Martin Lewis’ MoneySavingExpert tool helps you find cheaper car insurance and you could save hundreds of pounds a year
DRIVERS stand to make big savings on yearly bills with a few handy tricks when buying cover.
Motorists typically fork out an average £834 a year for car insurance, according to data from price comparison site Compare the Market.
Your current insurer will send out a renewal quote for cover well before a current policy expires.
Often you don’t need to do anything at all because the policy will auto-renew when it expires using the same payment details as when you bought the product.
But if you accept the deal you will typically end up paying more than needed.
Martin Lewis‘ MoneySavingExpert has developed a handy Compare+ Car Insurance tool to help you find the best deal and save.
And it’s a good idea to try this before deciding to stay with your current insurer for another year.
Users will need to fill in a form giving basic details such as your vehicle registration number and email address.
When filling in the form, the tool will give hints on how you can lower your premium where possible.
For example, informing insurers that you drive other cars or adding a responsible additional driver can help reduce costs .
This gives a quote for cover based on prices fed in from comparison site MoneySuperMarket.com which owns MSE.
It’s worth checking three comparison websites before accepting a quote.
Some have different relationships with insurers and will give different prices that could be better.
And get a quote from Direct Line, as not all its policies are on comparison sites.
Kara Gammell, finance expert at MoneySuperMarket, said: “For most of us, the cost of driving is an essential household spend.
“Car insurance premiums have increased in recent years, but you can make savings by comparing policies to find the right cover for your needs.”
Once you have a been given quotes and found a price and policy you are happy with, you should check the details carefully to make sure it meets your needs.
Looking at the customer service score of the company can indicate how well you are treated in the event of a claim.
Recent research by consumer group Which? found that many policyholders face high rejection rates and poor customer service on insurance policies.
How to get cheap car insurance
CAR insurance is an essential cost that you hope to never use but will need to cover the costs of theft or damage to your vehicle.
It’s a legal requirement to have car insurance, and going without it could land you with a £300 fine, six penalty points on your licence and even a criminal conviction.
But there are several ways to slash your premiums.
Pay upfront
Insurers give you the choice of paying for insurance monthly or upfront.
Paying monthly spreads the cost of your cover but the insurer adds interest charges which means the average motorist pays around ten per cent more overall.
If you pay for your car insurance annually you don’t pay any interest.
A typical motorist can save up to £225 a year by paying in one go, according to comparison site MoneySuperMarket.
Increase your excess
The excess is what you agree to pay each time you need to make a claim on your policy.
You can usually choose your own excess when setting up a policy and it can be as low as £100 and as high as £500 or more.
The higher your excess, the lower your premium and vice versa.
This means you could bring the cost of your insurance down by agreeing to pay more if you do need to make a claim.
But before you hike your excess, make sure you would be able to pay in the event that you do need to make a claim.
Tweak your job
Certain jobs are seen as more risky than others for insurance purposes.
Making small but accurate changes to your job title can save you money.
For example, swapping your role from “chef” to “caterer” can save you £20, comparison site GoCompare found.
And changing your role from “fast food delivery driver” to “delivery driver” could save you £40.
But lying about your job could invalidate your policy so make sure any changes are legitimate and accurate.
Shop around
Not all comparison sites have the same range of insurers so to get the best price it’s a good idea to check two or three from Go Compare, Comparethemarket, MoneySupermarket and Confused.com.
Insurer Direct Line is also not on comparison sites so check its prices directly.
You can also get a free cash bonus by going via a cashback site such as Topcashback or Quidco.
Save the date
Renewing your car insurance sooner rather than later could save you some cash.
New cover becomes more expensive the closer you get to the renewal date.
But you can buy your car insurance up to 29 days before the policy start date and ‘lock in’ the price you’re quoted on that day.
A typical driver can save up to £265 buying new cover at least 27 days before their current policy ends, according to Go Compare.
How to cut insurance costs
Aside from shopping around for your policy there are other ways you can save on cover. Here’s how…
- Pay upfront and save £225
You usually get the option to spread out car insurance payments month rather than paying all in one go.
Kara Gammell, says: “Paying for car insurance annually is almost always cheaper than monthly payments. By paying for your car insurance in monthly instalments, you are essentially taking out a loan from the insurer with added interest rates.”
MoneySuperMarket data indicates that a typical motorist can save up to £225 based on the average monthly and annual premiums sold
If you can’t afford a one-off payment, a 0% purchase credit card can help you avoid the excess interest.
Some insurance providers will let you pay for your car insurance with a credit card and if you have an interest-free purchase credit card, you will avoid paying interest.
Just be sure to clear your balance in full before the interest-free period ends.
- Get your mileage right and save £264 a year
If you’re a high-mileage driver, doing more than 20,000 miles a year, you’ll pay more for your car insurance.
That’s because the more time you spend on the road the more likely you are to be involved in an accident, which means there is a greater likelihood your insurer will need to pay out, according to Kara.
Research by MoneySuperMarket found that the average insurance premium price for high-mileage drivers is £80 per month compared to £59 per month for very low-mileage drivers doing under 2,000 miles per year.
Most drivers do 4,000-5,999 miles per year, according to data, and are quoted £69 per month, on average.
Moneysupermarket data reveals that 12,000-13,999 miles is the point at which drivers pay the least for their car insurance, with an average monthly premium price in 2023 of £58. That’s £22 a month less than a high-mileage driver.
- Add an older driver and save £595 a year
Newly qualified drivers, who tend to also be young drivers, typically pay the highest premiums because they are less experienced and statistically more likely to have an accident.
Kara says: “If you’re a younger driver, adding an older driver who has more experience is likely to help reduce your premium.”
Research from MoneySuperMarket shows that motorists aged between 20-25 could save an average of £595 on their car insurance this way.
It’s important to note that all named drivers must use the car for the policy to remain valid.
Fronting in car insurance is when someone – often a parent or older driver – falsely claims they are the main driver of a vehicle when in fact it is a younger, or less experienced, driver who will be using the car the most.
Fronting is illegal, and if an older motorist is falsely naming themselves as the main driver of a car, then the insurance policy can be invalidated. In some cases, they could even find themselves charged with insurance fraud, which is a serious criminal offence.
- Build up a no claims discount and save £220
When you claim on your insurance policy, it pushes up the cost of cover the following year. On the other hand, if you have a claim-free record, your insurer will reward you with a no claims discount, which builds up.
The discounts vary from insurer to insurer, but research from The Association of British Insurers shows these can be as much as 30% for one claim-free year and 60% for five claim-free years, according to Kara.
One year’s worth of a no-claims bonus could knock an estimated £220 of your premium, according to MoneySuperMarket data.
What is car insurance?
Consumer reporter Sam Walker talks you through what car insurance is and what it covers you for…
Car insurance pays out if your vehicle is stolen, damaged, catches on fire or is involved in an accident.
As a minimum, it protects you against any damage you case to other road users, the public or their property – these are called third parties.
You only need to claim on your car insurance when an accident is your fault.
If another motorist is to blame, their insurance should pay out instead.
Car insurance, unlike home insurance, is a legal requirement and if you don’t have it you can be fined up to £1,000.
You can also have your vehicle seized and destroyed.
However, you don’t need to insure your car if it is classed as “off-road”, or holds a statutory off road notification (SORN).
The vehicle has to be kept on private land and not a public highway though.