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How to save money on car insurance

How to save money on your car insurance

Insurance is one of the biggest expenses associated with running a car, but there are ways to save money on your annual premium.

No specific advice can guarantee cheap insurance for all, but here’s a general guide on how to cut the cost of your cover. And the things you definitely shouldn’t do…

Buy the right car

This seems obvious and, of course, there’s probably a whole other article here. Generally speaking, the more powerful the car’s engine, the costlier its insurance.

Equally, choosing a more expensive car will also bump up the cost, as will any model considered a theft-magnet. Ask anyone who drives a Volkswagen Golf R.

If affordable insurance is your prerogative, a humble hatchback beats a racy sports car. Check out our list of the cheapest cars for young drivers to insure.

For many reading this, though, that won’t matter. You have your car and simply want the lowest quote. 

Shop around – and haggle 

Many drivers get complacent about car insurance. Put in the legwork, shop around and switch providers if necessary. Never simply accept your renewal quote.

Try the price comparison sites, but also contact insurance companies directly. It’s mostly up to chance which provider gives you the best deal, so it’s worth talking to all of them.

Research by Consumer Intelligence shows haggling with your existing provider at renewal time could save you money, too. One in five drivers who haggle are offered lower premiums by their existing insurer, who will frequently match the best price quoted elsewhere.

Get your story straight

cheap car insurance

There are a number of things you must tell an insurer about yourself and your driving career. These include: how old you are, how long you’ve been driving, if you’ve had any accidents and when, what you do for work, where you live, how much you drive and so on.

While you must tell the truth, there is some leeway. Your career for instance, can be listed in a number of different ways. A photographer might be a videographer or a multimedia assistant. A bricklayer is a builder is a labourer . Play with the variables, but don’t stray from the truth.

It’s worthwhile working out how far you drive, too. The number of miles you cover in a year will affect your quote. Lower is better, in most cases.

Consider different types of policy

There are generally two types of policy: third-party, fire and theft, and fully comprehensive. If your car is worth anything over £500, we’d recommend fully comprehensive.

Third-party policies do not cover the cost of repairing or replacing your vehicle in the event of an accident – only the car or object you crash into. Third-party is often a last resort taken by new drivers to get their premium down.

Multi-car policies are interesting, however. Whether you’re living with your parents or have flown the nest, they can offer significant savings. Likewise, if you live with a partner and you both drive, it’s definitely worth checking whether you can share a multi-car policy.

Young drivers can also be added to a parent’s policy – fully-comp, with the ability to earn a no-claims bonus – for potentially a lot less than insuring themselves. 

Have a black box fitted

It’s not the most pleasing of solutions, but a black box telematics systen watching your every move behind the wheel may lead insurance companies to charge you less.

They have become a mainstay of the newly-passed young driver. Indeed, many companies insist on a black box for the youngest road users.

Move somewhere safer

car insurance

Location is a big factor in the cost of car insurance, whether you park on the road or keep your car garaged.

Perhaps you should consider moving away from Carjack Alley and closer to Upstanding Avenue.

Don’t crash

Obviously, not crashing is a good thing in general. Never mind the immediate stresses of a prang, for the next three years (at least), your insurance will be more expensive.

That’s all thanks to the no-claims bonus you shattered – along with someone else’s headlight…

Get older

With age and experience come a great many things, including cheaper car insurance. Both 21 and 25 are big milestones when it comes to lower quotes.

If you can afford to go without a car, sit on your licence until you’re a bit older. Pass your test as early as possible, though. Remember, insurance companies will ask how long you’ve had your licence when totting up quotes.

How NOT to save money on car insurance

Car insurance

Be honest about everything – simple as that. Don’t lie about modifications, the miles you’ll be driving, where you live, what you do, or where the car is parked.

Any untruths will invalidate your policy in the event of an accident. It’s not worth the risk.

