Car insurance in the UK has become one of the most expensive expenses for a driver, especially for beginners. With the rising costs, depreciation value and inflation, it takes a chink of your money. However, adopting the right strategies and making informed purchase decisions can keep you from overspending on your car insurance. Here are our 7 proven ways that you can utilise and save up to £1000 on car insurance in the UK.
How to Save Money on Car Insurance?
Saving money on your car insurance isn’t rocket science. It works with the simple concept of posing as a low-risk driver and calculating the insurer’s policies. With a reputable and safe driving history, choosing the right vehicle type and location, as well as the type of insurance payment, all of this determines your car insurance costs. Choosing the right coverage will not only help save money but also work in your favor in the long run.
Why Car Insurance Is So Expensive in the UK?
Car insurance is now quite expensive in the UK. There are several factors to it, such as;
- Rising labor/mechanical costs because of inflation, as well as the modern, complex technology being used in newer vehicles. It requires mechanics to update their tools and techniques while also investing in high-tech diagnosing + repair machines.
- Increased claims and fraud cases. As the number of vehicles is increasing on the road, so is the risk of claims and fraud. As a result, insurers raise the costs to keep up with the high demand and risk.
- Higher insurance premium tax, i.e. IPT being pressed on the insurance companies, which they ultimately pass on to the customers
- Expensive repairs, costly spare parts and maintenance of cars.
7 Proven Ways to Save £1000 on Car Insurance.
If you want to save costs of up to £1000 on your car insurance, we’ve compiled a list of 7 proven ways that you can adopt.
Compare Quotes from Multiple Providers.
Always compare quotes for your car insurance from multiple providers and don’t settle for the first offer. Avoid deals that seem too good to be true. Always get a comprehensive market check-up yourself and explore your insurance options, which can vary by hundreds of pounds from one insurer to another. For this, you can either visit the insurance companies in person or use websites like Compare the Market, GoCompare, and MoneySuperMarket.
Increase Your Voluntary Excess.
If you increase your voluntary excess, you will end up paying less insurance premium. It is because of the higher financial risk you are taking upon yourself that translates to lower insurance costs. However, make this decision thoroughly as it is the amount that you have to pay when making a claim.
Use Black Box (Telematics) Insurance.
As someone with good driving habits, you can use a black box (telematics) insurance. This type of insurance rewards good driving habits up to £500 to £800 annually for a driver in the UK. develop a good driving behaviour and get rewarded as a young driver or low mileage driver.
Add an Experienced Named Driver.
Always add the name of at least one experienced driver along with yours when getting an insurance plan. It will reduce the risk for insurance companies, and so will the insurance costs. It can be your partner, guardian, or sibling. However, don’t opt for fronting (posing someone else as the main driver) because that’s illegal.
Pay Annually Instead of Monthly.
Opt for annual insurance payments instead of a monthly subscription. This is because the annual fee is upfront, while the monthly fee includes interest. Doing this alone can save you up to £300 per year.
Choose a Car with a low insurance group.
Get a car with a low insurance group. Ideally, an insurance group of 1-10 cars works perfectly well for cost savings on the road and for insurance as well. Choose cars with smaller engines, low maintenance costs and high safety.
Improve Your Driving Profile.
Insurers reward safe drivers, i.e. that are low risk. You can build up this profile for yourself by;
- Maintaining your No Claims Bonus (NCB).
- Avoiding frequent claims.
- Developing a good driving style.
Bonus Tips to Save Even More.
There are a variety of small changes that you can adopt to save even more on your insurance costs. Such as;
- Park in a garage or a secure area. Also, invest in some good car security features to avoid the risk of theft.
- Limit your annual mileage; the lower you drive your car, the lower your insurance costs and depreciation value.
- Avoid unnecessary add-ons, car modifications, and cosmetic upgrades.
- Get and/or renew your insurance early.
- Take part in advanced driving courses.
Cheapest Cars to Insure in the UK.
There are hundreds of the cheapest car options to insure in the UK. However, some popular choices include:
- Volkswagen Polo.
- Hyundai i10.
- Ford Fiesta.
- Toyota Aygo.
- Kia Picanto.
- Skoda Fabia.
- Fiat 500.
- Citroen C1.
Common Mistakes That Increase Insurance Costs.
Many new drivers make some basic mistakes that increase their insurance costs unknowingly.
- Don’t get auto-renewals for your car insurance. Always review your options, read policies and compare different coverage options.
- Underestimating or overestimating your mileage when getting a coverage plan.
- Modifying your car without declaration, even cosmetic upgrades, can go against your insurance benefits.
- Choosing the wrong job title when getting an insurance plan, which ultimately increases your premiums.
- Paying insurance monthly instead of yearly payments. Monthly payments include interest that poses a higher cost compared to upfront annual payments.
Real Example: How Drivers Save £1000 on Insurance.
How can a driver save £1000 on Insurance? Here’s an example for you. Let’s suppose a driver gets an initial quote of £1,850 a year (monthly payments) for his car insurance payment. However, when he compared it with other providers and explored multiple options, it came down to £1,450 (saved £400). At the same time, getting the coverage, he also opted to increase the excess, which saved him £200 and also added an expert driver for further cost savings of £150. Switching to an annual payment saved him £120 more, while telematics insurance translated to cost savings of £180. The final price now came down to only £850 a year!
Frequently Asked Questions
How can I reduce my car insurance in the UK?
You can reduce your car insurance in the UK by comparing multiple options, increasing excess, adopting safe driving habits, protecting NCB and avoiding frequent small claims.
What is the cheapest way to insure a car?
The cheapest way to insure a car is to pay annually, adding the name of an experienced driver and buying a low insurance group car.
Does black box insurance save money?
Yes, black box insurance rewards good driving habits. So if you are a safe driver, slow driver or a new driver, it will work best for your cost savings.
Is it cheaper to pay annually?
Yes, annual insurance payments are generally cheaper than monthly payments. This is because the annual fee is upfront, while the monthly fees include interest as well.
What affects car insurance the most in the UK?
The key factors influencing car insurance costs in the UK are young/inexperienced drivers, high insurance group cars, and location.