Car insurance is one of those things we all need. Yet it's also one of those things you hope never to use! Insurance premiums are near record high levels, so it makes sense to find ways of reducing your premium. So here are my top tips on how to keep those insurance premiums down.
1) Named drivers
Believe it or not, adding an extra driver can reduce your premium, because sharing the car reduces the risk for insurance companies. This works particularly well for young drivers, because having an experienced parent on the policy makes it a safer bet for them. Don't be tempted to put yourself as the policyholder and the child as the named driver if it's their car though - this is called "fronting", and it's illegal. Conversely, too many people, or higher risk drivers can increase the premium, so try different combinations.
2) Cover level
Even more surprising is that a higher level of cover can actually prove to be cheaper! Choosing fully comprehensive cover instead of third party, fire and theft is seen by many insurers as a sign of a more sensible driver. So, check the different cover levels before you choose your policy.
3) Shop around
Never, ever, renew your policy without shopping around, because you can usually beat it by going elsewhere. There are several comparison websites (moneysupermarket.com, https://www.comparethemarket.com/car-insurance/ and confused.com) which compare hundreds of quotes in one go, so there's no excuse for not checking those. If you want to stay with your current insurer, call them with details of your best quote from elsewhere and see if they'll match it.
Insurance costs are based on risks; the more you drive, the higher the risk. So, the higher your annual mileage, the more your premium is likely to cost. Don't massively overestimate your mileage when buying a policy - there's no point paying for 20,000 miles a year if you only do 10,000. However, don’t try and guess your mileage as it is important to be as accurate as possible.
5) Protected no claims bonus
It costs a little extra to protect your no claims bonus, which you can usually do after you accrue 5 years. However, it prevents you losing it in the event of a claim and will save you money in the long run.
Setting a higher excess (the first part of a claim that you pay for) reduces the insurer's costs if you claim, so if you're willing to risk having to fork out more in a claim, it can mean a lower premium. Don't set it too high though, because it will hurt if you do need to claim.
7) Black box
Many drivers are suspicious about insurers fitting a black box to their car, otherwise known as "telematics". This monitors your driving style, how well you keep within speed limits, where/when you drive and how many miles you drive, and rewards you with lower premiums, and sometimes even a credit back if you drive safely. Some black boxes also act as trackers if the car is stolen, which insurers love.
8) Pay up front
If you can afford to, pay up front for your policy rather than paying monthly. Monthly payments mean that you take out a credit agreement, which you'll usually have to pay interest on. It might even be worth using a 0% credit card if you really do need to pay monthly.
9) Mid-term changes
Mid-term changes or early cancellations attract hefty "admin fees", so avoid too many of these if you can. Perhaps wait until the end of your policy year to change your car, for example. But equally, you must tell your insurer if there are changes, so don't hide things from them to save a bit of money, because it could leave you without cover when you most need it, or even see you being investigated for fraud.
Increasing your car's security can lead to cheaper premiums. Whether this is by fitting extra gadgets such as an alarm, immobiliser or tracker, or by keeping it in a locked garage or on the driveway rather than the road, taking good care of your car will mean that your insurers want to take better care of you.
So, there are a few things to try, which might just help you save some money on your car insurance at renewal time. But bear in mind that these are all honest tips to use to suit your circumstances, so never lie to insurers just to try and get a better deal, because it will only lead to problems later down the line.