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Car insurer offers free home recovery as lockdown lifts

RAC recovery

Car insurance company NFU Mutual is providing free RAC recovery and home breakdown cover as the lockdown lifts.

The offer applies to more than 600,000 of NFU’s car and light van customers. It remains valid until 31 August, even if UK lockdown restrictions are fully lifted before that date.

RAC data shows a 78 percent increase in home breakdowns between 23 March and 11 May, with a record number of call-outs due to flat batteries.

This number is expected to increase in the coming months. 

Battery breakdowns at record level

RAC recovery

The NFU offer includes national recovery and home start (normally an addition to standard RAC breakdown cover). 

To quote the small print: ‘The cover will include emergency roadside assistance, recovery of the vehicle, driver and passengers to any UK destination if the vehicle cannot be repaired at the roadside, accidental mis-fuelling cover, unlimited call outs and no call-out charges, and small hire car for 48 hours if the vehicle needs a longer repair and the repair cannot be done the same day.’

Motorcycles and larger commercial vehicles (e.g. tractors and lorries over 3.5 tonnes) aren’t covered, but the vast majority of NFU Mutual policyholders will be eligible.

There is no need to activate the offer. If you are insured with NFU Mutual and need RAC assistance, simply call 0800 282 652 and select ‘breakdown’ when prompted, quoting your vehicle registration. 

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Crashed cars: what do these insurance write-off categories mean?

Cat S, C, D, N: What do the car insurance write-off categories mean?

Crashed cars: what do these insurance write-off categories mean?

If you’re searching for a used car, you may come across vehicles described as a ‘previous write-off’.

Essentially, this means the car’s been damaged severely enough for the insurers to consider it not worth repairing, but someone has repaired it to return it to the road.

A car can be one of four write-off categories, depending on the severity of the damage.

These were revised in 2017 when the Association of British Insurance (ABI) changed its salvage code, to reflect the structural damage to a car rather than focusing solely on the cost of repair.

The categories are as follows:

Category A: The most serious category. Category A write-off must be crushed: it can never legally be used on the road again. Parts cannot be removed from the vehicle, even if they appear to be salvageable.

Category B: This signifies serious damage. The car again should never be used again on the roads and its body shell must be crushed. Parts may be removed from the vehicle for use on other cars.

Category S (formerly category C): The car has suffered structural damage and would be uneconomical to repair. If repaired by a professional, it may be returned to the road.

Category N (formerly category D): The least severe category. Damage is non-structural, but could affect safety-critical features such as brakes or steering. Category D write-offs may be returned to the roads, but not until they’ve been professionally repaired.

It’s worth bearing in mind that a car’s value can affect its likelihood to be written-off. As insurance companies are responsible for writing a vehicle off following a crash, these tend to work on the car’s value.

To put it simply, a nearly-new, expensive car will need a lot of damage to make it a write-off. An old banger with little value only needs small cosmetic damage to be written off.

Insurance write-off categories: Q&A

Car bootlid damaged in an accident

How do I know if a car’s been written off in the past?

Although sellers should legally declare an insurance write-off, some unscrupulous owners try to hide it. You can get around this buy searching for a car on Auto Trader, as all insurance write-offs are automatically declared, or by buying a vehicle history check.

Should I buy an insurance write-off?

The only reason to buy a car that’s previously been written off is if it’s considerably cheaper than an undamaged example. If it is, be aware that you’ll also have to declare it when you sell the car on, and that will affect it’s value.

Only category S and N vehicles (D and C under the old system) can legally be sold for use on the road. We’d want to fully understand what caused the damage and see evidence that it’d been repaired by a reputable body shop. You’ll also need to declare that it’s a write-off to your insurance company.

What happens to my car once it’s written-off?

If your car has been damaged and the insurance deems it not worthy of repair, they will offer you what they consider to be the market value of the car and essentially buy it off you. It will then be sold at auction of scrapped, depending on the severity of the damage.

