Posts

Is your cheap car insurance too good to be true?

The cost of car insurance admin fees

Drivers are being warned to avoid so-called ‘ghost brokers’, who pose as legitimate car insurance brokers to sell forged or invalid policies.

Unsuspecting drivers are lured by cheap premiums that turn out to be too good to be true.

Young drivers aged 17 to 24 are most likely to fall victim to ghost brokers. Facing higher premiums, and armed with a tight budget, they’re attracted by the promise of a good deal.

They’re also likely to be active on social media – a prime hunting ground for the insurance scammers.

Non-English speaking communities are also at risk, according to Action Fraud.

Victims will be unaware they don’t have genuine cover until they submit a claim or are stopped by the police for driving without insurance. Although the police will be sympathetic, the consequences can be the same as driving uninsured.

No-claims bonus savings on car insurance

Sanctions include a fine, penalty points, disqualification from driving, a criminal record, and the risk of having a car seized by the police.

Fleur Lewis, head of fraud detection and prevention at GoCompare, said: “Younger, less experienced drivers pay more to insure their cars – which makes them particularly susceptible to adverts for heavily-discounted insurance.

“Ghost brokers often operate on social media, especially Facebook and Instagram, where they often use imagery and logos of established insurers to enhance their believability.”

Ben Fletcher, director of the Insurance Fraud Bureau (IFB), added: “Ghost broking is a serious issue, which shows little sign of slowing down. A third of all our investigations are focused on bringing ghost brokers to justice.”

How a ghost broker defrauds a victim

Ghost brokers typically defraud victims in one of three ways:

  • Forged insurance documents.
  • Manipulating the customer’s details to lower the premium. This could be done by using fake no-claims discount letters or by supplying a low-risk address.
  • Using the identity of an unauthorised third party, before cancelling the policy to pocket the refund on top of the victim’s fee.

How to spot a ghost broker

  • Be wary of unsolicited cars from insurance brokers – authorised firms are unlikely to cold-call potential customers.
  • Ghost brokers will use social media, pubs or adverts in newsagents or universities – be on your guard.
  • Check to see if the broker has an office address and landline telephone number.
  • Is the broker on the Financial Services Register and authorised by the Financial Conduct Authority or the British Brokers’ Association?

If you suspect you have been contacted by a ghost broker, report it to Action Fraud or to the Insurance Fraud Bureau’s Cheatline.

Remember, if it sounds too good to be true, it probably is.

Nearly a third of drivers have had a car written off

One in three have had car written off

A study of 2,000 drivers has revealed that, on average, just under a third (29 percent) of us have written off a car. Meanwhile, 7 percent of us have written off a car more than once.

The survey also revealed more about the circumstances of a car being written off. Two-thirds said it wasn’t their fault. Over half (55 percent) blamed a third party for their car’s demise. Ten percent said their car was stolen and written off. 

Just over one in four (27 percent) admit it was their fault. That jumps to 38 percent for respondents from the North East. Ten percent say it was their car alone, while nine percent say there was another vehicle involved in the incident that led to the car being written off.

One in three have had car written off

Looking at the gender split, men are more likely to write off a car than women. That 29 percent average splits into 32 percent of men and 26 percent of women.

Slipperier roads and darker days make traversing Britain’s roads hazard-free more difficult in autumn and winter months. Longer stopping distances and poor visibility come with rainy weather. Here’s what you need to do, to stay as safe as you can when driving in wet weather.

One in three have had car written off

“Most people don’t think about the possibility of their car getting written off,” said Ben Wooltorton, COO of InsuretheGap, the company behind the research.

“However, this research shows that it’s happened to nearly a third of UK drivers, and for two-thirds of them, it was not their fault.” 

“Buying a car is a big investment, but depreciation means that it can lose its value quite quickly. If your car is written off the insurance company will usually only pay its value at the time of the incident, not what you paid for it, which can be especially painful if you’re still paying finance on it.”

Revealed: the most expensive place to run a car

Manchester is the most expensive place to own a car

New research reveals the most expensive places to run a car – and it’s bad news for drivers in Manchester.

The city is the most expensive in the UK, where it costs £2,808.63 a year to run a petrol car. It’s less expensive to run a diesel, with the total running to £1,095.76.

At the opposite end of the scale, Carrick, Ayrshire, is the least expensive place to run a car. The figures are £1,958.72 for petrol and £1,142.60 for diesel cars.

