Avoid paying a premium for car insurance

Latest figures reveal the soaring costs of cover, with warnings of further rises to come. But here’s what you can do to get a better deal

Car insurance costs are racing ahead of inflation, with the typical premium up by 13.5% in the space of a year – or more than 16% if you live in London.

Figures issued this week by Consumer Intelligence, a market research agency whose data is used by the government, show that the average UK motor premium is £788. However, the typical bills in north-west England and London are a lot higher: £1,177 and £1,068 respectively. At the same time, LV=, one of the biggest motor insurers, suggests premiums are set to rise further this year.

So what can you do to cut the cost of your cover? Here we outline 10 top tips that could help some drivers save hundreds of pounds.

Buy in advance

Don’t leave sorting out your insurance until the last minute. Buying it a few weeks before you need to can cut the cost significantly, says Matt Oliver, a car insurance spokesman at price comparison site Gocompare.com.

It found that buying cover 30 days in advance could be £103 cheaper than buying the day before (based on a 35-year-old accountant living in south London and driving a 2013 1.6L BMW 1 Series). Why? Because some insurers may view people who buy ahead of time as more risk-averse and therefore less likely to take a chance behind the wheel.

Join the black box revolution

Younger drivers in particular can cut their costs by opting for a so-called telematics-based policy. Your insurer will install a small device, typically the size of a smartphone, in your car – usually behind the dashboard – and/or it will ask you to use a mobile app. The device will use GPS technology to transmit data about your driving habits back to your insurer.

Earlier this year the British Insurance Brokers’ Association said these policies can result in savings of more than £1,000 for some young drivers. There are a growing number of insurers selling black box policies, including big brands such as Aviva, Admiral, Direct Line, Tesco and Co-op Insurance, alongside specialist names such as Ingenie and Insurethebox.

Don’t pimp your ride

“Insurers don’t like modified cars,” says Ian Crowder, an insurance expert at the AA. Even go faster stripes could push up the cost.

Earlier this year, website Moneysupermarket analysed information on 2.3m modified vehicles and produced a price guide to show the effect that each type of modification has on the cost insurance. It found that at one end of the spectrum, turbo/supercharging your car could result in a 132% increase, while at the other, fitting alloy wheels could push up what you pay by “only” 8%, despite the fact that they are very pinchable. Tinted windows and wider wheels, meanwhile, will typically increase the price by 16% and 18% respectively.

Some people might be surprised to learn that specialist paintwork is considered a higher risk as it can result in a 36% premium increase, while stripes and car body stickers etc can push up the cost by 22%.

Get a tow bar fitted

Moneysupermarket’s research also claims that having a tow bar could reduce your premium by 20% – presumably because the assumption is that you are probably not a boy racer and will be spending a fair bit of time driving at a moderate pace.

Think about your occupation

While it is crucial that you are accurate and honest about what you do for a living, you will usually have to select one of the pre-defined titles insurers have on their system, says Oliver. For some there may be more than one job title that accurately describes what they do. “For instance, if you work in education there may be a range of titles that describe your job, like ‘teacher’ or ‘music teacher’ – but Gocompare found a difference in car insurance costs of around £35 between the two.”

Other occupations where this is common include journalism, office work, healthcare, construction and catering. Many journalists argue that insurers seem to think they spend their time whizzing around in their car in pursuit of criminals and emergency service vehicles when, in reality, they hardly ever get out of the office.

Oliver also says that if you are retired or a homemaker/housewife/househusband, select one of those options and not just say that you are unemployed, as the latter can face substantially higher insurance costs.

Add a named driver

It might sound bizarre, but this can help, says the AA’s Crowder. When there is more than one driver you tend to find that the claims experience is a bit lower.

“Fronting”, where a parent or older person pretends they are the main user of a car when a younger person is driving it on a regular basis, is illegal. However, adding another person such as a spouse or parent to your policy as a named driver could reduce the premium by hundreds of pounds.

If you’re young, go for a low insurance group car

Crowder says that car buying website Parkers has a useful tool that lets you find out which insurance group your car sits in.

The goups range from one to 50, with one being the cheapest and 50 the most expensive. It might not be as cool as a super powerful Vauxhall VXR8 (which is in group 50), but a 1L Vauxhall Corsa (many of which are in group one, two or three) will be a lot cheaper to insure.

Be accurate with your mileage

“It’s common for people to overestimate their mileage, and by doing so they’re potentially paying over the odds,” says Gocompare.com. It found that the difference between driving 10,000 miles and 9,000 miles a year can be as much as £36, depending on your circumstances.

Park your car off-road

… if you can. If you are parked in the road you are more likely to be clipped by passing vehicles or on the receiving end of random acts of vandalism, particularly if you live in an area with pubs and clubs, says Crowder.

You don’t have to have your own garage or drive – it could be someone else’s drive or a piece of private land.

Shop around

This really is the best way to cut costs. It’s definitely worth spending a few minutes on the price comparison and insurer websites. But make sure the policy covers everything you need. Remember, by paying a higher excess you may be able to get a reduced premium. Try three or four excesses and see what this does to the price.

Cover campaign

Every three days someone is involved in an accident with an uninsured or “hit and run” driver that will ultimately lead to a fatality, it was revealed this week. The figures were issued by the Motor Insurers’ Bureau (MIB), a not-for-profit body campaigning to improve awareness that car insurance is a legal requirement.

MIB settles about 25,000 claims a year and, on average, 120 relate to an accident where someone has died at the hands of a driver who either had no insurance or fled the scene. The organisation’s campaign is called Gone in Seconds, and this week it launched a short film on this issue – go to Goneinseconds.org.uk


Rupert Jones

The GuardianTramp

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