If you wish to keep the car, you may be able to buy it from the insurance company. It’s worth noting that it’ll then be your responsibility to repair the car, and there may be extra damage that isn’t obvious by looking at it. You’ll also have to declare that it’s a write-off when you insure the car or sell it.

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LV is latest car insurer to offer lockdown refunds

LV insurance refunds

LV has followed Admiral’s lead by offering refunds to car insurance customers.

The company says it can afford the refunds due to fewer claims made during the coronavirus lockdown.

The LV refund scheme differs from Admiral’s £25 flat-rate approach. To qualify for LV’s refund of £20 to £50, a customer must meet the following requirements:

  • Have not yet received the 80 percent payment scheme from their employer, or;
  • Are self-employed and are unable to work or trade due to the coronavirus, and haven’t received the 80 percent payment, or;
  • They were made unemployed at any point after 1 March 2020

Customers who arranged insurance via a broker are excluded from the scheme. 

‘Right thing to do’

Steve Treloar LV

Steve Treloar, chief executive of LV general insurance said: “Right now, there are millions of families across the UK who are facing unforeseen pressures on their finances as a result of coronavirus.

“Our research shows that a third of people with motor insurance are currently concerned that they will struggle to pay bills such as insurance premiums over the next three to six months with 1 in 10 saying they are very concerned at their ability to do so.

“So, we believe it’s vital and the right thing to do to concentrate the additional financial support we can offer on those who are really struggling.

“We spent a lot of time thinking about the best way to help customers and this enables us to give between £20 and £50, which to some families will make a real difference.”

LV’s package ‘a step down’

LV car insurance refunds

James Blackham, CEO of By Miles, says the LV scheme doesn’t go far enough. “While another major insurer, LV, offering refunds to customers is a good thing – what they are offering is actually a step down from Admiral’s support.

“While Admiral gave an automatic £25 refund to all customers, LV is only offering refunds of between £20 – £50, but only to those who can prove they are financially worse off due to coronavirus.

“And they’re making policyholders do the leg work – asking drivers to contact them directly to apply for a rebate.

“We hope this is just the first step, and LV is prioritising customers who’ve experienced financial difficulties before offering refunds to all their drivers who have not been getting their money’s worth from their policy.

“Those who are driving less, you should pay less. It’s as simple as that. Any customers who are looking for refunds from their insurer (if they haven’t been already) should contact their insurers and make this point.

“We forecast traditional car insurers will save in excess of £1 billion due to the lockdown and hopefully today’s guidance from the FCA will see more car insurers do the right thing and pass on these savings – to all of their customers.”

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Car insurance prices fall to five-year low

car insurance quote

The price of car insurance has fallen to its lowest level in five years. That’s according to new research published this week.

Although the year-on-year cost of a fully comprehensive policy increased in the first quarter, data from April shows a steep decline. A policy in Q1 (January to March) cost £485, but had fallen to £462 by the end of April.

Prices fluctuated during 2019, starting the year at £480, then rising and falling, before settling at £503 by the end of the year.

RAC data shows the volume of vehicles on the road had fallen by 40 percent by the second week of the lockdown. This has led to speculation that insurance companies will reduce premiums in the second half of 2020.

Last month, Admiral announced that it was refunding policyholders to the tune of £25.

There are still regional price variations in the UK. For example, a customer in East London is likely to pay an average of £986 for cover, while somebody in Llandrindod Wells will pay just £300. 

Insurance is also three times more expensive for drivers under 25 than it is for motorists over the age of 50. Drivers aged 65 or over pay £289 on average.

‘Don’t let your policy automatically renew’

Best car insurance companies

Dave Merrick, car insurance spokesman at MoneySuperMarket, said: “Our research shows car insurance premiums in the first quarter of 2020 increased marginally year on year. This is partly attributable to price rises in the final quarter of 2019 in response to a change in the discount rate – a figure applied to large personal injury compensation claims – which triggered premium inflation.

