24 ways to cut your car insurance premiums

Updated on 13 October 2016 | 7 Comments

As new data shows car insurance premiums are soaring, we reveal the best ways to cut costs.

Motorists are paying £109 more to insure their vehicles than a year ago, according to the confused.com car insurance price index.

Premiums jumped by 17% in the last 12 months to an average of £737 at the end of the third quarter of 2016.

Comprehensive cover has increased by 3% in the last three months alone, the equivalent of £22. 

See if you could save hundreds on your car insurance: compare quotes with loveMONEY

Why are prices rising?

At the beginning of 2016, drivers were paying an average of £672 to renew their car insurance policies, £65 less than they would have had to at the end of September 2015.

Some of this is down to a rise in Insurance Premium Tax (IPT), which is up to 10% from 6% in September last year.

It's older drivers who have been hit the hardest by the rises, with the average 66-year-old now paying 28% more on their car insurance than they did 12 months ago, taking the average premium for this age to £434.

Figures show that 17-year-olds have experienced the smallest increases year-on-year at 9%, but their average premium sits at £2,083.

As for those who pay the least, look to 69-year-olds who fork out £412 on average.

Comparethemarket.com has also blamed a lack of competition, a spate of insurance scams and higher repair bills for premium rises.

Don't fret though, as there are a few ways that you can cut your car insurance premiums. Be warned: some are more extreme than others! 

See if you could save hundreds on your car insurance: compare quotes with loveMONEY

Get a quote 28 days before renewal – and another one day before renewal

 Quotes are often valid for 28 days. This way, if prices go up just before your renewal date, you can revert to your original quote.

Shop around for the best quotes

Competition is fiercest among car insurers for new customers, so don’t automatically renew. Why not give the LoveMONEY car insurance engine a spin?

Broaden your search

Aviva and Direct Line don’t appear on any car insurance price comparison websites so you need to go direct to these insurance providers to compare quotes.

Car insurance tips and tricks

Ask your existing insurer to beat the best quote you’ve found

It doesn’t cost you anything to ask, and it’s less hassle than switching. Read more at How to haggle and make a fortune.

Increase your excess

The higher the excess, the less you should pay in premiums. Obviously you need to ensure the excess is still affordable or this trick is a bit pointless!

See if you could save hundreds on your car insurance

Declare whether you’ve made any claims

If you haven’t claimed on your car insurance for a year, you’ll earn a no-claims bonus which can help to bring your premium down.

Accurately assess the value of your car

When getting quotes, make sure you don’t overestimate the value of the car or you will end up paying too high a premium.

See if you could save hundreds on your car insurance

Trim off any extras you don’t need

Why pay for ‘free car hire’ while your car is being fixed, if you don’t need it?

Add a second driver

If the additional driver won’t actually use the car, this can bring the premiums down.

Reduce your cover

If you drive an old banger that’s on its last legs, opt for third party cover rather than comprehensive cover.

Avoid modifications

Adding spoilers, alloy wheels or boosting the engine size is likely to increase your premium.

Car insurance tips and tricks

Buy online

You usually pay less if you buy your car insurance on the internet, rather than over the phone.

Park your car off-road or in a garage

This means your car is less likely to be stolen, so is less risky to insure. Just be careful not to scuff your car on the garage's inside walls or door.

See if you could save hundreds on your car insurance

Make the car more secure

Adding an immobiliser, alarm and tracker to your car will also reduce the risk of it being stolen, and bring down your premiums.

Spend less on hire car insurance

Get car hire excess insurance and reduce your excess that way, rather than buying an expensive add-on from a car hire firm.

Get a multi-car discount

Some insurers such as Admiral, Privilege and Direct Line will give you a discount if the same person insures more than one car.

Pay for your insurance upfront

Insurers will charge you as much as 20% extra if you want to pay off your premium in monthly instalments. Pay upfront for your insurance and you'll save. Use a top 0% purchases card and you’ll be able to pay it off gradually without being charged any interest.

Take an advanced driving course

Taking the Pass Plus training course could shave as much as 30% off your car insurance premium.

Consider a ‘pay as you drive’ scheme

Some firms, such as Stoneacre, fit a special device to your car so the insurer knows how much you drive it. The less you drive, particularly at risky times (eg night-time), the less you pay! Read more in Pay As You Drive car insurance.

Buy a dashcam

Dashcams film your journeys while you're out on the road, capturing the action should you or anyone else on the road get into an accident. The footage on these cameras is being to catch out dodgy drivers and insurers love them too. Having one can shave a bit off the cost of your premiums, but some insurers will only cover specific models.

Car insurance tips and tricks

Impose a mileage limit on yourself

You can lower your premium by sticking to a mileage limit. 

Downgrade your car

Cheaper cars with smaller engines cost less to insure. Rare, expensive cars cost more!

Get married

Married drivers pay less as they are statistically seen as more ‘stable’.

Move in with your partner

Again, those in a stable relationship are seen as less risky drivers, and pay less.

Compare car insurance with loveMONEY

This is a classic loveMONEY article which has been updated

More on motoring:

How to find the cheapest local petrol and diesel prices and offers

Cheap car insurance for young drivers: how to save money

Checking your car tax: what you need to know


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