Lowering The Price You Pay For Car Insurance

You should shop around for your car insurance every year to find the most competitive quotes on offer. While simply renewing with your existing insurance company could be an easier option it is unlikely that the price you are offered represents value for money.

Car insurance companies alter their pricing strategies all the time so if you're choosing to automatically renew you could be missing out on sizeable savings.  This is particularly true if you've been renewing with the same provider for two years or more.

One thing that always rings true, however, is this: the more you include on your motor insurance policy, the more expensive it will be. There are all manner of additions to your policy that insurers will offer; it's up to you which you are prepared to pay for.

As such, it is prudent to decide carefully what or not you really need the following policy features:

Optional extras that increase the cost of car insurance

Courtesy car: while a courtesy car is very handy if your car is unavailable, check the small print. Some insurers charge more to provide one (and will also charge you to insure it) and some will only provide a courtesy car in certain situations.

Legal protection: If you have an accident that is not your fault, legal protection offers the chance to recover any uninsured losses from the responsible driver. You will usually be offered between £50,000 and £100,000 worth of legal cover - but remember ultimately, whether the case is deemed winnable by the insurer or not determines if the cover is granted.

Breakdown assistance: If you are already have a separate policy for breakdown cover (some banks offer it with premium accounts, for example), it is worth checking that you aren't over-insuring yourself or paying too much for protection you won't use.

Overseas cover: Many car insurance companies will only cover you under TPFT terms while abroad; some breakdown cover policies also do not apply while overseas. This can usually be added to the policy, but it will cost.

Other policy choices to consider

Excess: The more excess you pay, the lower your premiums - up to a point. There is a tipping point where the increased excess no longer reduces your costs. Also be careful to consider the mandatory (or compulsory) excess as well - some car insurance companies offer cheap premiums by attaching the savings to a high excess which you have to pay in any claim before the insurer will get involved.

Repairs: Some insurers will automatically authorise repair quotes by recognised and recommended garages. Often this will not be the cheapest quote, and as such by shopping around and getting prices for the work you can save money on the repairs.

No-claims: What happens if the cost of an accident that is not your fault cannot be reclaimed (for example, if the at-fault driver does not have any car insurance)?

Some companies will cancel your no-claims as a result of this, while others will not touch it. Also, for a small cost you can protect a no claims discount, allowing you to keep the discount even if you are responsible for a claim. Also, if you are a named driver on a policy, can you transfer that to a policy under your own name?

Payment: Whilst yearly payments are a larger initial outlay, they are cheaper overall than monthly payments, some insurance companies charge interest if you choose to pay monthly which can further increase the overall cost of your policy.