“But our latest research shows that April’s prices are at their lowest levels in five years. Whether there’s any link to the coronavirus crisis is difficult to say for certain, but it is likely to be a factor. An unintended consequence of the lockdown has been fewer cars on the roads and fewer accidents, so it’s fair to assume that this could result in reduced prices.

“Whatever happens to premiums in the coming months, make sure you don’t let your policy automatically renew as you’ll likely see your costs increase. Always switch your provider before your policy renews – doing so can save you up to £270.”

Top 10 most expensive locations for car insurance

  • Location
  • 1. East London
  • 2. Ilford and Barking
  • 3. North West London
  • 4. Southall and Uxbridge
  • 5. North London
  • 6. Harrow
  • 7. Bradford
  • 8. South East London
  • 9. Manchester
  • 10. London West End
  • Q1 2020 cost
  • £986
  • £900
  • £887
  • £858
  • £825
  • £762
  • £760
  • £752
  • £746
  • £740

Top ten least expensive locations for car insurance

  • Location
  • 1. Llandrindod Wells
  • 2. Kirkwall
  • 3. Dorchester
  • 4. Exeter
  • 5. Truro
  • 6. Torquay
  • 7. Dumfries and Galloway
  • 8. Inverness
  • 9. Taunton
  • 10. Galashiels
  • Q1 2020 cost
  • £300
  • £302
  • £303
  • £306
  • £306
  • £311
  • £313
  • £314
  • £318
  • £319

Click here to find out how to save money on your car insurance.

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Men pay 26 percent more for car insurance than women

Men pay more for car insurance than women

Men are paying 26 percent more than women to insure their car. That’s according to data from 15 million insurance quotes provided from January 2018 to January 2020.

The research found that men pay an average of £581 for cover, while women pay £460: a difference of £121.

MoneySuperMarket, the company that commissioned the research, says there are a number of factors behind the price difference.

For example, men are five times more likely to own a car that costs £1,000 or more to insure. They’re also 16 percent more likely to own a car that costs £500 more to cover.

Similarly, men are 84 percent more likely to work in jobs that result in an average premium of £500 or more.

One such job is professional football. The data shows 96 percent of professional footballers who enquired about car insurance were men. The average premium for a footballer is a whopping £2,166.

Insurance group rating is another factor. In the UK, cars are placed into groups ranging from 1 to 50. Although there are a number of factors at play, the lower the insurance group, the less you’re likely to pay for car insurance. One in five men drive a car in the top 20 groups.

Shop around for a better deal

car insurance quote

Dave Merrick, car insurance expert at MoneySuperMarket said: “Our research shows that on average men pay £121 more than women for car insurance. Whilst insurance providers cannot legally discriminate based on gender, other rating factors – such as the car you drive and your occupation – will influence the price you pay.

“Our data shows that men typically drive cars in higher insurance groups and work in professions that attract a higher insurance premium, pushing up the cost of their insurance.

“No matter your personal circumstances, there are a number of things you can do that may help to reduce the cost of your insurance. For example, parking your car in a secure location, fitting an alarm and reducing your mileage are all ways to bring costs down.

“Shopping around for a better deal can also save you up to £2,702. It’s vital to ensure your policy doesn’t auto-renew as this can sometimes lead to an increase in your premium. More than 14 million motorists still allow their policy to auto-renew every year, meaning that £565 million more is being spent on car insurance than is needed.”

Click here to view the full data.

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Parking problem? New insurance offer covers scratches and dents

Scratch on car bumper

An insurance company has teamed up with a scratch and dent repair business to offer a new minor restoration service.

ChipsAway uses small to medium repair technology (SMART) to remove chips, scuffs, scratches and dents from vehicle bodywork.

The new partnership allows insurance policyholders to claim up to three times a year for minor repairs. It went live this week, with prices starting from £15 a month.

