Car insurance – How to get the best deal

The cost of car insurance has risen steadily over the last few years. Are you making the most of online comparison sites, best buy articles and insurance brokers? Follow our five simple steps and you could save yourself hundreds of pounds by getting the right car insurance.

1. Lower your risk

Cheap car insurance is not necessarily the best car insurance but there are a number of things you can do to lower your insurance risk and push the price of your car insurance down.

Make your car more secure

Top tip

Call BIBA (0870 950 1790) to get an insurance quote. If you have special circumstances they can help put you in touch with a specialist broker. Always seek more than one quote before you make your final decision.

  • Park in a garage or driveway if possible.
  • Fit an approved alarm or immobiliser.
  • Make sure security devices are Thatcham approved.

Find out more about security on the Thatcham website

Drive an average model

  • Choose a make and model from a low insurance group for a lower premium.
  • Insurers prefer popular models which are not as expensive to repair.

Be accurate about your mileage

  • The lower your annual mileage, the lower your premium. However, don’t underestimate your mileage as this could invalidate your insurance when making a claim.

Drive safely

  • Prove that you are a low-risk driver – some insurers will give you a discount if you have taken a Pass Plus or advanced driving course. Find out more about Pass Plus on the GOV.UK website
  • Insurance claims or points on your licence will increase your premium.
  • Consider getting a policy which includes an assessment of your driving with telematics (‘black box’ technology). If you can prove you are a careful driver, this could result in a lower premium.

Add a second driver

  • Smooth out the risk by adding a second, low-risk driver – even if they don’t use the vehicle much. (Adding newly qualified young drivers will increase the premium.)
  • Don’t break the law by pretending the second driver is the main driver.

2. Lower the price

There are a few things you can do which might lower the price of your car insurance.

Insurance Premium Tax rise

The Chancellor announced a rise in the Insurance Premium Tax from 9.5% to 10% in his Budget 2016.

Pay for your car insurance annually, not monthly

  • Check with your insurance company because sometimes you are charged interest if you pay by instalments.
  • You could save up to £125 on a £700 premium by paying annually. (Source: Which?)

Don’t pay for what you don’t need

  • Consider the cover you have under other insurance policies or elsewhere. For example, some bank accounts include car breakdown cover.
  • Sometimes your insurer or broker may try to sell you add-ons, like legal expenses cover. You may be able to get these products more cheaply elsewhere, or you may not need them at all.

Considering buying breakdown cover separately

  • If breakdown cover is included in your car insurance, check the price and the level of cover – you may find better cover for the same price or less elsewhere.

Protect or increase your no claims bonus

  • When changing insurers, make sure you can carry over your no-claims bonus.
  • Consider paying an extra premium to protect your no claims bonus, if you haven’t claimed for five years or more.

Think about adding a voluntary excess to your car insurance

  • Add a voluntary excess to your compulsory excess to lower your premium.
  • Remember you’ll get less back if you make a claim (after both voluntary and compulsory excesses have been deducted) so you need to be able to afford it.

For example

Imagine you reverse into a bollard and do £300 worth of damage to your car. If your excess is £150, then your payout would be £150. But if you claim, you will lose your no claims bonus and push up the price of your premium.

Are you likely to claim?

If not, you might as well increase the excess (providing you can afford to) and pay less for the policy. Also, remember that unfortunately, even if you don’t claim you do have to tell your insurer that you’ve had an accident and your premium may go up as a result.

3. Shop around

The more time and research you put in to obtaining quotes, the more likely you are to get a better deal This is especially important if you are over 70 or under 25, and at the first year renewal when premiums can go up significantly.

If you have the time, get quotes from at least two comparison sites and use insurers and brokers that don’t feature on comparison sites. Remember, cheapest is not necessarily best. Get the right cover or your policy will not pay out when you need it.

See MoneySavingExpert’s guide to using comparison sites for car insurance quotes (now owned by MoneySupermarket)

Read our guide – How to buy insurance using comparison sites

Compare like for like – if you’re only looking for fully comprehensive deals, you can use the Defaqto comparison system.

Compare car insurance policies on the Defaqto website

Try a broker to see if they can get the same cover at a lower price – it’s free to ask.

Find a broker from the British Insurance Brokers’ Association

Don’t have much time?

Use best buy tables to compare policies from a few reputable insurers.

See the Which? best buys for car insuranceopens in new window

Under 25?

Car insurance for young drivers – top tips

4. Check the policy

Read the Key Facts and Policy Wording documents. Otherwise, you won’t know if you’re getting the right cover. If you are renewing a policy with the same insurer, it’s up to you to check if the terms and conditions have changed.

5. Ask for a discount

Go back to your current insurer and ask them to beat your best quote.