The price of car insurance is rising but there are ways you can cut the cost. Read our tips and you could be quids in.
You’ve probably heard that car insurance is getting more pricey. In fact, car insurance premiums have risen on average by £220 in the past 12 months.
Information taken from the official Confused.com/Towers Watson Car Insurance Price Index shows that the average comprehensive car insurance premium has risen from £615 to £835 between 1 April 2010 and 31March 2011 – an annual rise of £220 or 60p a day.
So it’s well worth comparing deals to make sure you’re getting the best deal. And there are other ways you can cut the cost of car cover.
Avoid small claims
If you’ve got cover and your car is damaged, it makes sense to make a claim right? Wrong. Making low value claims will only serve to drive the price of your premium higher when it comes to renewal time, so you should weigh up the cost of the claim versus the potential impact on your policy cost.
So make sure you tuck in your wing mirrors when your car is parked up, for example. It’s as simple as pushing them in when you exit the car. And if you’ve got electric wing mirrors, all you have to do is push the button.
Gareth Kloet, head of car insurance at Confused.com, says: “Having to replaced damaged wing mirrors costs around £200.
“If you don’t claim then you’re out of pocket now, if you do make this low-value claim you’ll be out of pocket come renewal time as it will push up the cost of your cover. So it pays to make just a bit more effort so your car isn’t damaged."
Pay for your cover in one go
While paying your car insurance in monthly installments may be more manageable, your premium will actually cost less if you pay for your annual cover in one lump sum.
This is because insurers effectively give you a discount for paying upfront. If you don’t have the money to hand, it’s worth shopping around for a credit card with at least a 12 month interest-free period.
Tesco’s Clubcard charges no interest on purchases for the first 15 months, after which the rate reverts to 16.9 per cent.
Natwest is offering its existing customers a 13-month interest-free deal which reverts to 17.9 per cent at the end of this period and Sainsbury’s has a 12-month 0 per cent deal which reverts to 15.9 per cent.
Higher excess, lower premium
Adjust your voluntary excess. 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. But don’t forget that the voluntary excess will always be paid in addition to any compulsory excess.
Check your mileage
Mileage is one of the rating factors that insurance providers use to calculate a person’s premium. It’s therefore always best to work out, as best you can, the amount of miles your likely to be driving in a year and make sure you're not over estimating how much you use your car.
Value your vehicle accurately
Estimate as best as you can the value of your vehicle as it’s incorrect to assume the higher you value your car the more money you’ll receive in the event of a claim. Insurance providers will only pay out the current market value of the vehicle so inflating the value of your vehicle serves no purpose other than increasing your car insurance premium.
To calculate your estimated car insurance costs try our handy car insurance price index calculator where in seconds you can get the average car insurance costs by age, sex, and region.
Please watch our 30-second guide for more information.
