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| How to Cut the Cost of Car Insurance |
Less desirable and low value cars are cheaper to insure
When
I was 17 I wanted to own a Ferrari and live life in the fast lane. Even
if I could have afforded the car, then I couldn't have afforded the
insurance to cover it. At 17 you are brand new to the world of driving
and statistically you are more likely to make an insurance claim. Mixing
high-powered cars with inexperienced drivers is not something car
insurance companies are super-keen about, the chance of a claim shoots
through the roof with the price of the premium following it. When you
are young and inexperienced, buy a low-powered, low value car to try and
keep your car insurance premium to a minimum. If it is worth less then
it will cost less to fix/replace when in your youthful exuberance you
crash it. The same logic actually applies to everyone, the lower the
value of the vehicle and the lower the car insurance policy will be in
most cases. Sports and premium cars will always cost more to repair in
an accident so the insurance will reflect this. New cars now feature
myriads of anti-theft and driver aids that in many cases will help to
reduce the cost of insurance so keep an eye on the spec sheet when
looking at a new car. A good rule of thumb is that less desirable and
low value cars are cheaper to insure.
Age is a concern
I
mentioned it above and it bears repeating. Generally the younger you
are the higher your car insurance premium. This is down to inexperience
and the youthful belief that bad things will never happen to you. The
statistics say otherwise, which is often a shock to an unsuspecting
young driver who ends up in a crash wondering how it happened to
him...Driving experience and age are usually linked and that leads to a
method of reducing your insurance premium - whatever age you are you
will benefit from advanced driving courses and many car insurers offer
discounts for these qualifications. It may only be a five - 10 per cent
saving for the course but on a premium of £1000 it's worth having the
saving and it will remain with you for years, so it should be a good
investment, not to mention make you a better driver.
Keep adding to the no-claims bonus
The
more years you can accumulate without making a claim the better as most
car insurers will offer a discount on your insurance for this.
Effectively you are proving you are good business to have and because
you haven't made any claims then you are a good risk for them to
underwrite. There's nothing you can do here but keep your nose clean and
don't make a claim. If you own a low value vehicle and dent it parking,
you'd be advised not to make a claim on comprehensive insurance because
it would reduce your no-claims bonus, likely to be for a small amount
of money and you may even end up paying for most of it depending on
excess. In that case, provided you have not caused damage to any other
vehicles or property, keep quiet, fix it yourself and your saving on
no-claims bonus will be sweet the following year - in time, when you
have built up three or more years no-claims bonus, you can actually
protect your bonus, meaning even if you make a subsequent claim you will
not lose your bonus.
Convictions aren't cool
If
you are an inner-city teenager then an ASBO may be a badge of honour.
Insurers are less impressed by convictions though, so it is best to
avoid them if you can. Minor speeding offences are certainly not in the
same category as serial killer though, so if you have a couple of points
it will not be the end of the world or have a major influence on your
premium depending on the insurer.
If you've got a garage, use it
What
are garages for? If you ask the average person they'll probably say for
storing all the kids' toys, the home gym, bicycles, the freezer and
tumble-dryer. I have news for you all; the garage is designed to house
your vehicle when you are not using it. The fact that it puts a physical
barrier between any opportunist thieves and your car is a real good
thing and car insurance companies will recognise this and reduce your
premium if you park in a garage overnight. Using your garage will save
you money; it doesn't get any easier than that.
Anti-theft devices
Most
modern cars come with immobiliser and alarms factory fitted and if you
notify your insurer it will check to make sure they are to approved
standards and will apply discounts if applicable. You can get other
devices that slosh around in the passenger footwell until you park and
then fix to generally your steering wheel or gear-stick. These are
mechanical devices and some do attract further discounts if used, just
do your homework before buying. Thatcham is the organisation which
grades security devices and generally a decent mechanical security
device will feature its Thatcham approval very prominently along with
any premium discounts you may expect, so choose carefully.
Use a reputable broker
Car
insurance is very big business with around 30million+ vehicles on the
UK roads, so there is a wealth of car insurance companies to choose
from. Ironically, the big names you are familiar with are probably in
your head because of massive marketing campaigns on television, on-line
etc. Regardless of the message, those marketing campaigns need to be
paid for and that means they may not actually have the best rates,
although the sheer scale of some of these businesses means prices will
be keen due to buying or underwriting power. The best advice is to
compare a couple of different prices from different companies. Call the
insurer and then call a comparable competitor and then perhaps a small
car insurance broker. Each one will ask you if you have a price already
and you should tell them what it is. Generally if they want the business
they know what to beat. The moment you get a broker saying they can't
match the price then you are probably close to the best market price or
else speaking with a broker that is not a specialist in the area.
A word of caution on price comparison sites
There
are plenty of price comparison sites around which promise to drive the
cost of your insurance policy down - Money Supermarket, Go Compare,
Confused etc. They certainly do help reduce the cost of insurance as
most of the major players are fighting for business on the same
platform. Where these price comparison sites do not perform so well is
actually advising you on the sort of policy that's best for you or your
car. Would comprehensive be cheaper and more suitable than third party
fire and theft? The point is you cannot ask the price comparison site
for any advice, that's where car specialist brokers have the edge.
Compare it to buying a new house, would you buy one without a survey?
You might and then when it subsides into the sea you'll be praying your
insurance will cover it...the point is you shouldn't buy insurance
without talking with an expert either.
Pick up the phone
The
internet is a great shopping and selling tool, you know my feelings on
that from previous articles...but I suggest if you speak to a real
person at a brokerage then you have a much better chance of getting cheaper car insurance.
They can ask more questions, clarify your requirements and if needed
they can even delegate the rate (set the price themselves) if they
really want the business. There is no substitute for human contact, just
make sure you speak to at least three different brokers to get a true
comparison.
Got a nice postcode?
If you
live in a postcode where there are few thefts and claims then your
insurance premium will be lower than living somewhere that is a known
crime hotspot. If you can afford it, move to a posh area and you'll
benefit from lower insurance premiums. Not the easiest way to save on
the cost of insurance for sure...
Mileage and use
The
more miles you drive the more chance you have of being involved in a
claim. It's simple statistics. The fewer miles covered, the less your
insurance premium should cost. Don't tell lies though, if you exceed the
stated mileage by a distance then it could invalidate your insurance.
Married with kids?
Insurers
like selling car insurance to married couples mortgaged and with kids
and jobs. You are very easy to credit check and generally display
responsible behaviour which hints at a lower risk for the insurer. That
can reduce your car insurance quote.
Don't modify your car
We
all see the bling bling cars that haunt Supermarket car-parks late at
night and whether you like the tacky neon colours and loud exhausts is
neither here nor there - the fact is that any sort of modification is
likely to hike your car insurance premium. Modifications can draw
attention, invalidate warranties and in the case of loud exhausts, can
also be illegal (if above the noise limit). If illegal, then it could
invalidate your insurance as well. The fact is that car manufacturers
spend a lot of time developing their products so they work well and if
you modify them then it's all out the window and your insurer will be
scratching his head wondering what he should charge - and it will almost
always be more than a standard vehicle.
