How long have you had car insurance with the same company?
If the answer is more than a year, then you could be paying well over the odds for your car insurance.
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 £££s off…
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 nearly always a catch – you’ll have to take out the manufacturer’s finance. It’s nearly always 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 insurance usually is for the car you’re interested in. If the dealer’s finance is competitive, then 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
Give yourself the best chance of saving money by telling the insurance company of how you can reduce the risk to them (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.
Low mileage driver? Opting for a larger voluntary excess can help reduce the premium, 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. Did you know? Younger drivers can sit a Pass Plus exam, which offers more advanced driver training and can save as much as 30% on insurance premiums.
Be more precise about what you do for even bigger savings - you’ll be surprised at what's on offer. But be honest. 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 the word reporter is an acceptable alternative to journalist and makes a difference to your premium. Did you know? Parker’s saved around £7 by putting its occupation as a reporter rather than a journalist.
Adding family members as named drivers onto your insurance can actually reduce the premiums, especially if they have an unblemished driving history, have a few years driving experience and are (sorry chaps) 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.
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 check-out: 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. Did you know? One company wanted to charge Parker’s £82 for breakdown cover. Parker’s was able to get a similar policy from AA/RAC for under £37.
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. Did you know? Parker’s recent insurance research showed that one insurance company was charging the equivalent of 59% APR for monthly instalments.
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 retrieved at the call centre, saving you time.
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 per cent. If the company insists they can’t budge on price, try another. Did you know? The best time to call is in the evening and at the end of the month as companies try to reach their targets. They’ll often do a ‘one-off’ deal for you.
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 per cent 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 will earn you £10 in Tesco Clubcard vouchers or £40 in Tesco deals vouchers (which can be used on motoring services such as breakdown cover and money off at car supermarkets). It’s hardly an incentive in its own right, but worth making the most of if you’re taking out insurance anyway.
