How to reduce car insurance: 12 tips

Like everything else, the cost of car insurance is generally on the rise. Premiums have been increasing for some time as a result of increases in energy costs, problems in supply chains, and a rising number of claims. But there are ways to lower what you pay. These 12 tips on how to reduce your car insurance will have you saving your pennies in no time.

Let’s take a look at some options for reducing car insurance costs.

How can I reduce my car insurance cost?

It probably goes without saying (but we’ll mention, just in case) that there are two key factors that affect your insurance cost the most:

• The type of vehicle you drive: Cars that are large, fast, and more difficult and expensive to repair or replace inevitably cost more to insure than cars that are smaller, less powerful, and have readily available parts.
• The type of insurance you choose: Comprehensive insurance is typically more expensive than third party, fire and theft, and third-party-only insurance. However, bear in mind that if your car is written off in an accident and you don’t have comprehensive insurance, you’ll have to factor in the cost of replacing your vehicle. 

Now, what else can you do to make your insurance cheaper?

1. Increase your voluntary excess

Your voluntary excess is the amount you pay when you make a claim. The more you pay, the lower your monthly premiums are likely to be. But before you opt for this route, make sure that you can afford to pay the excess you agree to — you don’t want to save in the short term only to be hit by an unmanageable cost down the line.

2. Limit your mileage

The further you drive every year, the more you’re likely to pay for insurance. This is because your chances of having an accident increase the more you drive. Reducing your annual mileage can lower your premiums. But, be honest with your insurer about how much you drive. Failing to report your mileage accurately might cause problems when you claim.

3. Improve your vehicle security

Installing alarms, immobilisers, or tracking devices can reduce the risk of theft. Tell your insurer about these security measures and they might lower your insurance costs.

4. Go for an advanced driving course

Ever heard of the Plus Pass Scheme? It’s a training scheme for drivers who want to improve their skill set and experience. It’s generally for newly qualified drivers, who typically do it during the first year after they pass their test, but any one with a full UK driving licence is eligible.

While insurers don’t typically apply an automatic discount to your insurance if you complete Plus Pass, they may consider a reduction. Chat to your insurer about their approach to Plus Pass.

5. Consider black box insurance

A black box is a small telematics device that is fitted to your car’s dashboard or battery. It monitors your driving habits, including how fast you drive, where and when you use your vehicle, and how aggressively you accelerate, brake, and take corners.

When this data is fed to your insurance company, they have a real-time picture of how you drive. This can help them build up a more accurate picture of your risk profile and, provided you drive safely, lower your insurance premiums accordingly.

Read more: Car insurance without a black box: What to know

6. Be selective about your modifications 

While some modifications (like additional security measures) might lower your premiums, souping up your vehicle can have the opposite effect. Before you make any major changes to the engine, exhaust, brake discs and pads, or wheels — or several other modifications — speak to your insurer. They’ll be able to tell you whether your premiums might increase.

7. Build up your no-claims discount

A no-claims bonus is a discount on your future premiums in exchange for not making a claim. Think of it as a reward from your insurer for careful driving and responsible car ownership.

8. Select your insurance occupation carefully

What you do for a living affects what you pay for insurance. This is because some insurers consider certain professions (like hospitality workers, construction workers, and couriers) more likely to claim than others (like nurses, civil servants, and teachers).

Make sure you select the correct insurance occupation category when you apply for insurance. While it’s imperative that you’re 100% honest, subtle changes can make a difference to your premium. A broker can help you here.

9. Pay your insurance annually

Paying your premium in a lump sum rather than by monthly instalments is often cheaper. While the initial outlay can be a little harder to swallow, you’ll reap the benefits over time.

10. Bundle your insurance policies

If you have multiple insurance needs (such as car insurance, home insurance, and life insurance), look into the option of bundling them with the same provider. An insurer is more likely to offer you a discount if you have multiple policies with them.

11. Review your coverage

When was the last time you read your policy’s fine print? Are you paying for extra add-ons that you aren’t likely to need or don’t apply to you? For example, you might have added European cover for last year’s road trip, but then failed to take it off. Take a moment to review your coverage in detail and remove any unnecessary extras.

12. Speak to an insurance broker

Shop around. Compare quotes from different insurers to find the best deal. Don’t just renew your existing policy without checking other options. A good insurance broker can help you find the type of cover you need at the best price.

Who typically has the cheapest car insurance?

If you’re seeking lower car insurance, it’s worth knowing what sort of drivers tend to get the cheapest insurance. The explanations below might also help you if you’re wondering, “Why is my car insurance so high with a clean record in the UK?”

Unfortunately, having a good driving record doesn’t always mean you’ll get the best deal. There are several other factors that are worth considering:

• The type of vehicle you drive: Expensive, powerful, or uncommon cars often cost more to insure because they’re more difficult to repair or more likely to be stolen. Drivers of more affordable cars pay less for insurance.
• Where you live: Living in an area with high crime rates or heavy traffic can increase the cost of your premiums. Take a look at these regions in the UK that have had the biggest insurance price increases.
• Your age and level of experience: Insurers consider younger and less experienced drivers at higher risk of making a claim, which means they pay higher premiums. If you’re over the age of 50 and have a strong no-claims bonus, make sure your insurance contributions reflect this.
• How safely you drive: People who drive safely and have no history of accidents tend to pay less. If you’re a very cautious driver, getting black box insurance might be a good idea.
• Annual mileage: The more you drive, the higher your chances of being in an accident. This is likely to increase your premium.

Quickfire summary

Car insurance can be expensive, but there are ways to ensure that you’re paying as little as you possibly can, while still securing the coverage you need. Understanding the factors that affect your premiums can make a big difference. 

Start by looking at the kind of vehicle you’re insuring and the type of coverage you need. Then, examine your policy, remove any additional add-ons, consider increasing your voluntary excess, and weigh up if black box insurance is right for you. Paying your insurance annually and bundling your policies can also help.

Be sure to seek out the advice of an experienced broker, too. The team at Howden can help you find a new policy that’s within your price range, or evaluate your current policy to see whether there are any discounts to be found. We’ve helped new car insurance clients save up to £196 on their policies. Contact us today.

Also read:

• How much is car insurance? Your guide to costs, factors, and how to save money
• When is my car insurance due?
• How to check if a car is insured
• CAR INSURANCE GUIDES