CAR insurance is an essential cost that you hope to never use but will need to cover the costs of theft or damage to your vehicle.
We explain how to find cheap car insurance so you can drive down your costs.
Thankfully, there are lots of ways you can cut the cost of your insurance.
Here's our guide to making sure you get the best cover for the cheapest price.
Why do you need car insurance?
All drivers by law must insure their vehicles.
You could be fined £300 and get six points on your driving licence for using an uninsured vehicle, plus the police may even be able to seize your car.
Car insurance can protect you from a large repair bill if you get into an accident when driving plus it may pay-out for a replacement motor if yours is stolen.
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What does car insurance cover?
There are three types of car insurance.
The most basic is third party.
This is the minimum level of cover you need to legally drive on UK roads. It is not necessarily always the cheapest car insurance though.
It provides cover for claims against you following an accident causing damage to someone else’s vehicle and injuries you may have caused to others.
It doesn't cover any injuries to you or repairs for your car if you were in a crash.
You can also get third party fire and theft.
This covers damage or injury that you caused to someone else but you may also get a pay-out if your car is damaged due to fire or theft
Fully comprehensive cover will cover everything above, along with damage to your own vehicle.
Fully comprehensive car insurance is the highest level of cover available and usually covers:
- Damage caused by fire
- Theft and vandalism
- Accidental damage caused by negligence e.g. reversing into a pillar
- Any personal injuries to others that result from an incident involving your vehicle where you are at fault
Don’t assume that fully comprehensive cover is the most expensive cover, that’s not always the case.
What type of car insurance do I need?
This is very much down to your own circumstances.
The cover provided by a third-party policy is very basic, as it doesn’t cover repairs to your vehicle, theft or fire damage.
However, it may suit you if you drive an older vehicle that you can afford to repair or replace it if it is damaged.
Additionally, fully comprehensive car insurance may be more suitable if you are driving a newer car as it may be more expensive to repair and replace if stolen.
It’s always worth comparing the deals available at the different cover levels to ensure you find the best policy for your needs.
How much is car insurance?
There are a many factors that determine the cost of car insurance.
These include your age, where you live, the make of vehicle, the amount of driving experience you have and if you have made previous claims.
An insurer may think a younger driver will take more risks and premiums could be higher if you live in an area with a high crime rate.
The premium will also be calculated based on how often and how far you will use the vehicle and if it is being driven for business, pleasure or both.
You will also be asked where you keep the car at night as a driveway or garage may be safer than the street so you can keep a closer eye on it.
There may be add-ons you can purchase such as key cover.
This protects you if you lose your keys or they are stolen and covers the cost of a new set.
What is the cheapest car to insure?
All cars are put into one of 50 insurance groups based on their engine size, security features, cost of replacing parts, their value and safety ratings.
You can use an online insurance group checker to see what category your vehicle is in.
This will give you an indication of how much your car will cost to insure and the vehicle most likely to give you cheap car insurance.
Insurance premium tax, set by the government, can also influence car insurance quotes as can the age of the vehicle.
Why is car insurance more expensive for new drivers?
Insurers like the comfort of knowing that you are experienced on the roads.
So even if you pass your driving test first time, your premiums could be expensive the first time you insure your vehicle as you are a new driver and don't have a track record.
Most new drivers are young and a quarter are involved in an accident in the first two years of being on the road.
Does my credit score affect car insurance?
Insurers will do a soft search of your credit report to confirm who you are and your address.
This won't show up on your report as its not a full search.
The only time an insurer will do a full search is if you are paying on a monthly basis.
This is because there are two ways to pay for your insurance.
You can either pay upfront or choose to make monthly payments with a bit of interest on top.
Paying monthly means you enter into a financial agreement so the insurer will need to check your credit file first.
A lower score may make it harder to do this.
Additionally, if you miss insurance payments then you could fall into arrears and have a county court judgement taken out against you, which would also reduce your credit score.
Why is my car insurance so high?
Your age, profession, where you live and the type vehicle you drive could all be pushing up your insurance.
Providers also add insurance premium tax to the cost, which is currently 12%.
Insurance can also be higher if you have chosen a lower excess to pay when making a claim.
