How to save money on car insurance

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How to save money on car insurance

Car insurance can be expensive. According to the most recent car insurance price index, the average comprehensive policy costs £783. 

But insurers use a few different things to work out how much you’ll pay for your car insurance, like your driving experience, your age, the car you drive and where you live.

The best way you can save money on car insurance is by comparing different car insurance providers for like-for-like cover, based on what you need and what you’re looking for.

We’ve put together a few tips on how you can save money on car insurance:

1. Don't auto-renew your car insurance

People often find themselves with the same car insurer year after year. And changing your car insurance is one of those things that can feel harder and longer to do than it actually is (kind of like switching your bank!).  Insurers unfortunately know this, and will often charge you more and more each year!

New rules introduced in 2016 by the Financial Conduct Authority, mean that your car insurance provider has to tell you about any price changes. But it’s a good idea to put a reminder in your diary if you know your renewal’s coming up so you don’t forget! 

Compare the price your current insurer’s giving you to other car insurers. If you find something cheaper, call your insurer to see if they can match it.

2. Always compare 

When you're comparing car insurance quotes, make sure you're comparing like-for-like cover. Watch out, as sometimes policies are cheaper because they give you less cover.  

Comparison sites like Compare the Market, MoneySupermarket and are the best place to start when you're looking at renewing your car insurance for a better deal. Also, it's always good to check the insurance companies that don't feature on comparison sites, like Direct Line and Aviva.

3. If you're buying a new car, the type of car can matter 

If you're looking into buying a new car, it might be helpful to check quotes for the cars you're considering. Things like your car's value and engine size can make a difference to your car insurance cost.

Imported cars can often be more expensive to insure because car parts will be harder to find. It's sometimes cheaper to get car insurance on a UK model.

4. The person driving the car should ideally be  the car’s owner

If the owner of the car is different to the person who’ll  actually be driving it, car insurance can be higher (for example, if you own a car but your children drive it and you insure them on it). 

5. Make sure your car is fitted with a security device

If your car has a security device like an alarm or immobiliser, this can act as a deterrent to thieves. Insurance companies are more likely to offer you cheaper car insurance because the security devices mean that your car is less likely to be broken into! 

Most new cars come fitted with a car alarm and immobiliser, but some people add extra security devices like a tracker.

6. Third party car insurance might not be the cheapest

Third party car insurance is car insurance that's the minimum legal level of cover you need to drive a car. People often think this is the cheapest option, but that's not always true...

Car insurance providers think people who pick this as an option are more of a risk, and so it can often be a more expensive option.

7. Buying car insurance three weeks before you need it can save you lots

Money Saving Expert looked at quotes from three of the biggest price comparison sites MoneySupermarket, and Compare The Market, and found that buying your car insurance 21 days before you actually need it can save you hundreds of pounds. 

Read the full price investigation to find out more about it. They also found the price often increased closer to the start date of the policy.

8. A long no-claims bonus is key to cheaper car insurance 

A no-claims bonus or no-claims discount is the time you haven't made a claim on your car insurance policy. It varies between different car insurance providers, but having a no-claims bonus of five years or more will mean cheaper car insurance. 

Find out more about a long no-claims bonus here.

9. Increase your voluntary excess

Voluntary excess is the amount you'd pay if you made a claim on your car insurance policy before your insurance provider made a payment. It's in addition to a compulsory excess. The voluntary excess always stays the same, even if the damage is your fault.

When you agree to pay more towards a voluntary excess, insurers often bring car insurance premiums down. If an accident isn't your fault, you can get back the voluntary excess you paid. Keep in mind that you shouldn't let voluntary excess rise too high if your car isn’t worth that much.

10. Less mileage means more saving

Less mileage often means a saving on car insurance premiums. When you're getting a quote, make sure you're honest about how many miles you realistically do each year because any inaccuracies can impact claims! If you don't use your car for work, you may be able to get a cheaper rate.

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