Car insurance – how to reduce your premiums

July 11, 2022

The annual cost of owning a car has shot up by 17% – nearly £3,600 – in the wake of escalating petrol prices and the cost of car maintenance.

You cannot do much about the price of petrol at the pumps or maintaining your vehicle, but there are several ways of potentially reducing your motor insurance premiums. So, let’s look at some of them:

Shop around

• although you’re more likely to notice any increases in insurance premiums, the price can vary quite markedly in just months – on the 5^th of February 2022, for instance, the Association of British Insurers (ABI) revealed that the average price of premiums in the previous 12 months or so was cheaper than it had been for six years;

• shop around for the most attractive deals, especially since your motor insurance requirements may also have changed (or let us do the legwork for you and compare car insurance on your behalf);

Don’t auto-renew

• it follows, therefore, that auto-renewing your insurance each year – a default option from many insurers – you could be missing the opportunity to make savings on the annual cost of your motor insurance;

• for only a modicum of added inconvenience, turn down any offer to allow your current motor insurance to auto-renew each year – or review your car insurance cover options before auto-renewal;

Lower your annual mileage

• many of us are learning to use the car less – it not only saves on the cost of fuel but also has environmental benefits;

• by using your car less, you can also reduce your insurance premiums – when you drive fewer miles each year, you lower the chances of being involved in an accident and the insurance claim that follows, so your insurer considers you a lower risk and charges less for your cover;

What type of car insurance suits you?

• as you get used to reviewing your motor insurance, you can also keep under constant review just what type of cover you need – and whether you are paying too much for the protection you did not after all need;

• does your present insurance policy also cover you if you want to drive a hire car, or would you have to pay extra for that period?

• are you covered when driving your vehicle abroad, or do you have to pay an additional premium for that protection?

Pay upfront

• it might be tempting to spread out the cost of your motor insurance by paying for it in monthly instalments throughout the year;

• the fact remains, however, that the full annual premium falls due at the beginning of the annual cover, and if you opt to pay by monthly instalments, you are effectively reaching a credit agreement with your insurer;

• credit agreements do not come without a cost – if you want to avoid those costs, pay for your annual motor insurance upfront when it falls due;

Excess

• just as with practically every other type of general insurance, your motor insurance attracts an excess whenever you make a claim – the first part of any successful claim for which you retain responsibility for the uninsured loss;

• by agreeing to a larger, voluntary excess, you are shouldering a greater proportion of the risks involved in insuring your car and can, therefore, expect a reduction in the price of the premiums you pay.

With increases in the cost of motoring, you can exercise at least some degree of control over the cost of your car insurance. If you want to save money on your car insurance, follow some of our suggested tips and suggestions.