Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
How to get the best value car insurance: Our comprehensive guide
Moneymagpie Team
19th Mar 2019
Yes, car insurance can cost a fortune, but if you’re savvy you can get some truly mind-blowing deals. We’ve created this guide which will show you what to look out for when getting your vehicle insured.
For advice on getting car insurance specifically as a young driver or if you’ve ever been banned from driving stick with this guide. There’s a dedicated section for both young drivers and those previously banned from driving further down.
WHAT TYPE OF COVER SHOULD YOU GO FOR?
There are three main types of car insurance cover:
- Third party: this is very basic cover that only covers damage that you (or your passenger) cause to another person or property. It doesn’t cover you against any damage to your vehicle (or yourself)
- Third party, fire and theft: as above, but this cover will repair or replace your vehicle if it’s damaged or destroyed by fire or stolen
- Comprehensive: this extends third party, fire and theft to also cover damage to your own vehicle should you have an accident.
Is third party cover always cheapest?
People automatically assume that basic third party cover will be the cheapest option – but this isn’t always the case (some insurers probably see drivers who only get third party insurance as being less likely to care about their vehicle and more likely to get into scrapes).
Shop Around
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 get cheaper car insurance.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’re 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. Compare like for like – if you’re only looking for fully comprehensive deals, you can use the Defaqto comparison system. You could also try a broker to see if they can get the same cover at a lower price – it’s free to ask.
Remember once you find a deal anywhere, go back to your current insurer and ask them to beat your best quote.
BUY AN OLD CAR
If the car you buy is old, it eliminates the need for collision coverage. This is the coverage you pay for any damage you caused to your vehicle, and it makes up a big chunk of the insurance costs. By the way, we have heard vintage cars last longer than the modern heap.
Although alternatively you have to take into account that it’s also a great idea to drive a make and model from a low insurance group. Choosing a make and model from a low insurance group will mean a lower premium. Insurers prefer popular models which are not as expensive to repair.
Make your car more secure
- Fit an approved alarm or immobiliser.
- Park in a garage or driveway if possible
- Make sure security devices are Thatcham approved.
- Find out more about security on the Thatcham website.
DRIVE CAREFULLY AND LESS
Do you know that safe drivers get rewarded with affordable premiums? Therefore, drive safe and less. Avoid speeding and do stay out of accidents. This will help you save 5% and more on your premiums. Most company will cut off the insurance rate if you avoid traffic violations for a given period. The time will be mentioned on terms and conditions, do read them!
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. 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’re a careful driver, this could result in a lower premium.
One more thing, let your insurance agent know if you are the infrequent driver. The less time you spend on the road means fewer chances of an accident. This also helps to lower your premium. So, makes sure you tell the agent about your traveling habits if you are a carpooler, or you perhaps take the subway a few days of the week. It can also win you low mileage discount.
Add a second driver
Smooth out the risk you incur by adding a second, low-risk driver – even if they don’t use the vehicle much. Remember not to break the law by pretending the second driver is the main driver.
SKIP MONTHLY BILL PAY
High insurance costs might make monthly bill-pay an attractive option, but you pay for the convenience with an add-on fee. So, avoid these extra charges, and get billing every 6-12 months. Ask for auto-billing to save even more money.
In case you get nervous from large bills, set up the monthly bill-pay. Divide the premium by twelve and deposit the amount into a savings account every month. This will make sure you have the money ready in time.
Pay for your car insurance annually, not monthly.
FORGET ROADSIDE AND RENTAL COVERAGE
Insurance plans come packed with a lot of extra features. But you don’t need most of them. Yes, you don’t need roadside assistance and car rental coverage. Therefore, you should go over the insurance policy line by line and remove stuff you don’t need.
If breakdown cover is included in your car insurance, check the price and the level of cover – you might 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.
ONE COMPANY
If you want to save money on car insurance, it’s important that you group all policies including home, auto, health, etc. Buy them all from only one company and earn a multi-line discount. This can help you take off 10%-20% of your premium. This is a slightly different approach to finding the best deal on various different strands of insurance, but it can also work. The only way to know is by doing the calculations yourself. It does often pay to switch, remember that.
You can save hundreds by consistently swapping insurer!
WORK ON YOUR CREDIT SCORE
Your credit score is important for determining the overall cost of your premium. To make sure you get the best deals possible, make sure you pay your bills on time. If you believe your score is not good enough, then wait and work on it before getting your new car.
BUY A HYBRID
Insurance companies offer discounts and perks if you buy a hybrid or any other alternative fuel car. So talk to the insurance agent and see what options they have available. This is a great way to save money and also do your bit for the environment. Hybrids will be taking over in the next 30 or so years, so you may as well get on board now!
Now for some more specific advice for young drivers and those with a ban.
Get a “Pay-Per-Mile” Policy
It’s now possible to get “pay-per-mile” car insurance. I.e. you pay a fixed upfront cost to cover your car for the year while it’s parked and then after that you just pay for the miles you drive.
If do less than 7,000 miles a year then make sure you get a pay-per-mile car insurance quote to see if you can save.
To find out more – read our review of pay-per-mile car insurance.
GETTING A GOOD INSURANCE DEAL AS A YOUNG PERSON
Getting cheap car insurance for young drivers is a huge challenge. Young drivers insurance costs an average of over £1,100 for a fully comprehensive policy. Since young drivers aged 18 to 24 are considered the riskiest on the road, and therefore more likely to make a claim, it’s no secret that they tend to pay more for their insurance. For a comprehensive guide take a look at our detailed article.
Here is a key tip:
The best way to reduce the premium you pay: by getting car insurance based on ‘black box’ technology. ‘Black box’ insurance involves having a monitoring unit invisibly fitted to your car (it’s normally located underneath the dashboard) which monitors your driving behaviour (your braking, acceleration, cornering, speed and so on). It’s not a million miles away from the infamous black boxes that are used in aeroplanes.
All this data is then used to calculate your insurance premium; smooth driving will result in lower premiums, while someone who frequently jams on the brakes and goes round corners on two wheels will see their premiums rise significantly.
Put aside 15 minutes and try the MoneyMagpie car insurance comparison tool. It’s quick, easy to use and compares all the top providers.
GETTING A GOOD INSURANCE DEAL IF YOU HAD A DRIVING BAN
It’s not easy to get car insurance after a driving ban, but it is certainly possible. Car insurance after a driving ban can be an ordeal to get and it can feel like you’re being punished twice. When the ban is up you’ll probably feel like you’ve paid your dues and be keen to get back on the road as soon as possible. See our complete guide here.
Here are some tips:
Conviction severity is certainly a factor – you are likely to find it easier to get insurance if you were banned for speeding than for drink driving.
There’s something called ‘good faith’ which is a duty that you have to disclose all material facts to the insurance company. Material facts are facts that are so important that their disclosure would change the decision of an insurance company in terms of:
- changing the premium offered,
- their decision whether to cover you
- or the details of settling a claim.
Speak to your previous insurer! A mainstream insurer is more likely to cover a convicted driver if there’s a previous relationship with that individual. So the first sensible move is to try your former insurer, particularly if you had a good record with them before/ were with them for some time.
If you’re careful to keep a clean record, after 3 years the ban will be considered a lot less significant and your premiums should come down. After 5 years it’s effectively irrelevant (unless you served a custodial sentence).
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