Car insurance is one of the unavoidable costs of motoring. Although average car insurance premiums fell by £30 in the first nine months of 2020, getting cover remains one of the most expensive aspects of running a car.
A typical comprehensive car insurance policy costs £473. That’s six percent lower than it was at the start of the year, but 1.2 percent higher than this time last year.
In September, the Financial Conduct Authority (FCA) called for an end to so-called ‘price walking’, which sees insurers increasing renewal prices for consumers over time. It outlined a package of changes that would save consumers £3.7 billion over 10 years.
Although the changes might help consumers in the future, what could you do to save money when your current policy is up for renewal? Uswitch and Moneyshake have outlined ways to reduce the cost of car insurance, which could help if your renewal quote is higher than expected.
A consumer expert at Uswitch said: “Whilst the new proposal is great news for loyal car insurance customers, those in search of a one year policy need to take extra care, as the ban on special deals for new customers could lead to an overall price increase”.
Here are eight ways to cut the cost of car insurance.
An insurance premium could be reduced by up to £200 for married couples in their thirties. Research shows that single drivers are at twice the risk of having an accident than someone who is married.
Even if you’re not ready to tie the knot, some insurance companies offer discounts for couples living together, so it’s worth shopping around for quotes.
Add your parents to the policy
Adding a responsible driver with a clean driving record could reduce your premium. Indeed, you could save as much as £426 by adding your parents as named drivers.
However, named drivers must use the car occasionally, or you’re at risk of invalidating the policy due to ‘fronting’. Insurance fraud could leave you liable for any costs that arise as a result of a collision or claim.
Tweak your job title
While it’s important to tell the truth about your profession, getting creative with the job title could save you hundreds of pounds. Uswitch says a chef will pay an average of £420.70. Change the job title to ‘cook’, and the premium drops to £302.51.
It’s because premiums are based on historical data, which means chefs have made more claims than cooks.
Decrease your voluntary excess
The voluntary excess is the amount of money you’re prepared to pay in the event of a claim. You’d be forgiven for thinking that increasing the excess would reduce the annual premium. On the contrary, a typical policy is £6 more expensive with an increased voluntary excess, says Moneyshake.
Adjust your mileage
When you’re arranging cover, you’ll be asked to provide an estimate of your annual mileage. In general, the lower the mileage, the less you’ll pay. It’s easy to get an accurate figure – just look at the distance covered between one MOT and the next. Figures from Moneyshake show that reducing the mileage to 5,000 a year will save you £17.
Just be careful when estimating your mileage in 2020, because lockdown measures mean people are travelling less. The distance covered this year might not be representative of what you’ll cover in 2021.
Invest in new technology
Insurance companies are encouraging policyholders to invest in new technology. For example, drivers with dashcams usually save between 10 percent and 12.5 percent a year. This could be as much as 20 percent for young drivers.
GPS trackers, mechanical immobilisers and even steering locks could help to lower the cost of car insurance. However, Moneyshake found that by adding a tracking device and locking wheel nuts, the cost of insurance could go up. Check with your existing provider before making any changes.
Register to vote
Being registered on the electoral roll will improve your credit score, which could lower the cost of your car insurance. Experian says that registering to vote is a sign of stability, so lenders are more likely to support your application for credit.
Typically, appearing on the electoral roll at your current address will add 50 points to your Experian credit score.
Have MORE cover
Quotes with third-party, fire and theft cover are 50 percent more expensive than comprehensive policies. Moneyshake says this is likely to be a result of high-risk drivers keeping their costs low by opting for third-party cover.