Six ways to reduce your car insurance costs

With new number plates arriving on garage forecourts at the beginning of March, more than a third of drivers  — myself included — have been thinking about getting a new set of wheels, according to a new study from Sainsbury’s Bank.

For me, it’s because my trusty 2004 Citroen Picasso is about to give up the ghost. Great timing, as the month of March is an ideal time to look for a bargain, due to the new registrations. This means that dealers have a sudden increase in supply and are more open to haggling than usual.

But it’s not just the sticker price that you have to consider when buying a new vehicle. You have to think about the unavoidable running costs such as fuel, car tax and insurance.

To soften the blow of such a big purchase, why not try to bring down the cost of your car cover? Here are my top six ways to reduce your motor insurance premiums:

1. Loyalty doesn’t pay

The biggest rule for saving money on any type of household bill is to shop around, and car insurance is no exception. Yet figures from show that 15% of us accept our renewal quote, no questions asked. According to the comparison website, simply shopping around can save an average of £262.41 on a car cover policy.

Compare premiums by checking out and Bear in mind that some insurers, including Aviva, do not appear on comparison sites, so you have to contact them directly for a quote.

And remember, the cheapest policy may not be the most appropriate, as the level of cover will vary, so read the small print carefully.

2. Don’t be bothered by direct debit

When given the option of spreading the cost of car insurance, it can be very tempting to choose to pay by direct debit, rather than forking out a lump sum when taking out the policy. But this convenience comes at a cost: opt on monthly repayments you can expect to pay an additional charge of as much as 25% to your premium. Ouch.

3. Earn cash back on your cover

When taking out a new insurance policy, always buy via a cashback site. For a list of providers and comparison websites that pay, visit Quidco Compare Car Insurance.

But remember to read the small print, as only genuine transactions that are completed wholly online will pay.

Blue car

4. Consider your excess

Most policies include a voluntary and/or compulsory excess charge (the amount you pay before the insurer has to cough up in the event of a claim). If you’re prepared to increase this slightly, you may be able to save a few pennies.

5. Watch your usage

If you take the train to work, and you’re only using your car for running errands in the evening and at the weekend, make sure that you are only paying for social use on your insurance policy, rather than commuting. This can reduce the cost of your cover considerably.

What’s more, ensure that you declare the correct amount of driving that you do each year on your application.

While government figures show that the average driver does about 8,000 miles a year, some people do much less than this – and can find themselves out of pocket as a result.

That’s because those who don’t drive much can be considered to be less confident behind the wheel, and therefore, more prone to accidents.

If you do drive fewer miles than the average person, it may well be worth looking into low mileage or ‘pay-as-you-drive’ insurance, such as Little Box by Admiral Insurance, as this can work out cheaper depending on how much you drive.

6. Get crafty with your career title

Your occupation is one of the major pieces of information that insurers use to work out your insurance premium and some job titles are viewed more ‘risky’ than others.

The good news is that there may be more than one job title that accurately describes what you do and could result in some significant savings

It’s not just those in full-time work that this applies to either. For instance, if you’re a full-time parent, retired or a full-time student make sure you’re selecting those titles and not ‘unemployed’ – it could save you hundreds of pounds.

However, it’s important to always make sure you’re honest when giving your details to an insurer if you knowingly misrepresent yourself that could invalidate your cover.

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Kara Gammell

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