To compile the data, researchers looked at the cost of car insurance, breakdown cover, MOT fees, average annual fuel costs for each area and vehicle excise duty (VED). 

While breakdown cover, MOT fees and VED were consistent across the UK, there are wild fluctuations in the cost of petrol, diesel and insurance.

Manchester: expensive car insurance

Expensive place to own a car

The cost of car insurance is the big issue for drivers in Manchester. At £1,638.51 per annum, the cost of cover is around £1,000 more expensive than in the cheapest area.

Conversely, petrol shouldn’t break the bank, with drivers in Manchester paying an average £908.43 for fuel – the seventh lowest.

Predictably, large cities dominate the top half of the table for expensive car insurance, with drivers in Manchester paying £1,638.51 a year. Next up is Birmingham (£1,572.19), followed by Bradford (£1,571.65), Luton (£1,545.43) and Blackburn (£1,522.97).

On the flip side, drivers in urban areas tend to pay less for fuel than drivers in rural outposts. 

Comparethemarket, the company behind the data, produced a separate set of results for London. It found that drivers in the City of London are paying the most to run a car, while motorists in Richmond and Kingston are paying the least.

Most expensive places to run a petrol car (excluding London)

AreaTotal cost (petrol cars)
1. Manchester£2,808.63
2. Luton£2,743.25
3. Birmingham£2,736.49
4. Bradford£2,706.94
5. Blackburn with Darwen£2,673.96
6. Pendle£2,651.59
7. Oldham£2,647.96
8. Rochdale£2,641.63
9. Liverpool£2,626.55
10. Sandwell, West Midlands£2,625.84

Least expensive places to run a petrol car (excluding London)

AreaTotal cost (diesel cars)
1. Carrick, Ayrshire£1,958.72
2. Exeter, Devon£1,975.70
3. Torbay, Devon£1,990.77
4. East Dunbartonshire, Scotland£1,995.08
5. East Renfrewshire, Scotland£1,996.86
6. Weymouth and Portland£2,001.33
7. Aberdeen City£2,003.53
8. South Hams, Devon£2,006.20
9. Restormel, Cornwall£2,010.73
10. South Gloucestershire£2,015.12

Figures used: breakdown cover (£36.84), MOT (£54.85), VED (£170).

Men far more likely than women to commit driving offences

Car cloning problems for second-hand buyers

Men are nearly twice as likely to receive a motoring conviction than woman, new research shows.

Using insurance quotation data, the study found that 65 percent of convictions were from men, while 35 percent were from women.

Men are also two and a half times more likely to have a drink-driving conviction than women.

But drink-driving isn’t the most common conviction. That ‘honour’ belongs to speeding, accounting for 65 percent of all declarations. Driving uninsured is next on seven percent, while drink-drivers are responsible for five percent of offences.

Dan Hutson, head of motor insurance at CompareTheMarket, the company behind the research, said: “During 2012, the rules were changed by the EU so that insurance premiums could not be based on gender.

“However, this clearly shows that many male drivers are not doing themselves any favours and goes someway to demonstrate why men could still be paying more for insurance than women on average. Convictions on your driving record could have a serious impact on the premium you could be quoted. Poor and unsafe driving practices are rightly having a punishing impact on the cost of running a car.”

‘Surrey’ seems to be the hardest word

 

Drivers with a motoring conviction are most likely to be found in Surrey. Last year, 83,230 people (seven percent of the county’s population) reported a driving conviction when arranging insurance cover.

It’s a similar story in Lancashire, where seven percent of the population hold a motoring conviction, followed by Cheshire (6.7 percent), West Yorkshire (6.5 percent) and Rutland (6.4 percent).

Revealed: the shocking ways drink drivers avoid the police

Looking at drink-driving convictions – which is about to become topical during the lead up to Christmas – Lancashire’s drivers are the worst offenders, with the county accounting for six percent of the country’s convictions.

Lancashire is followed by Cheshire, Cornwall, Shropshire and Northumberland.

Don’t hide your motoring conviction

According to Moneysupermarket, a speeding offence adds around £72 to the cost of car insurance, making it tempting for drivers to ‘forget’ previous convictions.

A conviction doesn’t need to be a driving offence – statistically, convicted drivers are more likely to be involved in an accident. Some insurers will consider such drivers too high-risk to insure.