Although ChipsAway fees vary according to the damage, the company’s website quotes prices ranging from £70 to around £500 plus VAT.

In one example, a customer was quoted £3,200 for repairs to a Tesla. ChipsAway completed the job for £516 including VAT.

Not every job can completed using the SMART technique, but if the insurance cover costs £180 a year, it could be a worthwhile investment, especially if you live in a city – or are prone to parking mishaps.

There’s also the bonus of the work being completed at home, rather than the car having to visit a bodyshop for repairs. The service is available to customers in England, Wales and Scotland.

The Stubben Edge website claims the offering could save motorists up to £250 each time they claim.

‘Three claims during the policy year’

Scratches on car bumper

Stubben Edge deputy managing director Karen Barretto said: “Policyholders will be able to benefit from up to three claims during the policy year plus access the SMART rewards club, which will give them access to exclusive discounts and benefits from national retailers – offering great savings on motor-related services, food and fashion.”

ChipsAway managing director Tim Harris added: “Most repairs can be completed in under three hours at the motorists home or office, ensuring maximum convenience for customers. ChipsAway also has a lifetime of ownership guarantee, so customers can be confident they will be getting the best service possible.”

“ChipsAway is very pleased to be working with Stubben Edge and look forward to building the best SMART insurance offer for UK car owners.”

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Car thefts rocket 21 percent in 3 years

Car thefts up in the UK

The number of car thefts rose by 21 percent between 2016 and 2019, according to data from a Freedom of Information (FOI) request.

Of the police forces that responded, Nottinghamshire saw the largest increase, with the county’s constabulary reporting an overall rise of 59.7 percent. Nearly 1,500 cars were stolen between 2018 and 2019.

Staffordshire Police reported a similar rise (53.8 percent), while there was a 50 percent increase in Hertfordshire.

It’s not all bad news. There was a 78.7 percent fall in car theft in Wiltshire, with just 156 stolen in 2018/19. Car crime was also down in Humberside (-35.8 percent), Merseyside (-26.9 percent) and Avon and Somerset (-3.5 percent).

Neil Thomas, director of investigative services at accident aftercare company AX, said: “While the lockdown may temporally reduce some types of car theft, criminals are using increasingly intelligent ways to steal vehicles and continue to find success. The combination of organised crime getting smarter and ability to make quick returns has drastically increased pressure on police forces to control the theft of motor vehicles.

“Car thieves are opportunists and have no respect for property and will remain determined to carry on illegal activity despite the current restrictions on movement across the UK. I have even seen recent reports of vehicles belonging to key workers being stolen.

“During this period of lockdown, it’s even more important that car owners remain vigilant and do what they can to keep their car safe while they’re using them less frequently, if at all.”

Biggest increases in stolen vehicles

  1. Nottinghamshire: 59.7 percent
  2. Staffordshire: 53.8 percent
  3. Hertfordshire: 50.0 percent
  4. West Midlands: 44.6 percent
  5. Surrey: 44.1 percent

Biggest decreases in stolen vehicles

  1. Wiltshire: -78.7 percent
  2. Humberside: -35.8 percent
  3. Merseyside: -26.9 percent
  4. Avon and Somerset: -3.5 percent

Keeping your car secure during the lockdown

Car crime

Thomas, who is a former detective inspector, has the following advice for keeping your car safe when not in use.

  1. Keep your keys safe. Store your car keys away from the front door to prevent criminals from ‘fishing’ them through the letterbox. Avoid taking the keys upstairs. Click here for how to avoid becoming a victim of keyless car theft.
  2. Check the doors are locked. Electronic devices that jam the signal from your key fob are increasingly common.
  3. Consider disabling keyless technology. Many systems can be temporarily switched off to prevent electronic compromise.
  4. Review your home security. Consider the installation of motion-detecting CCTV at your property.
  5. Don’t despair. If the worst happens, there are tracking solutions and recovery services available to help you locate your vehicle.

