The average cost of car insurance is now £586 a year, according to the Confused.com car insurance price index.
With the cost of living continuing to rise, that can often be a difficult chunk of money to pay. Thankfully though your car insurance bill can bean easy one to cut - if you know how.
1. Don't accept your renewal price - compare quotes
Insurers can no longer charge a loyal customer any more than a new customer for a like-for-like policy. This new insurance regulation came into force on 1 January 2022.
This might make you think your insurance price won't go up at your renewal. Unfortunately this may not be the case.
Many factors affect the price of car insurance. In the last year, the cost of car insurance has risen by £36.
But even if your quote hasn't gone up, it's always worth shopping around to see if you could save on your car insurance.
You might be able to find a similar policy with another provider and slash your costs in minutes just by comparing car insurance quotes.
And lucky for you, that's something we're quite good at.
Compare car insurance quotes
Remember, if you find a cheaper deal and decide to switch your insurance provider before your renewal date, you might have to pay a fee for cancelling your car insurance.
2. Pay for your car insurance annually
Paying for your insurance annually (rather than monthly) is one way to get cheaper car insurance.
Paying for your car insurance policy in monthly instalments might help you budget, but you pay more for the convenience.
That’s because insurance companies always charge interest for spreading the cost of your cover over the year.
If you can't afford to pay for your car insurance upfront, one way to make it more manageable is to use a credit card with 0% interest on purchases. That way you still get the benefit of budgeting monthly, without added charges on top.
It's important you pay off your balance before the 0% runs out though, otherwise credit card charges will wipe out your savings.
3. Be accurate with your mileage
It’s worth thinking about how much you use your car, and give an accurate mileage if you want cheaper car insurance.
Generally, the more miles you drive, the more likely you are to have an accident and make a claim. This means the higher your mileage, the more you pay for your car insurance.
So, driving fewer miles, or not putting more than you need, can be a great way to save money on your car insurance policy.
But don’t assume that a rock-bottom mileage means rock-bottom prices. If you barely drive at all, your insurance company could see that as a risk as well.
The trick is not under- or over-estimating your mileage. Check the clock and get the real figure. You could even compare your last 2 MOT reports for a rough idea of how many miles you drive each year.
4. Don't miss your renewal date and get stuck in another policy
If you miss your renewal date, you could get stuck paying for a more expensive car insurance policy when your old one auto renews. But if you're quick, you could still get out of the deal. By law car insurers have to give you a 14 day cooling-off period during which you can cancel your car insurance without penalty.
5. Enhance your car security
The harder it is to steal your car, the less of a risk it is. This usually means cheaper car insurance.
There are several ways you could improve your car security including:
Installing a Thatcham-approved car alarm or immobiliser. Most cars made after 1997 have an engine immobiliser and alarm fitted as standard.
Adding secondary levels of security like a steering lock.
Parking in a secure, well-lit car park.
Considering a tracker device to recover your car if it’s stolen.
6. Consider a telematics or black box policy
A telematics (black box) policy calculates your insurance costs based on how, when and how much you drive.
There could be some restrictions on how you use your car with a black box, though. For example, driving curfews or mileage caps. But if you drive safely and responsibly and avoid late-night driving, you may get cheaper car insurance prices.
7. Consider how you use your car
Make sure your policy reflects the way you use your car.
If you're only using it to drive to the shops, you don't need a policy that covers commuting. Likewise, if you start using your car to make deliveries on the weekend, you might need car insurance that includes business use.
What class of use you go for could have an impact on the price you pay. But it's important to be honest about how you use your car, otherwise your may find that any claim is rejected.
If you only need to drive your car occasionally, you might want to think about temporary car insurance. You can insure your car from anything from an hour to 28 days and it's quick to arrange.
8. Watch out for extras you don't need
If you want cheaper car insurance, think carefully before adding on any add-ons like:
You may even get some of these add-ons as part of another policy, or with your bank, for example.
9. Check if it's cheaper to buy add-ons and extras as separate products
If you do need extras like breakdown cover, always check whether you can buy them separately as standalone products.
You might be able to get more comprehensive cover and pay less overall. But always check the terms of all the policies you are considering before you buy them.
10. Look for rewards and incentives
In addition to finding cheaper car insurance, also keep any eye out for rewards and incentives when you buy a policy. For example, if you buy a car, van or home insurance policy with Confused.com you can pick 1 of 4 rewards.*
11. Consider your cover type
Some people assume that your car insurance will be cheaper if you go for a third-party, fire and theft policy rather than fully comprehensive car insurance.
This isn't always true,. In fact third-party insurance can often be more expensive. This is because higher risk drivers often go for this level of cover, assuming it's the cheapest option, without shopping around and comparing their options.
12. Increase your voluntary excess
Your car insurance excess is what you'd have to pay out if you made a claim.
You can’t change your compulsory excess, but you can change your voluntary excess. This can help you get cheaper car insurance, but you need to make sure you can afford to pay it, if you need to claim.
