Car insurance takes a big bite out of household budgets, running into hundreds or even thousands of pounds a year.
But there are plenty of ways to cut the cost. Here are our seven top suggestions fromMoneySuperMarket on how to make valuable savings…
Shop around every year
Many of us renew our car insurance with the same firm every year. But that’s almost always going to be a costly mistake.
That’s because insurers don’t reward loyalty – in fact, they do the opposite. They keep their best deals for new customers, so anyone who stays put year on year will more than likely see their premium go up.
But if you make yourself a ‘new’ customer by shopping around, you put yourself in line for a better price.
Boost security
Thwarting thieves has two benefits. First, you’ll be less likely to make a claim – that’s always a hassle, and it can erode any no claims bonus you’ve accumulated.
Second, you might secure a discount from your insurer. If your car was built after 1998, it will have a factory-fitted immobiliser as standard, but you might trim your premium by fitting an alarm or a tracking device.
Always plump for devices that are approved by Thatcham (it will say on the packaging), and have them fitted professionally.
Careful where you park
With security still in mind, remember that where you park your car can impact your premiums.
If you can park on a driveway or, even better, in a garage, you’ll pay less than if you park on the street.
Not all of us have this choice, of course. But if you tell your insurer you park in a garage and then leave your car on the street – maybe because your garage is full of other stuff – you might run into problems if you claim for theft or vandalism.
Keep the miles down
The more miles you drive, the more likely you are to have an accident. That’s a fact. And the higher your annual mileage, the higher your premium.
For most of us, we drive the number of miles we drive, so reducing our mileage by a meaningful number isn't really an option.
But it’s important to put a realistic number on the insurance proposal form. Many people stick 10,000 or 12,000 miles a year down without too much thought – even though they could be doing many fewer.
That said, don’t put an inaccurate low number on in the hope of saving a few quid. If the insurer finds out, they could quibble any claim payment. Just be realistic, and if your premium falls, happy days.
Increase your voluntary excess
All car insurance policies have an ‘excess’ – the amount you pay towards any claim you make.
For example, you might have an excess of £200, which means you’d receive £300 from the insurer towards a £500 claim.
The excess is made up of a mandatory and a voluntary portion. You have the option to increase (or decrease) the voluntary one – increasing it will reduce your premium, and vice versa.
Put a ‘named driver’ on your policy
If you add another person to your policy, you’ll probably find the premium falls.
Just make sure the person who does most of the driving is the ‘main’ driver. If you try to game the situation by wrongly saying someone who is older and more experienced than you is the main driver, you’ll run into major strife if the truth comes to light.
Pay upfront – if you can
It can be difficult to find the money for a hefty insurance premium all in one go, which is why insurers are quick to offer you the chance to pay by instalments.
But watch out – they charge interest on top, so a £500 annual premium could cost the thick end of £600 when spread over 12 months.
If you can’t pay upfront, an option is to take out a credit card that doesn’t charge interest on purchases for at least 12 months. You pay with the card, then pay off the card before it starts charging interest.
Settle up with the card before the 12 months is out. Leave it any longer and you’ll end up paying this year’s and last year’s premiums at the same time.
Also Read:
Why car insurance can now cost more than your car does
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