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How to get cheap car insurance: our tips for a cheaper car insurance premium

Paying for car insurance is no small chunk of change. According to Confused.com's car insurance price index, the average cost of a comprehensive car insurance policy is £550. Your car insurance premium (the price you pay for the policy) depends on several factors. And different insurers work things out in their own way. So, it can be confusing to know what you can do to get low car insurance costs. Let us share our secrets with you. 

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Switch your car insurance provider and get a better deal

Now, insurers can't 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 lead you to believe that your insurance price won't go up at renewal, or could even be cheaper. Unfortunately this may not be the case.

Many factors affect the price of insurance, and in the last 12 months, car insurance has risen by £12. That's according to our car insurance price index, powered by Willis Towers Watson.

So, even if your car insurance renewal price isn't that much different from last year, it's worth taking a look elsewhere.

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.

 

Pay for your car insurance annually

Where you can, paying for your policy annually tends to be cheaper.

While paying for your car insurance policy in monthly instalments might help you budget more effectively, it’s likely to bump up the price.

That’s because insurance companies tend to add interest onto these payments, making you pay more than you need to.

If you’re able to do so, one option could be to use a credit card with 0% interest on purchases. That way you still get the benefit of budgeting monthly without the added charges on top.

Be accurate with your mileage

It’s worth thinking about how much you use your car, and give an accurate figure when getting a car insurance quote.

Generally, the more miles you drive, the more at risk you might be of making a claim. It stands to reason that this could increase your car insurance costs.

So, driving fewer miles could help shave some pounds off your premium.

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 two MOT reports for a rough idea of how much mileage you do in a year.

Enhance your security

The harder it is to steal your car, the less of a risk it is. This usually means lower insurance prices.

There are a number of 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.

Consider a telematics policy

A telematics (black box) policy helps tailor 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 e.g., driving curfews or mileage caps. But if you prove yourself to be a safe, sensible driver, you could see your costs go down.

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 business car insurance.

What class of use you go for could have an impact on the price you pay. And being inaccurate could mean any future claims could be invalid.

Some people assume that a third-party-fire-and-theft policy is cheaper than a comprehensive car insurance policy.

This isn't always true. They're often more expensive. This could be due to higher-risk drivers going for a lower level of cover in an attempt to lower their costs.

So, it’s wise to choose the kind of policy that actually suits your needs.

Watch out for extras you don't need

Do you need add-ons like:

You might get some of these add-ons as part of another policy, or with your bank, for example.

And you might find that it could be cheaper to buy these extras as separate policies rather than bolting them onto your existing insurance.

Even if you do need these extras, you might still be able to save a bit of money. Do you really need breakdown cover with European coverage if you don’t plan on driving abroad?

Remember to shop around for these add-ons too.

Increase your voluntary excess

Your car insurance excess is what you'd have to pay out if you made a claim. So only set your voluntary excess to what you're comfortable with.

You can’t change your compulsory excess, but you can change your voluntary excess.

A higher voluntary excess tends to mean a lower policy cost. But bear in mind that this could lower your payout if you make a claim in future.

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.

These two jobs have vastly different driving habits and would likely be reflected in their premiums.

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.

Remember that it’s important to be as accurate as you can when describing your occupation, to make sure you're getting the right level of cover.

Think about your named drivers

Sometimes, adding a named driver to your car insurance policy could result in a lower premium. This could happen when the named driver is older or has more experience.

But having many drivers on your policy could mean higher insurance costs. This is especially true if they're younger drivers, as they tend to be a higher risk.

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, they could instead get temporary car insurance.

Downsize or change your car

The kind of car you drive could have a big impact on your insurance price. This is down to a few factors:

More expensive cars could be more desirable to thieves. And a more powerful car could mean more expensive damage claims. This all adds up to an increased risk.

The general rule is the bigger and more expensive a car is, the higher your insurance might be. These bigger cars might also come with increased car tax costs.

Obey the law

Having a motoring conviction and points on your licence make you look like a bigger risk to insurers. So, keep your licence clean to keep your costs low.

The DLVA keeps most points on your licence for four years. But insurance companies keep them on their records for five.

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 you risk invalidating your policy.

Build and protect your no-claims bonus

Every year you go without making a claim on your car insurance adds to your no-claims bonus.

The more bonus you rack up, the bigger a discount you get on your insurance.

Every time you make a claim,  your no-claims bonus gets reduced, usually by two 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.

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.

Never leave it until the last minute

Being organised is usually the best course of action when sorting out your car insurance.

You should get your renewal letter from your insurance company around three weeks before the renewal days.

The letter should tell you what you paid for your car insurance last year, as well as what your policy will cost this year.

Strike while the iron’s hot. Generally, the closer to your renewal date you get, the more expensive other quotes could become.

So, as soon as you get that renewal letter, it’s worth shopping around and comparing the quotes you get with your renewal price.

For the sake of five minutes’ preparation, you could shave off hundreds of pounds.

Take a driving course

The more driving experience you have, the lesser the risk of you making a claim. So, it could be worth considering a Pass Plus course to get some advanced driving skills under your belt.

Pass Plus courses give you practice and confidence when driving in a number of riskier situations including:

If you’re better able to drive in these conditions, your chances of making a claim should be less. And less risk could also mean lower car insurance prices.

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 one admin charge.