Moneysupermarket says: ”Don’t be tempted to hide your conviction just to get a cheaper quote. If you don’t reveal convictions, you could invalidate your policy, meaning that any claims would be refused and you would essentially be driving while uninsured.”

 

 

Haggling

Want to save money on your car insurance? Get haggling

Calling your car insurance company to haggle can save you hundreds

Haggling: you’re either good at it, or you’re not. But when it comes to car insurance, a little negotiation could go a long way. That’s according to market research agency Consumer Intelligence.

It found that despite the average cost of an insurance premium rising, haggling with your existing provider at renewal time could still result in a lower price.

A staggering one in five motorists who haggle are offered lower premiums by their existing insurer, who will frequently match the best prices quoted elsewhere.

It’s never been easier to search for alternatives to your current insurance provider. Price comparison websites do the majority of the legwork, leaving you to select the most appropriate deal (or arm yourself with alternatives ahead of calling your car insurance company).

It’s particularly galling to see your current provider on a price comparison site offering a lower price exclusively for new customers.

Be prepared to haggle

However, if Consumer Intelligence is to be believed, it pays to contact your insurer to see if they’ll match the prices offered elsewhere. Ian Hughes, chief executive of Consumer Intelligence, said: “Haggling with insurers clearly pays, as drivers who make the effort to negotiate are finding.

“Insurers are generally receptive to renewal premiums being queried and will offer reductions to try and keep customers. It’s always cheaper to keep a customer than find a new one.

“When premiums are rising and other people are haggling successfully there really is no excuse for not haggling or shopping around.”

Data from Consumer Intelligence’s Car Insurance Index shows it’s younger drivers who are paying the highest bills, with under-25s the worst hit. Young drivers can achieve a more affordable price by taking out a telematics-based policy.

The message is clear: learn some haggling tips from Bargain Hunt and you could save money on your car insurance. Release your inner David Dickinson for the real deal.

The modifications that can REDUCE the cost of car insurance

Towbar

We’re often told to avoid making modifications to our cars in case it increases the cost of insurance. But some mods will actually reduce your annual premium.

Indeed, some could save you up to 24 percent – while others will have the reverse effect, adding 26 percent to a premium.

Fit a telematics device – also known as a ‘black box’ – and the cost of car insurance could drop by around a quarter. The device records your speed, distance travelled and the time of day or night you’re on the road.

Fitting a tow bar will have the same effect, resulting in an average 24 percent price reduction. But be warned: the savings could be offset by the price of a tow bar, which will cost around £450.

Dashcams are a more cost-effective solution, shaving 15 percent off the price of a premium, but costing around £25 to buy.

Meanwhile, parking sensors – while costing an average £158 – should see a reduction of 13 percent. A roof rack has a similar effect on car insurance, but the savings could be outweighed by the impact it has on your fuel economy.

These are the findings of Crusader Vans, which looked into the aftermarket industry, as well as sales data, to find the best modifications to cut your car insurance premium.

The modifications to avoid

Modified cars and car insurance

It’s common knowledge that performance and cosmetic upgrades can have a negative impact on the cost of car insurance, but there are some other, more surprising, modifications in the research.

A car phone costs £50 to install, but could increase the cost of instance by as much as 26 percent.

Meanwhile, tinted windows, an LPG conversion and a sat-nav could result in higher premiums, but much will depend on the insurer. As such, you should speak to your insurance provider before making any modifications to your vehicle.

Car modifications can have a serious effect on the cost of car insurance. Some could increase the risk of an accident, while others will make the car more appealing to thieves.

In 2016, Moneysupermarket.com analysed 2.3 million vehicles to show the effect each type of modification has on the cost of car insurance. The results were startling, if unsurprising.

Turbocharging, supercharging and nitrous added 132 percent to the premium, making such upgrades by far and away the least cost-effective performance modifications. Bonnet bulges and flared wings added 66 percent, while a complete bodykit added 57 percent.

Even brakes, which should improve the safety of the vehicle, resulted in an average 36 percent increase in the cost of cover.

It’s worth noting that accessibility modifications can have an impact on the cost of insurance. The research found that wheelchair adaptations add 69 percent to the premium, while hand controls add 57 percent.

If in doubt, talk to the insurance company. And remember, if the change alters the original factory specification, it’s likely to be classed as a modification.

