How to drive down the cost of car insurancePosted on: 15 June 2009 by Gareth Hargreaves
It is possible to reduce your premiums by hundreds of pounds and stay protected.
Switching car insurance provider can be a painless way to save hundreds of pounds or more a year.
You should compare deals whenever you come to renew and may even be able to save by paying an exit penalty and changing mid-term. Bear in mind that there are few rewards for loyalty.
Here is our guide to reducing your premium without skimping on protection.
You can compare prices across scores of insurers in minutes at comparison websites, but be aware that some sites provide estimates rather than binding quotes. Exceptions include Confused.com and Gocompare.com, where the price you see is the price you pay.
It is worth trying several sites before choosing an insurer because none cover the whole of the market. Confused.com is the only comparison site to list AA, Asda, Churchill, elephant, Kwik Fit, More Than, Sheila’s Wheels and Tesco, for example.
Will Thomas, of Confused.com, says: "Some companies will strip their policies to push them to the top of the tables, so check the excesses payable if you need to make a claim and whether a policy includes extras such as legal or courtesy car cover."
The simplest way for most people to reduce the cost of cover significantly is to downsize their vehicle because cars with bigger engines cost considerably more to insure than less powerful models.
For example, Confused.com finds quotes from £353 a year for the 42-year-old male owner of a 3,189cc Volkswagen Golf and from £205 a year for the equivalent owner of the 1,390cc version.
Reducing your mileage can also bring big savings. A driver who clocks up 9,000 miles a year will pay about 20 per cent less than one who does 12,000 miles a year.
Test your titles
Be as specific as possible when entering your job description.
For example, the title manager gives insurers less of an idea of your risk profile than callcentre manager. The latter is clearly a desk job with no driving involved and would cost less to cover.
Also check prices for all legitimate job descriptions, such as landlord and publican or lawyer and solicitor. Quotes may differ significantly.
Add a second driver
Younger drivers can save as much as 15 per cent on their premium by adding an older second named driver, such as a parent. There is no need for this person to drive the car.
However, insuring a car in the name of an older relative, with its principal driver named as a second driver, is unlawful “fronting” and invalidates the policy.
Research for Moneysupermarket.com indicates that two thirds of motorists are unaware that this is illegal. Steve Sweeney, of the comparison website, says: "It may save you money, but if caught, your insurance will be invalidated and the driver could be charged with driving uninsured."
Don’t pimp your ride
Modifying a car will increase your premium. Research for uSwitch.com, another comparison website, indicates that common additions, such as a rear spoiler, tinted windows and flared wheel arches, together add an average of £2,682 to an 18-year-old’s premium - the spoiler alone adds almost £700.
Opting for sportier models is also costly. The same research indicates that an 18-year-old driver with a Peugeot 206 GTI will pay £6,485 a year more in insurance than the same driver of a regular Peugeot 206.
Lower your risk
Insurers increase prices if your car is vulnerable to theft or vandalism, so you could pay hundreds of pounds more if you park on the street rather than in a garage or on a driveway. If your car does not have an alarm, you can save a further 10 per cent by fitting an approved system.
In addition, young drivers who take a Pass Plus advanced driving course within a year of passing their test can save up to 30 per cent on premiums.
Don’t skimp on cover
It may be tempting to cut back on cover to save money.
Third-party premiums offer the minimum protection required by law, paying out for damage to other vehicles but not your own in the event of an accident. But these policies cost only about 11 per cent less than comprehensive cover, and 7 per cent less for younger drivers - probably only worthwhile if your car has a low resale value.
Save a bundle
Some new cars come with bundled insurance as a sales promotion.
For example, Vauxhall is offering a year’s free comprehensive cover for 19 to 80-year-olds on its Corsa Club models. Remember to compare deals before renewing as policies may not be competitively priced.
Look for special offers
Most providers offer better rates to people who buy online - through their own websites or a comparison site. Discounts of up to 15 per cent on the telephone price are typical.
Tesco Personal Finance is giving a £100 Kärcher pressure washer to new customers who are Tesco Clubcard holders and buy a policy (excluding value cover) by July 22.
Churchill is offering free level one breakdown cover, provided by Green Flag, to customers who buy a policy by July 31. This includes 24-hour roadside assistance, with no call-out charge and up to an hour’s free roadside labour.
For greener-minded drivers, Co-operative car insurance will offset 20 per cent of fuel emmissions and provides an accident recovery service and 30 days of free European cover.
Direct Line is giving a days’ free insurance for each week covered until 30 June.
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