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Your back-to-basics car insurance guide

A car key electronically opening a carThere are a number of factors car insurers take into account when calculating your motor insurance premium. These are known as rating factors. We explain.

The type of car you have

The more expensive your car is, the more it costs to replace if written off or stolen, so this will result in a higher premium.

Similarly, the performance of a car is also a factor as bigger and faster vehicles cost more to insure. If you’re looking to cut the cost of motor cover, choose a car with a smaller engine or one that falls into a lower insurance group.

How you intend to use it

If you use your car for commuting or business use, it’s a possibility that you’ll pay more for your policy as you’ll be on the road at the busiest times.

The location you live in

If you live in an area with a high level of vehicle crime your car is more at risk so your premium will be higher. Similarly, if you live in an area where insurers think the risk of accidents is greater, for example, if you live on a busy road, you could end up paying more.

Your age and driving history

Statistics show that young drivers are more likely to be involved in accidents and to make claims than other age groups. That’s why younger drivers face higher premiums. Statistics show that women are less of a risk than men, hence lower premiums for female drivers.

However, a ban on using gender when calculating insurance premiums is due to come into effect in December 2012. Many industry experts think that this will lead to women’s insurance costs rising substantially, while men’s costs could fall, although by a smaller proportion.

The above represent the “fixed” factors, the ones you can’t change very easily, but there are other factors you can change that can result in cheaper premiums.

Voluntary excess

Consider a higher voluntary excess to cut your annual premium. This is an amount you choose to pay in the event of a claim. In return for opting for a higher excess, the insurance provider will usually lower the premium.

Will Thomas, head of car insurance at, says voluntary excess is one of the biggest factors within your control when it comes to cutting your car insurance premium.

He said: “Some motorists could save hundreds of pounds just by playing around with the voluntary excess.

“Of course, it’s important to remember that the voluntary excess will always be paid in addition to any compulsory excess.”


What you do for a living can affect the premium you pay. This is because insurers work on the basis that certain jobs carry a greater risk of claims. This is called a ‘moral hazard’.

Normally, when shopping around for car insurance you’ll be faced with a list of occupations. There’s bound to be more than just one job title that describes what you do. Choose a few job titles and see how this affects the premium you’re offered.

I put this to the test myself. I’m a reporter for Classifying myself as a writer returned me a premium of £571. But I also work in the marketing department of So I changed my job to “marketing – non travelling”, all of which is true. This returned a premium of £559. 

However, do not be tempted to lie as this could be considered as fraud and if you come to make a claim and your insurer finds out that your occupation differs wildly from what you’ve listed, it can refuse to pay out.

Will Thomas says: “It’s better not to be ambiguous about your occupation when shopping around for car insurance, as this may result in higher premiums. So don’t choose manager, for example, as this could mean any number of jobs. Opt for a more accurate description.”


Many people overestimate their mileage but this can result in a higher premium as from an insurer’s point of view, the more you’re on the road, the more risk you run of an accident.

So it pays to spend a little time trying to estimate as best you can how many miles you’re likely to drive each year. But bear in mind that knowingly underestimating your mileage could invalidate your insurance policy when it comes to making a claim.

If you’re not sure how much you drive, look back at you last two MOT documents which will show you how many miles per year you drive.

Getting a quote? Get your paperwork in hand

If you haven’t bought the car but are shopping around for quotes, you’ll need to know the make, model and year of the car. If you’ve bought the car, you’ll need this plus the registration number.

In all cases, you’ll also need details of any security features such as immobilisers, details of any convictions, such as points on your licence for speeding. You’ll need the dates and codes of any conviction. You should find this on the paper part of your licence.

You’ll also need details of any modifications including alloys, modified suspension, window tinting.

And don’t forget any details of any no claims bonus you may have. Find out more about the latest car insurance price rises.


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Naphtalia Loderick

Naphtalia Loderick

Naphtalia Loderick covers all things consumer for She started out on a weekly newspaper, via a national news agency and a stint in the fun but ‘not as glamorous as it appears on screen’ world of TV at the BBC researching consumer films for The One Show.

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