13. Check your job title
Your job affects your lifestyle, which affects how you drive. Even if you don't drive as part of your job, it could still have an impact.
An office worker, for example, might only drive their car to work and back on the 9-5 commute. But someone who does security at a nightclub might drive in a busy city centre at unsociable hours.
From an insurer's point of view, the office worker is much less likely to claim on their car insurance, than the security guard who drives late at night or in the early hours.
There are also many ways to describe the same job, and different insurance companies might use slight variations of similar job titles.
This means your price could change depending on the specific job title you use. So it’s worth looking at the most relevant variations to see how it could impact your price.
Always make sure the job title you choose is an accurate reflection of the work you do though. Claim to do a different job and you may find your claim isn't paid.
14. Think about your named drivers
Sometimes, adding a named driver to your policy could help you get cheaper car insurance. This is most likely if your named driver is older and has more driving experience.
Adding several younger, inexperienced drivers could have the opposite effect though. This is because they're higher risk and more likely to be involved in an accident.
If you've got a friend of family member on your policy and they don't drive your car, consider removing them. If they only need to use your car for a few days or hours at a time, they could get temporary car insurance instead.
15. Downsize or change your car
The kind of car you drive has a big impact on the cost of your car insurance. This is down to a few factors:
- How much your car is worth
- What car insurance group it belongs to
- Whether the car is a luxury or a performance model
- The engine size
More expensive cars are normally more desirable to thieves. And the more powerful it is, the more damage it will likely cause in an accident.
The general rule is the bigger and more expensive a car is, the higher your insurance costs tend to be.
If you want cheaper car insurance, do your research and find a model that meets your needs in the lowest insurance group possible.
16. Obey the law
Having a motoring conviction and points on your licence make you a bigger risk to insurers. So keep your licence clean if you want to get cheaper car insurance.
The DLVA keeps most points on your licence for 4 years. But insurance companies keep them on their records for 5 years.
And if you have more serious convictions such as drink-driving and driving without insurance, you could see that your options for cover are more restricted.
Remember that you must declare all active motoring convictions to your insurance company when you get your policy. If you don’t your policy may not pay out if you claim.
17. Build and protect your no-claims bonus
Every year you go without making a claim on your car insurance boosts your no-claims bonus.
The more bonus you gain, the bigger a discount you get when you buy your car insurance.
Every time you make a claim, your no-claims bonus gets reduced, usually by 2 years. Then you get the double whammy of having a claim on your policy as well as the lack of no-claims bonus to raise your insurance costs.
So, it pays to be careful and not take risks when driving to reduce the risk of making a claim. You may also want to think carefully before making small claims that you could afford to pay yourself.
Another option you have is to get protected no-claims bonus. This is an add-on to your policy that allows you to make a certain number of claims without your no-claims bonus being affected. This comes at an extra cost, though.
18. Park securely or off road if you can
If you park your car on the road it's at a much greater risk of theft. This means that wherever possible you should park it off road - in a garage or on the driveway. When you're away from home always go for secure and well-lit car parks.
19. Never leave it until the last minute
If you want to find cheaper car insurance, you need to be organised.
You should get your renewal letter from your current insurance company around 3 weeks before the renewal date.
The letter should tell you what you paid for your car insurance last year, as well as what your policy will cost this year.
When is the best time to buy car insurance? Generally, the closer you get to your renewal date, the more expensive other quotes could become.
So act quickly. As soon as you get that renewal letter, shop around and compare quotes with the renewal price from your current insurer.
It only takes 5 minutes, but could save you hundreds of pounds.
20. Take an advanced driving course
The more driving experience you have, the less likely you are to make a claim. So, if you've just passed your test, it could be worth considering a Pass Plus course to get enhance your driving skills.
Pass Plus courses give you practice and confidence when driving in a number of riskier situations including:
Driving at night
Driving on the motorway
Driving in adverse weather conditions.
It's not guaranteed to reduce your insurance costs, but it may help insurers view you as lower risk than other new drivers. At the very least, these courses are designed to make you a better driver, which reduces your risk of making a claim.
21. Pay attention to administration charges
If you’re making changes to your policy as part of your renewal or comparing quotes, you shouldn’t need to worry about admin charges.
But if you need to cancel your car insurance or change your policy mid-term, you might wind up paying extra in admin fees.
Get in touch with your insurance company and ask about what changes they charge for. Although you must keep your insurer up-to-date about any changes that could affect the policy, you could lump multiple changes into one and only pay 1 admin charge.
22. If you've more than 1 car, consider a multi-car policy
If there's more than 1 car in your household, it could save you money insuring them under one, multi-car insurance policy.
In addition to making your car insurance cheaper, it could also be less hassle having one policy and one renewal to deal with each year.
As a general rule the more cars you have at your address, the more you stand to save. But savings aren't guaranteed though, so it's always a good idea to compare the costs of insuring your cars separately and with a multi-car policy.