How to drive down cost of motor insurance

Harvey Jones 

The cost of insuring your car is accelerating again, and at a much faster pace than inflation. The good news is that there is plenty you can do to drive the cost back down.

The average premium for comprehensive motor cover is now £462 a year, up almost 10 per cent in a year, according to the Association of British Insurers.

Increases to insurance premium tax, increased repair bills and the rising cost of whiplash injury claims are to blame. Here's how to find the best value deals out there. 


Shop around

Insurers attract new customers with loss leading premiums in the first year, then profit by steadily raising them.

Instead of auto-renewing every year, beat them at their own game by shopping around on a comparison site. Don’t just go for the lowest premium, make sure you are comparing like with like, and getting all the cover you need.

Read more: Which insurance group is my car?


Pay upfront

Pay your full year's premium upfront if you can afford to do so.

If you pay monthly instalments many insurers will treat this as a loan, and charge you a hefty APR of 20 per cent or more, adding more than £80 to the cost.

Read more: Car insurance tips for over 50s


Protect your motor

Fitting extra security measures such as an alarm, immobiliser or anti-theft tracker will reduce the risk of your car being stolen, and can cut your premiums by up to 10 per cent.


Reveal all

If you park the car off road at night, say in a garage or on your driveway, make sure you declare this on your policy, as this reduces the risks of bumps and scrapes.

Also, make sure your insurer has an accurate estimate of your annual mileage because it uses this figure to set your premiums. Do not underestimate your mileage, or it could jeopardise any claim.


Get a discount

Some insurers will give you no-claims discounts worth up to 70 per cent off your premiums.

It may be wise to pay for minor damage from your own pocket or protect your discount for a small extra premium.


Avoid modifications

Think twice before turbo-charging your engine or pimping your ride with new alloy wheels, sports seats, spoilers or body kits.

Insurers will consider you a higher-risk driver, while theft risk may also increase. If unsure what is classed as a modification, speak to your insurer.


The name game

Limit the number of named drivers to those who actually use the car. You can always add someone for a few days if you need to.


Increase your excess

The excess is the part of any claim you have yourself. Increasing your voluntary excess will reduce your premiums, just make sure you can afford to pay it in the event of a claim.


Try telematics

Young motorists can pay thousands of pounds for cover, pricing many off the roads. They should consider a telematics policy, which involves fitting a black box into your car to measure braking, cornering and acceleration, and what time of day you typically drive.

Safer motorists should be rewarded with lower premiums.


Read more from Harvey Jones

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