Car insurance admin fees are hitting motorists in the pocket

Car insurance admin fees rising

As if the rising cost of car insurance wasn’t enough, motorists are also facing a dramatic rise in admin fees.

New research shows that, since 2012, the cost of making a mid-term adjustment to a policy has risen by 38 percent to an average of £28.25. A material change could include altering a name, address or occupation, or adding or removing a named driver.

Meanwhile, cancellation fees have risen 49 percent over the same period, with the average charge now standing at £60.85. Insurers are legally required to give a 14-day ‘cooling-off’ period, but an administration fee may still be applicable.

Thirty-eight percent of insurance companies even charge a set-up fee for new policies – up from 12 percent in 2012. Motorists are being charged an average £37.63 to cover the cost of arranging a policy.

‘Fees should be proportionate’

The cost of car insurance admin fees

Lee Griffin, founder and CEO of GoCompare, the company behind the research, said: “The car insurance market is highly competitive, so rather than incorporating the costs of certain admin tasks into the basic premium, some insurers make other charges.

“This helps keep premiums down by ensuring that only the policyholders who change or cancel their policy, for example, pay for the additional work required to administer their policy.

“Insurers should be upfront about any admin fees they charge. These should be clearly set-out in their terms and conditions, so drivers are aware of the full costs before signing-up to a policy. Fees should also be proportionate to the cost of the company of undertaking the work.”

Motorists are advised to challenge their insurance company if they think they’ve been charged a disproportionate amount for cancellation or a mid-term adjustment. Some companies may reduce or waive the fees if it means retaining a customer.

If the fees weren’t declared prior to the policy being agrees, a customer can ask the Financial Ombudsman Service to review the case.

Car insurance admin fees overview

  • Adjustment fee: £28.25 (up from £20.51 in 2012)
  • Cancellation fee: £60.85 (up from £40.95 in 2012)
  • Set-up fee: £37.63 (up from £20.66 in 2012)
  • Duplicate documents fee: £13.85 (down from £18.58 in 2012)

Are you paying too much for your car hire excess insurance?

Car hire companies

Only 29 percent of motorists questioned in a new study were aware they could take out a car hire excess insurance policy BEFORE they left the UK.

Holidaymakers face excesses of £500 to £2,000 in the event of an accident, with the amount pre-authorised on a credit card for the duration of the hire period. Excess insurance can be arranged at the rental desk, but it comes at a cost.

Arranging excess insurance in the UK is often cheaper than paying for an expensive, but similar, hire car company policy abroad.

The cost leaves many travellers disgruntled, with 70 percent of the motorists surveyed by the RAC describing the excess insurance offered by rental firms as “expensive”.

It’s little wonder, then, that 17 percent of British holidaymakers admit to risking it and not taking out one of the hire car company’s policies. Of those who ‘risked it’, 23 percent said they were worried about the consequences of having to pay such a large amount on their credit card.

‘Usually very costly’

Car hire excess insurance cover

RAC head of insurance Marcus Latchford said: “While rental agreements in Europe generally include collision damage waiver, theft and third-party liability insurance, customers also have to decide whether or not to protect themselves against the large damage excess amount that is temporarily held on their credit card while the car is on hire.

“Taking out the rental company’s excess insurance policy is usually very costly which leads to many travellers just taking the chance that nothing bad will happen to their hire vehicle and the excess will not be charged to their card.

“By far the best course of action is to take out specialist insurance to cover the excess amount and any additional damage repair costs incurred via a specialist policy bought in the UK. The trouble is not enough people realise this is an option so they end up losing out financially by buying expensive hire car excess insurance policies, often with a lower level of cover.

“We need to make people aware that very affordable UK alternatives exist so it becomes second nature to take out a policy before travelling.”

The RAC has launched its own car hire excess insurance, with cover available from £2.99 a day or £42.99 for an annual policy. In contrast, rental companies charge an average of £9 a day for similar cover.

How to ensure a successful car insurance claim

How to ensure a successful car insurance claim

Around 43,000 car insurance claims are turned down every year, leaving motorists out of luck and out of pocket. 

Conversely, insurers pay out just under £22 million for private car insurance claims every day, which equates to just under £3,000 per claim. 

If you want to avoid being one of the two percent of motorists who have their car insurance claim rejected, take a look at these five ways to ensure a claim doesn’t get turned down.

