you’ve just passed your test and don’t yet have a no-claims discount, this could result in substantial savings.
Conclusion
Saving money on car insurance requires a combination of strategic planning and informed decision-making. By following these 20 tips, you can significantly reduce your premium and keep more money in your pocket. Remember, the key is to shop around, maintain a clean driving record, and take advantage of discounts and bundles.
With a little effort, you can enjoy the peace of mind that comes with being well-insured without breaking the bank.