Plus it may be high if you have a history of accidents that you have claimed for as an insurer will see you as higher risk.
How do I get my car insurance lowered?
Insurers rely on you not shopping around at the end of a deal so you will just roll onto their often higher renewal quote.
However, you can save money by shopping around for the best cheap car insurance deals on comparison websites or it may also be worth phoning your existing provider once you come to renewal to see if you can haggle a better premium.
Your job title could have an impact on how much your policy costs.
Car insurance costs can vary by over 50% depending on your job title or employment status.
But whatever you do – don't lie about what your job and try and cheat the insurer.
If you do your insurance could be invalid and you'll find you won't have any cover when you really need it.
But if you can legitimately tweak your job description, you could save cash.
Another way to reduce your car insurance costs is to pay upfront.
Insurers will usually give you a choice of paying for insurance all in one go or each month.
Monthly payments may help spread the cost but interest is usually added so paying upfront can be cheaper.
Additionally, younger drivers could benefit from adding another person such as a more experienced parent to their policy.
Plus, if you are willing to pay a higher voluntary excess if you make a claim then your premium is usually reduced.
Should car insurance decrease every year?
Car insurance may become cheaper as you get older and have a track record of driving experience and history of no claims.
But there are plenty of other factors that could push it up such as the type of car and where you live.
The best way to ensure the cost of your car insurance decreases each year is to shop around and not accept your renewal quote as you will often find a cheaper deal.
How do I estimate my mileage?
An insurer will ask you to provide your annual mileage when you apply for car insurance.
This is to give it an idea of how much you use the car so how often it will be out on the road.
It may be easy to calculate this if you check the mileage displayed on your car each time you start a new insurance policy.
Your latest MOT certificate will also show how many miles you drove the previous year.
Alternatively, you can give a range usually starting from up to 1,000 miles per year.
Calculate how far you are driving for the school run, shopping, weekends away or longer holidays each year.
Typically, the lower your mileage, the lower your insurance will be but don't underestimate as you may invalidate your insurance.
How long is my quote valid for?
It is up to an insurer how long they hold a quote for.
This may be for a couple of months or premiums could be regularly updated so could change at any point.
It may be worth signing up for a deal if you find the best cheap car insurance for your needs.
Premiums typically get more expensive the closer you get to your policy start date.
But make sure you have done your research, check the policy documents and know you are getting the most appropriate type of cover.
How do I work out my car’s value?
An insurer will ask you for the value of your car when you apply for insurance so they can calculate how much it will cost to cover.
This is an easy one if you have just purchased your vehicle but cars depreciate over the years.
There are plenty of online calculators that let you work out how much your car is currently worth.
Just enter the make and model and then provide this valuation to the insurer.
Insurers will usually payout for a stolen car if you have fully comprehensive cover.
This will be based on the market value of your car, rather than what you paid for it.
What might cause a claim to be rejected?
You may be insured for damage or theft but you still have to behave responsibly.
An insurer could refuse a claim if you did something that goes against the policy conditions such as speeding or drink driving.
You are also expected to keep your car in a roadworthy condition and be responsible such as not leaving car windows open or valuables on display.
Claims usually need to be made within 24 hours and a week of an incident so you may be rejected if you have waited too long to make a claim.
Additionally, an insurer may not cover you if you had a the wrong type of insurance, such as if you are claiming for damage to your car but don't have a fully comprehensive policy.
Your insurance can also be invalidated if you let someone else drive your car and they have an accident.
You can appeal if your claim is rejected or contact the Financial Ombudsman Service if you still can't reach an agreement.
What is car insurance excess?
The excess is the amount you pay a car insurer when you make a claim.
For example, if an accident caused £700 of damage to your car and you had a £200 excess, the insurer would cover £500 and you would pay the rest.
You still need to pay the excess even if the accident wasn't your fault and your provider will try to claim the money back from the other driver's insurer to refund you.
A car insurer will usually have a compulsory excess that is the minimum you have to pay and you can then pay a voluntary sum on top.
You can set the amount of voluntary excess you would like to pay when shopping around for car insurance quotes.
The higher the figure, the lower the actual cost of your insurance – known as the premium – will be.
