Whether you’re a young driver eager to gain some independence with your very own car or an experienced driver shopping around for your dream car, the cost of insurance is something that every motorist has to deal with.
According to statistics from the RAC, a third of UK motorists pay more than they need to for car insurance. In fact, many people pay as much as 40% more for car insurance than they could by switching to a less expensive provider.
A variety of factors go into calculating the cost of your car insurance, some of which you can control and others of which you can’t. By shopping strategically, you can get cheaper insurance and enjoy a more affordable motoring experience.
From shopping around to using basic negotiating tactics to get the best possible deal from your current provider, read on to find out eight proven ways to get cheaper car insurance.
Compare insurance providers to find a better deal
You might be surprised to learn how much you could save by switching to another insurance provider. The price of car insurance varies massively between insurance companies – often to the point where you could save hundreds of pounds a year.
Calling insurers one by one is extremely time consuming, so spare yourself hours of phone calls by comparing insurance policies online. You’ll often find a 10-30% price gap between major insurance providers for extremely similar policies.
When comparing prices, it’s very important that you double check the fine print and cover conditions. Some policies might look identical at first glance but have different levels of cover that are only revealed after careful analysis.
If you’re certain that another policy offers better value while still providing the same or better level of cover, switch providers. Switching to a new insurer is the quickest, easiest way to get cheaper car insurance.
Install an immobiliser, alarm and GPS tracker
Car insurance covers more than just accidents. Theft is a major concern for insurers, and showing that your car is safe and protected from theft can have a serious effect on your car insurance rates.
If your car’s make and model is a particular target for thieves, you could be paying an inflated insurance premium. Ask your insurance provider if you can save money by installing an alarm or immobiliser – you may be able to get a five to 10% saving.
Use public transport to lower your annual mileage
The higher your annual mileage, the higher your insurance costs. Decreasing your total miles driven reduces your risk of being involved in an accident, which results in lower car insurance rates.
If you’ve started taking the bus or train to work and no longer drive as frequently as you once did, contact your insurance provider and ask for a reduction in mileage. It could save you £100 or more per year.
Drive rarely? Switch to a low-horsepower city car
The larger and more powerful your car’s engine, the higher your insurance. If you drive a fast, powerful sports car, you’re probably paying more than your peers for car insurance, even if you drive it slowly and safely.
Insurers base their pricing around risk factors, and the model of car you choose, its engine size and its previous accident record all play a major role in determining the price you’ll pay for cover.
If you rarely drive, consider switching from a sports car to a small, economical city car. Not only will you save on your car insurance – you’ll spend significantly less on petrol.
Switch to a telematics insurance policy to cut costs
Young drivers often get the short end of the stick when it comes to insurance. As a high-risk group, they’re forced to pay for insurance that’s excruciatingly expensive, regardless of their personal driving habits.
If you’re a young driver who’s responsible and cautious on the roads, you could save a significant amount of money by switching to a telematics policy, where your habits on the road determine how much you pay for cover.
Telematics involves the installation of a small computer in your vehicle to track its movement and behaviour. The on-board computer tracks whether you’re heavy on the accelerator and sharp in the corners or controlled, careful and cautious.
If you drive responsibly and pay attention to road conditions, your car’s on-board computer will send this information to your insurer and your policy will become much more affordable. This is a great option for younger drivers.
Pay in a lump sum instead of via monthly payments
While paying monthly for your insurance might improve your personal cash flow, it could be costing you hundreds of pounds a year. Paying your insurance in an annual lump sum payment is a great way to reduce the cost of your cover.
Paying for an entire year’s worth of insurance at once might be costly, but it saves you a significant amount over time as you’ll avoid monthly charges, interest rates and other hidden fees.
Don’t be afraid to negotiate with your provider
Who says you can’t haggle with your insurance company? If you’ve found a cheaper price for car insurance from another provider, consider calling your current insurer and letting them know you’re considering switching.
Remember to be persuasive when buying car insurance. They need your business, don’t sound desperate, let them bow for your money & negotiate
— Melisizwe Notwala (@Melsiz) November 10, 2014
Members of consumer website Which? saved an average of £42 per year in 2014 by calling their insurance companies and negotiating. Your insurer could be far more responsive than you think to a little bit of old fashioned bargaining.
Car insurance is a fiercely competitive market, with the cost of acquiring a customer significant and the cost of losing one even greater. If you love to get a good deal, why not call your current insurer and let them know you’ve found a better offer?
Young driver? Use the Pass Plus scheme and save
In addition to switching to a telematics insurance policy, young drivers can reduce the cost of their car insurance by completing Pass Plus. Pass Plus is a six-hour skills course for young drivers that teaches them how to drive more carefully.
Thanks for reading. Make sure to stay tuned to the Warrantywise blog, Facebook and Twitter for more great content throughout 2015!