 A total of 17 police forces responded to the FOI.

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Car insurance company refunds customers due to lockdown

Insurance refunds

Admiral is giving its car and van insurance customers a £25 refund. It’s in recognition of the fact that customers are staying at home and driving less during the lockdown.

The company expects this to result in fewer insurance claims.

Last week, we reported that the average car insurance premium has hit £755. This was countered by the potential for cheaper premiums in the second half of the year. Admiral is the first company to act.

The company says the refund – which will be automatically credited to customers by the end of May – will affect 4.4 million vehicles. It’ll cost Admiral £110 million – a third of its 2019 profits. In what could be a lesson for other providers, it says it is passing on ‘the savings from reduced claims the company may otherwise have benefited from during the lockdown’.

In addition to the refund, Admiral is waiving any excess fees for NHS or emergency workers. It’s also guaranteeing cover for customers using their vehicle to transport people, deliver medical supplies and equipment, or items to people who are self-isolating.

‘Give something back’

Ambulance driver

Cristina Nestares, CEO of UK insurance at Admiral said: “During this challenging period, our main priorities have been helping our customers, supporting our local community and protecting the wellbeing of our staff, which is why we have introduced these initiatives to give something back to the customers and communities we serve.

“This is an unprecedented time when people across the country are driving significantly less than before the lockdown, and we expect this to lead to a fall in the number of claims we are seeing. We want to give the money we would have used to pay these claims back to our loyal customers in this difficult time. We have also already reflected this change in driving behaviour in our pricing for customers and will continue to do so.

“There may be fewer cars on the roads at the moment, but for many NHS and emergency services workers their cars are vital for them to get to work. At the best of times it’s stressful if you’re involved in an accident, so we’ve implemented new measures to take some of the pressure off and ensure they can stay on the road.

“We wanted to show our support for NHS workers in all roles; from doctors and nurses to admin teams and cleaners, they are all doing a brilliant job of helping to save lives and keep the NHS running smoothly during this crisis.”

Click here for more information on the Stay at Home Refund.

Coronavirus could reduce the cost of car insurance

Coronavirus car insurance to fall

The average car insurance premium is now £755 – an increase of £24 compared with the previous quarter. This is a sharp rise from when premiums hit their lowest level in the third quarter of 2019 (£708).

Figures from Compare The Market show premiums are now perilously close to their peak of £758 at the end of 2017. This is around £200 more expensive than the low of £559 in 2012.

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Insurance Premium Tax (IPT) rises and the changes to the personal injury discount rate are two factors behind the increased cost of insurance.

IPT is calculated as a percentage of the annual cost of car insurance, which can penalise young drivers. Indeed, young motorists are charged an average of £134 in IPT every year – versus £77 for other drivers.

However, the cost of car insurance could fall in the next quarter. With lockdown measures in place, insurance companies are dealing with fewer claims. This could encourage them to offer cheaper premiums in the second half of 2020.

‘Lower prices to consumers’

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Dan Hutson, head of motor insurance at Compare The Market, said: “Following a period of reducing premiums, motorists will be disappointed that premiums have continued to rise. This spiralling cost of insurance is thanks, in part, to hikes in Insurance Premium Tax.

“IPT remains a fundamentally unfair tax, as those that can afford it least pay the most. IPT is calculated as a percentage of the annual cost of insurance, which means that those who have higher premiums pay higher tax. This unfairly penalises young drivers, who usually pay higher premiums. The rising cost of running a car, particularly for younger people, is making driving a luxury for many who see it as necessity.

“However, while the impact of the coronavirus is still unclear, the reduction in car usage could result in a reduction in premiums around the UK. The Government has reported a near 70 percent reduction in motor vehicle use across the country. With mileage reducing, this is likely to result in significantly fewer claims, which could in turn mean that insurers can offer lower prices to consumers.”

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