02 June 2010 by Parkers Team

  • Ten top tips on how you could save money on car insurance
  • From clever comparisons to adding a named driver or two

 

It is tempting just to stick with your existing insurance company when it's time to renew your cover - there's no hassle and well, better the devil you know...

But switching your insurance could save you hundreds of pounds and it doesn't have to be that taxing. Set aside a lunch hour to get a better deal.

Here's ten top tips to help you get cheaper car insurance: 

1 Clever comparison
 

Don’t waste your time by randomly phoning insurance companies. Without some background research into how competitive they are, you’ll greatly reduce your chance of getting the best deal.
 
Use online comparison sites such as Parker’s Compare, confused.com and gocompare.com to see who are going to be among the cheapest companies for you – it varies from person to person.

Use at least three to get a feel for the market (different companies are signed up to different comparison sites) and then, once you’re happy with the results, take the top four or five results and hit the phones to push the price down even further.
 
But before you get to the phoning stage, there are already a few tricks you can try to shave a few more pounds off…

 
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2 Buying new? See what the dealer can offer
 

This trick works best for younger drivers who pay large insurance premiums. Older drivers with many years no-claims bonus have less to gain.
 
Car makers will often offer free insurance as an incentive to buy a car but there’s usually a catch – you’ll have to take out the manufacturer’s finance and that's likely to be more expensive than getting a loan from a bank. So compare how much the total repayment of the loan is with a bank or building society with the dealer’s. Parker’s finance comparator is a good place to start.
 
Then find out how much the premium is for the car you’re interested in. If the dealer’s finance is competitive go for it – the insurance is genuinely free. Otherwise you’re better off with a lower cost loan and arranging the insurance separately.
 
You also have to consider whether the car is any good by checking reviews and whether it suits your needs.
 
Check out what offers – including free insurance – are currently available in Parker’s Manufacturer Promotions round-up

 
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3 Don’t forget the basics
 

You can reduce the risk to to your insurer which in turn reduces the amount you pay them.

Tell the insurer of any security devices fitted, even if it’s a steering wheel lock. Mention if the car is garaged or securely parked overnight.

Inform the insurance company if you are a low mileage driver adn if you want to to reduce the premium even further go for a larger voluntary excess, though it does leave you with more to pay in the event of a claim.

Build up your no-claims discount. It takes a few years of incident-free driving, but lower premiums make it all worthwhile.

Driving a more insurance-friendly car helps lower premiums. If you can live with a less glamorous model, it will be cheaper to insure

Take extra driver training: younger drivers who do the Pass Plus exam can save up to 30% on premiums.

 
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4 Play the job title name game
 

Be more precise about what you do to get a larger discount on your premium. 

Be honest, though: this trick is about finding a better way to describe your job – not lying about what you do. Insurance companies need an accurate description of what you do, but there are often several ways to describe the same job.

You need to ask yourself whether someone could reasonably describe it as your job. Putting electrician if you work in a supermarket is illegal and will invalidate your insurance but we round that using the word 'reporter' means a cheaper premium than if the policy holder is described as a journalist.
 

 
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5 Add a named driver… or two
 

Adding family members as named drivers onto your insurance can reduce the premiums, especially if they have an unblemished driving history, have a few years driving experience and are female.
 
You should always try it, even if the named driver rarely (or even at all) uses the car.
 
The reason it works is that insurers see the risk as being lower as it’s spread across a number of drivers. Lower risk = cheaper premiums.
 
This is different to ‘fronting’ – where the main driver is listed as only a named driver to save money – which is illegal. Typically this happens when young men are insured on their mum or dad’s car.

Many people think the savings are worth the risk, but insurance companies look for any reason to avoid paying a claim and could investigate you after an accident or theft.

That means the cover could be invalid and you’ll have to cover all costs yourself. It will also make getting insurance more difficult (and expensive) in future.

 
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6 Added extras mean added cost
 

Every insurance company will try to add little extras – usually just before you pay. It’s an easy way for them to wring as much money from you before you hand over your credit card details. They’re the insurance equivalent of sweets at the supermarket checkout: impulse buys to tempt you.

 
There isn’t necessarily anything wrong with these extras, as long as you definitely need them and know how much you should be paying. For example, if you’re adding breakdown cover, see how much it’s being offered for by the AA, RAC or Green Flag. If you can get it cheaper elsewhere, then do. Insurance companies rely on you not doing your homework and – as you might be getting a good deal on the cover itself – assuming that the extras are similarly good value.
 
If you’re filling in an online form, be especially vigilant: some are automatically added to your policy and it’s up to you to opt out.

 
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7 Paying monthly? Don’t get caught out
 

Many of us prefer to pay in instalments, rather than as one annual lump sum. But some (although not all) insurance companies see this as an opportunity to charge extra. They effectively loan you money that you would have spent on an annual policy and charge you interest. The total cost of monthly payments will be more than that of an annual premium.
 
Always double check to see what the yearly cost is compared to monthly instalments. If the cheapest quote charges more to pay monthly, why not pay for an annual policy with a credit card that has 0% APR on new purchases. You can then pay it off in interest-free monthly instalments. Just make sure you do: the interest payments will be high when the 0% period comes to an end and it becomes a very expensive way of borrowing money

Our research revealed that one insurance company was charging the equivalent of 59% APR for monthly instalments.

 
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8 Go direct to the insurer’s site to save more
 

Insurance aggregators make a number of assumptions about you. Take the top results from the aggregators and then go direct to the insurer’s site.

Here you’ll be able to tweak the results and push down the cost even further. If you save your search, make a note of any reference numbers.

If you phone, these can be retrieved at the call centre, saving you time.

 
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9 Choose the right time to phone
 

If you’re prepared to haggle, there are savings to be had by phoning the company. There are often big margins and room for insurance company to come down in price to win your business. Aim to knock-off at least 2-5%. If the company insists they can’t budge on price, try another.

The best time to call is in the evening and at the end of month because companies need to reach their targets. Sometimes they'll be prepared to do a one-off deal for you.

 
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10 Be savvy when it comes to payment
 

You can save even more money by buying your cheapest quoted policy through a cashback website. Make a note of your best quote and then visit a cashback website to purchase it. The cashback websites will have most of the big name insurance companies and you can get back up to £30-£50 when you buy through these sites.
 
If you have one, pay with a cashback credit card. A card that gives 2% cashback means you will save £10 on a £500 insurance bill – a useful extra saving.
 
Don’t forget to use your loyalty card if you’re insuring through one of the big supermarkets. Insuring two cars for £400 and £600 can earn you Tesco voucherss which can be used on other motoring services such as breakdown cover and money off at car supermarkets).

 
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