How to reduce your car insurance premium

Car insurance is one of the most expensive costs associated with owning a car. In the UK, it is a legal requirement to have any roadworthy vehicle insured. If you have a crash or accident, your car insurance policy is there to provide financial protection for that added peace of mind. There are many simple ways in which you can save money on your car insurance premiums that many people don’t know about. There are many factors that affect the cost of your car insurance including personal details and information about the car you drive. Refused Car Finance look at the ways in which you can cut costs of your car insurance premium. When applying for car insurance, it’s important that all your information is accurate and up to date. There are many myths about car insurance and how you can reduce your costs but some of these are actually illegal. Filling out your application with the information that isn’t actually true to reduce your premium is fraud and can land you with penalty points and a hefty fine. Let’s take a look at some of the legal ways in which you can bring your car insurance down whilst also making sure you have the cover you need.

Shop around

This is one of the biggest things that we encourage. You should always try to compare different rates and premiums. Many online providers allow you to compare car insurance and then choose the cheapest one that’s right for you. This is one of the easiest ways to save money on your premium. You can also use quotes from comparison sites to take to your current provider if you aren’t happy with their renewal price and see if they can match it.

Choose your car wisely

Each car in the UK is assigned to a car insurance group. The groups are used to identify cars which are cheaper and more expensive to insure on average. The groups range from group 1 (which is the cheapest) to group 50 (which tends to be the most expensive). There are a few factors which affect the insurance group which include the value of the car, repair costs, theft rates, car security, performance and more.

Increase your excess

Your excess is the amount you agree to pay if you make a car insurance claim and protects yourself and other drivers if you are involved in an accident. You only need to pay the excess though if you are to blame for any damages within your claim. The compulsory excess on a car insurance policy is the amount decided by the car insurance company that you must pay in the event of a claim and the voluntary is an optional excess you put on top of your car insurance. Having a higher voluntary has statistically been shown to reduce your overall insurance premium.

Choose the number of drivers carefully

It’s a common misconception that naming anyone and everyone as a driver on your car insurance policy can lower it. However, this is not always the case. For young people or first-time drivers, it can be beneficial to have a family member or friend as a named driver. More experienced drivers tend to get better rates so naming one on your policy could lower it but make sure they don’t have any points or driving convictions. On the flip side, having too many drivers named on your policy can cause it to increase, this because many different people will be driving your car and some may be more likely to be involved in a crash than others.

Pay annually

Not everyone will be able to pay for their car insurance in full at the beginning of their policy, for some young drivers their policy will be way over £1,000 which can be a lot to fork out. However, paying monthly for your insurance will usually include an interest rate on top. This is because the insurance company are basically agreeing to cover you for the year before you’ve even paid a penny! It may be more affordable to pay monthly, but some insurance can hit you with interest of up to 20% each month.

Reduce your mileage

When you fill out a car insurance application, you will be asked for your predicted mileage for the year and you should be sure that you are accurate with your mileage estimation. If you make a claim and your mileage doesn’t match up to your policy, then the insurance company can refuse to pay out. Driving a reduced number of miles can help your insurance costs come down. Drivers who use their vehicle for work, such as taxi drivers, can’t avoid high mileage and their premiums may be more expensive.

Keep your car safe

Having added security on your car may lower your premium as it already has added protection against theft or accidents. Your car insurance application may ask if you have any additional security such as immobilisers, alarms and wheel locking nuts. May drivers are also opting for dash cams as some insurance providers offer discounts for having one. Dashcams can be used in the event of an accident to sow exactly what happened on the road and who is at fault.