Can We Really Save Money on Car Insurance?
If you want to drive a car on UK roadways and motorways then by law you are required to have car insurance. Car insurance is mandatory to drive here, and in many other countries as well.
When you buy a car, one thing you need to take into account and budget for each month, besides petrol, maintenance, and repairs, is the cost of the insurance on the vehicle. And this insurance expense may not be cheap.
According to the Association of British Insurers, the average cost to insure a car went down in 2018, and was £477 a year.
Of course this is just an average, if you look at the cost for young drivers, this figure soars considerably.
The Assistant Director, Head of General Insurance Policy at the ABO, Mark Shepherd said, “This annual fall is good news for millions of UK drivers after a few years of rising premiums, that reflected, in part, rising vehicle repair costs, a weaker pound, and uncertainty around the reform of personal injury compensation. Implementing the provisions of the Civil Liability Act will be crucial to delivering a fairer compensation system for claimants and continued competitive premiums for motorists. Despite reports suggesting premiums are going up, what we actually saw was an overall fall in the average motor premium paid in 2018, with the seasonal rise in quarter four premiums lower than normal.”
While this reads and sounds good on the surface, if you are a young driver, or a new driver, car insurance can cost you more than the value of your car!
If your insurance has a premium of £1200 a year, that adds another £100 a month to the cost of operating the car.
So, are there really ways to save money on car insurance….yes there are.
The first two (2) ways to save are big ones:
* Shop around: It should go without saying, but we will say it anyway, shop around with different insurers, get quotes, even use comparison web sites to get the best price on your car insurance.
There can be reductions one insurer may offer over another, and the differences in pricing can vary. So shop around.
* Chose the right car: Picking and buying the right car is also very important. Insurance premiums will vary according to make and models of cars, and if you buy an expensive model car, or one that is known to be expensive to repair, this will be reflected in your costs.
Another way to save, which may not be for everyone:
* Pay upfront: By paying your full annual premium upfront you can save a couple of hundred pounds due to the fees and charges of paying monthly.
In some instances it can be cheaper to take out a loan, depending on the interest rate, and pay the insurance upfront, and pay the loan payments.
Other ways to save are:
* Your mileage: Don’t just guess at the number of miles you drive in a year, know the figure, and try to keep your mileage down and not go over what you state.
The more miles you drive each year, the higher your premiums can be.
Underestimating can be just as bad as it ay invalidate your policy should you need to file a claim.
* Raise your excess: This can be tricky to do, and you need to carefully think this one through.
The higher your excess is, the lower your premiums can be, however, you need to be able to cover the excess should you need to file a claim and have your car repaired.
* Technology and “black boxes”: Many insurers offer discounts if you have your car fitted with a black box or telematic system installed.
These systems give immediate feedback on how you are driving, and can save you money if you are a good driver, but they can cost you money if you are not a good driver.
Some insurers offer discounts if you have and use a dashcam in your vehicle. Again, the technology can provide feedback and also show how you drive, and who may be at fault should you be involved in an accident.
There are other ways to save as well:
* Multi-car discounts
* Choosing the correct job title, some job titles receive lower insurance premiums.
* Adding a second driver on your policy, someone who is older and has a good driving record.