Car Insurance - How to lower your premiums

Car insurance is a major cost for motorists – so it makes sense to cut the costs wherever possible. Michael Challiner tells you how...

During the last few years, the average car insurance premium has virtually been at a stand still. The reason is price competition. There are now over 100 car insurance companies fighting for your business and competition is fierce. There are always bargains to be found as companies cut their premiums to attract motorists in the hope you’ll remain loyal and stick with them in following years. Indeed, every year, 23% of us renew our motor insurance with our existing insurer.

But in recent years the Internet has created a revolution in the marketing of car insurance. It makes shopping around so easy without the need to make loads of phone calls and without spending time threading yourself through the automated phone systems beloved by so many call centres.

But you’d be wise to remember that the lowest premium is not always the best. For example, some insurers have recently pushed up the level of claims excess they want you to pay as this helps them provide you with a much lower quote. You should also check out whether a courtesy car is provided if your car is in for repair. You might also feel you want legal insurance cover and automatic windscreen replacement. An accident helpline can also very useful in the middle of an emergency! You’ll need to phone the broker or insurance company you’re thinking of dealing with in order to check out these points.

Top Tips for cheaper car insurance

* Get your online quotes through car insurance brokers. Their computer systems will search for the best quotes from 40 or more car insurers and save you lots of time. When you’ve got their cheapest quote, phone them to discuss the relative merits of the cheapest quotes they found.

* Garage your car at night. Insurance companies know that a car left on the road at night is much more vulnerable to theft and damage. If you don’t have a garage, if possible keep it on your drive.

* Update the estimate of your mileage each year. If you’ve moved home or changed your job you may have shorter commuting journeys. If so, your premiums should be less.

* Your premium can be influenced by your job. Landlords, journalists, and professional footballers to name but a few, all pay more! Go for a job that’s a bit more boring! Accountants and civil servants pay less!

* Getting married could save money on your car insurance, particularly if you’re male and under 30.

* If you’re under 25, add an older experienced driver with a good riving record onto your policy as a named driver. But don’t let him be too old! – premiums start rising again after age 60!

* Consider paying a higher accident excess. The average excess is about £100. If you are prepared to increase you claims excess, your premium will fall significantly.

* If you have cheap or old car, consider buying just 3rd Party cover. Get quotes for 3rd Party and comprehensive insurance and weigh up the savings.

* Are you aged between 18 and 21? Then consider pay as you go insurance. Norwich Union has recently introduced the first pay as you go insurance policy, which charges you exactly for the miles you drive. It also charges more for the miles you drive between 11 and 6 at night. The system works through a Global Positioning System which is fitted to your car for a one off fee. The GPS black box tells Norwich Union how many miles the car’s been driven and they send you an monthly invoice.

* A new driver? Spruce up your driving technique by taking some more driving lessons. New drivers can slash their insurance costs by as much as 35% by taking Pass Plus lessons. These give you extra training for driving in rush hour traffic, motorway driving and night driving. Lessons cost between £15 and £30 per hour.. You can also reduce your premium if you've taken a course with the Institute of Advanced Motorists.

* Buying a new car? Then check out the insurance group before you buy. Cars fall into one of 20 insurance groups with 1 being the cheapest and 20 the most expensive. If the proposed insurance premium is too high, chose a car that’s in a lower group.

* High spec and performance cars attract thieves and are more expensive to repair - so they always cost more to insure. Consider something with a little less voroom!

* It’s hard we know, but try hard not to speed! Most insurance companies will ignore one fixed penalty fine but get more and your premium will rise.

* Got 4 or more years no claims discount? Pay the extra get the discount protected.

* Fit a satellite navigation system. Some insurance companies have noticed that sat nav cuts the accident rate by letting drivers concentrate on the road. Insurers will soon be giving discounts if you have it fitted.

* Get a engine immobiliser or alarm fitted. It could save you between 5-8%.

* Got more than one car in the home? Some insurers will give a discount for insuring them all in one policy.

Michael Challiner writes for Brokers Online who offer Life Insurance and most UK financial services including Cheap Car Insurance. Visit our Family Finance blog for useful tips on uk finance.

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