So it may be worth setting a slightly higher excess that you can afford to reduce the cost of your car insurance.
What is a no claims bonus?
Car insurers like safe drivers and will give you a discount if you have a track record of no claims.
This is known as the no claims discount or bonus.
The more years you have without making a claim, the cheaper your insurance could be.
Making a claim can set your record back to zero but it is also possible to pay an extra fee that protects your no claims bonus even if you need to use your insurance.
I had to make a claim last year. Will my insurance go up?
Claiming on your insurance if you have been in a car accident or your vehicle was stolen will unfortunately most probably increase your premium when it comes to renewal.
When you make a claim to an insurance company, yours and the other driver's insurer will have to decide who is at fault.
You may need to provide evidence if you think the other person was to blame.
An accident will be recorded on your record as a non-fault claim if liability lies with someone else or at-fault if it was caused by you.
Alternatively, an insurer may ask you to agree to joint liability.
All these situations could result in your premium going up, even if an accident wasn't your fault.
This is because an insurer may think the risk of another accident is higher once you have had one.
You need to tell an insurer about any accidents you have been involved in over the previous five years when you apply for cover, even if they were caused by someone else.
Can my parents help me get cheaper car insurance?
Adding a parent to your car insurance if you are a new driver can be an effective way to reduce your premium.
Young drivers are generally seen as riskier and more likely to be in an accident.
But if you can add a parent as an additional driver or main driver this lowers the risk as the car will also be driven by a more experienced person, reducing the likelihood of a crash and claims.
Don't name an older person as the main driver though if they are not as this is a type of fraud called fronting and could invalidate your insurance.
What is telematics insurance? And how does it work?
Another way you can cut your insurance costs is by switching to telematics insurance.
Also known as "black box" insurance, you'll get a small box fitted to your car which records how you drive.
It will record things like speed, your driving style, the time of night you typically use your car and what even type of roads you drive on.
The idea is that by showing your a responsible driver, you'll be offered cheaper premiums.
Originally, the polices were designed for younger drivers, but lots of insurers now offer them to all drivers.
Will I be charged if I cancel my policy?
Like all insurance products, you have a 14-day "cooling-off" period where you can cancel and change your car insurance without charge.
This could be because you have changed your mind and found a better cheap car insurance deal or your circumstances have changed since purchasing the policy.
After this period you are typically locked-in for a year and may have to pay cancellation fees if you want to move.
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An insurer may refund your premiums for however long is left on your policy if you paid in advance but any cancellation fees could outweigh the savings you are getting with another deal.
You can also cancel your policy if you sell your car and may get a refund of any premium paid upfront.
Alternatively, if you are buying a new carit may be worth transferring your policy and paying any difference. There could be an admin fee for this.
Which is the best car insurance in the UK?
The best car insurance for you may depend on the type of driver you are.
Some providers may specialise in insuring new drivers or women.
A comparison website can help rank providers by price and level of cover but those are only some of the factors to consider.
It is worth checking customer feedback such as on Trustpilot and also looking at independent ratings and reviews from organisations such as Which? and Defaqto.
These will tell you how detailed policies are and how they treat their actual customers.
How to get cheap car insurance
Once you have decided about the type and level of cover you want, you can search for cheap car insurance deals online.
A comparison website is a good place to start as you can compare car insurance policies by the type of cover and level of excess you are willing to pay.
It's worth using more than one though, as different sites have different relationships with each insurer.
Some insurers, such as Direct Line and Aviva, don't use comparison sites, so you should contact them directly to see what they'll offer.
You may also get discounts for adding two cars to a policy, known as multi-car insurance. This isn't always available on comparison websites so you will need to check with an insurer directly.
When it comes to renewal time, insurers rely on you not bothering to shop around.
You can knock hundreds of pounds off your annual bill by spending just a few minutes comparing other deals.
Once you've found the best deal – contact your existing provider to see if they can beat it.
Make sure you tell them the new cheaper price that you've found.
If they can't match it, then switch.
It is also important to insure your home. Find out how to find the best home insurance deals.
Holiday cover costs can also vary. Here is how to find the best travel insurance.
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