Car insurance is big business, which means there are a lot of companies out there looking to charge complacent customers over-priced policies.
But for the savvy consumer, a little bit of research can yield some generous savings on your next quote.
Here are the steps for finding cheap car insurance:
Step One – Establish a Baseline
This will normally be the price that you paid for your last insurance premium. Having a baseline provides you with a good starting point for judging how much money you are going to save. If you do not currently have a car insurance policy, then just use the first quote you receive as your baseline.
Step Two – Run a Search on Comparison Websites
Comparison websites make their money by taking your details and running them through the websites of insurance providers, presenting you back with a series of quotes in price order. They will receive a commission if you then proceed to purchase the policy.
The benefit is that it saves you having to phone up or enter your details into a number of different websites – the comparison site effectively does the legwork for you.
So whether you prefer meerkats, cartoon characters pulling their hair out or very loud sopranos popping up in strange places; the main insurance comparison websites will give you good coverage of the UK insurance market.
Here are the main comparison sites:
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Step Three – Compare Your Best Quote Against Direct-Contact Insurers
Many insurance companies prefer to opt-out of comparison websites and deal directly with the customer. They tend to advertise different incentives to draw customers in and have the potential to be cheaper on the grounds that they do not pay out any commissions to third parties.
Two well known insurers are Aviva and Direct Line, but it is worth doing your own google search to find others.
Step Four – Check for Cashback and Other Deals Against Your Shortlist
Once you have a shortlist of quotes, run a couple of google searches to see if any deals are being advertised on cashback sites or similar.
The best way to do this is to search with terms like:
- (insert name of insurance company) cashback car insurance
- (insert name of insurance company) car insurance deals
- (insert name of insurance company) car insurance offers
Step Five – Verify the Best Quote and Buy
Check the best quote you have received against your requirements, such as:
- Third Party or Fully Comprehensive
- Hire car rental in case of an accident
- Coverage of named drivers
- Annual mileage
- Occupation
- Clauses around limited use
- Excess level
You may want to phone the insurer directly, but feel free to also use this call to try and haggle the price down further.
More Tips on Reducing Your Car Insurance Costs
Type of Car
An obvious point – In general, insurance companies tend to prefer standard, mid-range cars from manufacturers recognised for providing good levels of safety and security; compared to anything too specialist, high performance or modified.
Driving Style
The way people drive also impacts insurance costs. Conscientious drivers are less likely to be involved in accidents or receive penalty points, so the less time spent tail-gating and the more time spent building up the no-claims bonus, the better!
Mileage Reduction
If you are able to reduce your average mileage by walking or cycling to work, you will not only reduce your insurance cost, but also the cost of running your car and gain the health benefits.
Avoid Annual Renewals
Insurance companies spend significant sums on deals and discounts to acquire new customers, however they are less interested in providing the same level of care to their existing customers, especially as the majority are too complacent to spend a couple of hours each year trying to find a better deal.
Those willing to look around however, could save as much as 35% on their premium (figure from Association of British Insurers).
Pay Annually, Not Monthly
Paying monthly for your insurance rarely works out cheaper, as you end up covering the cost of monthly credit and direct debit charges. If you can, pay the premium as a lump sum and then start saving on a monthly basis, so that you can cover the premium the next year.
Excess
Drivers can reduce their insurance premiums by accepting a higher excess, which they must cover in the event of an accident. This is a great way to save money, but ensure you begin saving the excess amount into your emergency fund!