Buy the right policy

Not having the right cover in place is one of the most common reasons why car insurance claims are turned down. Don’t just buy on price – make sure you consider all your needs. For example, if you drive to work, make sure the policy includes commuting.

The claim value being below the policy excess is another reason why claims are rejected. Be sure to check your voluntary and complusory excesses before arranging cover.

Read the small print

car insurance claim form

It’s always tempting not to read the small print, but you could be missing out on what isn’t covered by the policy. The policy document will outline any procedures you need to follow, such as notifying the insurer if you change your job or move house.

Modifying your vehicle could invalidate the policy, so notify your insurer if you fit a towbar. Similarly, if you exceed your agreed annual mileage, you’re at risk of having your car insurance claim rejected.

Secure and maintain your car

Insurers expect drivers to take steps to prevent accidents, theft, loss or damage. A theft claim will be rejected if the key has been left in the ignition or the driver is found to have been under the influence of drink or drugs.

A car insurance policy is invalid without a current MOT certificate unless the vehicle has been declared SORN and the policyholder has arranged laid-up cover.

Act quickly and follow the procedures

Car insurance Brexit

In the event of a claim, follow the procedure outlined in the policy document and report losses promptly. The insurance company will guide you through the claims process and deal with a third party on your behalf.

Be sure to write down anything relating to an accident; dashcam footage and photographic evidence can be extremely useful in the event of a claim.

Be honest if you want a successful car insurance claim

Don’t bend the truth when arranging cover or making a claim. Providing incorrect information or omitting details could invalidate your insurance, as could exaggerating the value of a claim.

If an insurance company finds that you have been dishonest, they are entitled to decline the entire claim.

‘Insurance is complex’

Matt Oliver from GoCompare, the company behind the car insurance advice, said: “Insurance is complex, but when applying for cover, it’s essential to be honest, and take the time to read through the policy details to make sure it covers everything you need and has excess levels you can afford.

“The information you give when applying for insurance is used to determine the cost of cover, so omitting information or bending the truth to get a cheaper deal could land you in trouble if you need to make a claim.”  

How to save money on your car insurance

How to save money on your car insurance

Car insurance is one of the biggest expenses associated with running a car, so it’s natural that you’d want to know how to save money on your annual premium.

No specific advice can guarantee a low premium for all, but here’s our general guide on how to – legally – save money on your quote. 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 bigger and more powerful the engine, the more expensive the insurance. Likewise, a more prestigious and expensive car will bump up the cost, as will any model considered an accident-magnet. Ask any new driver who tried to insure a Citroen Saxo after 2005.

If saving money on car insurance is your prerogative, food-blender-powered hatchbacks will be cheaper than gas-guzzling coupes. But for many reading here, that won’t matter. You have your car and simply want the cheapest quote. There is hope for you, though. Read on…

Shop around to save money

Too many are complacent about car insurance. We don’t put in the legwork, shop around, bounce between providers. That’s exactly what we should be doing to save money.

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

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, where the car is parked… All this and more comes in to play.

While you must tell the truth, there is leeway to be explored. Your career for instance, can be listed in a number of different ways. A photographer is a videographer is a multimedia assistant. A bricklayer is a builder is a labourer  and so on. 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 can affect your quote. Lower is better, in most cases.

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 premiums down.

Multi-car policies are interesting, however. Whether you’re living with your parents or have flown the nest, they can offer significant savings, saving you money on your car insurance.

Young drivers can also get on their parents’ policy – fully-comp, with the ability to earn a no-claims bonus – for potentially a lot less than insuring themselves. Likewise, if you live with a partner and you both drive, it’s definitely worth checking whether you can share a multi-car policy.

Get a black box to save money

It’s not the most elegant or convenient of solutions, but having a black box watching your every move behind the wheel often prompts insurers to charge you less. It’s become a mainstay of the newly-passed young driver.

Move somewhere cheaper

car insurance

Location is a big factor in the cost of car insurance. Maybe 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.

All thanks to the no-claims bonus that 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 all else fails and 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, they ask how long you’ve had your licence when totting up quotes.

How not to save money on your car insurance…

Car insurance

Don’t lie on your policy, about anything – simple as that. Don’t lie about modifications, the miles you’re doing, where you live, what you do, where the car is parked and so on.

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