Motor premiums continue to soar

Published:

24 July 2008

Topic:

News,Insurance,Money,Motoring,Car,Car Insurance

Petrol and diesel prices have started to drop back, but the relief for motorists could be short-lived as those needing to reinsure their car are likely to find they will have to pay more for cover than they did last year.

With millions of car insurance policies up for renewal in August, this news has come at a bad time as many households are already struggling to cope with rising living costs.

The new registration is out in September so August is traditionally a busy time for car insurance renewals. The key thing is not to accept the renewal quote from your existing insurer, but to shop around and compare car insurance from other providers, as you will almost certainly be able to find a cheaper deal elsewhere. Moneysupermarket.com has also looked at other things you can do to ensure you get the best possible deal on your car insurance.

Young drivers
The AA's index shows that young drivers, who typically buy third party, fire and theft insurance and already pay more for their premiums, are hardest hit because they're more likely to make a claim. If you've recently passed your test and are struggling to find cheap car insurance it's worth looking at the following areas to save money:

• Opt to pay a higher excess in the event of an insurance claim.
  
  
• Investigate whether it would be cost effective to complete the Pass Plus course to lower premiums.
  
  
• Drive a cheap car with a small engine and don't customise or modify your car.
  
  
• By parking your car off the road or in a garage, as a young driver you could save up to 5% on your premium compared to parking on the road.
  
  
• Get quotes for third party only, third party, fire and theft and fully comprehensive as all will be priced differently.
  
  
• Use moneysupermarket.com's comparison tool which lets you compare the details of up to five policies at once.

Research carried out by moneysupermarket.com, found that Swiftcover offered the most competitive quotes for both a 20-year-old male and female driver living in Manchester and driving a 1.3 Ford Fiesta. With a £250 excess, Swiftcover offers a premium of £990 for a male and £647 for a female. Endsleigh comes in behind Swiftcover, but at £1,118 for a male and £768 for a female, it's a bit of a jump and the excess is £550.

Student, 20-year-old single male living in M20,   
Driving a Ford Fiesta 1.3, 8,000 miles a year with two years NCD and the car parked on a drive.

Student, 20-year-old single female living in M20,   
Driving a Ford Fiesta 1.3, 8,000 miles a year with two years NCD and the car parked on a drive.

It's worth noting though that premiums will vary depending on other factors such as where you live, the number of miles you drive and where the car is kept, so Swiftcover may not be the cheapest for all young drivers. This is why it is crucial for everyone to scour the market.

Female drivers
It's worth considering an insurer that caters especially for women as they're usually cheaper and offer female friendly extras on the policy. Premiums tend to be lower than those for men because claims made by women tend to cost less than those made by male drivers of the same age.

Men can be covered by these insurers also, but a lot of the optional extras they offer would probably be more beneficial to women. These can include "handbag cover" which will cover the contents of your handbag if it's stolen from your vehicle, a free counselling helpline and women-friendly repairers. Increasingly, these companies are offering tailored home insurance too.

Even though women are generally quoted lower premiums than men, there are still ways to reduce your premiums further. The usual things such as the mileage you clock in a year and the security features in your car can still make a difference. If you have a man in the house with whom you share a vehicle, putting yourself down as the named driver will lower the car insurance costs for the whole household, as he will still be covered while the premiums will reflect the fact that the woman's name is the first on the policy. However, only do this is the woman is the main driver - if the partner or husband drives the car most of the time, the insurer may turn down a claim.

Even though there are a number of insurers that specialise in insuring women, such as Shelia's Wheels and Diamond, it is still important to shop around as they may not be the cheapest.

The table below shows quotes for a 35-year old female living in Manchester, driving a 1.8 litre Ford Focus.

Financial Advisor, 35-year-old single female living in M20,  
Driving a Ford Focus 1.8, 6,000 miles a year with five years NCD and the car parked on a drive.

Male drivers
When it comes to driving, statistics show that men are the least cautious of the sexes and unfortunately, car insurance premiums reflect this.

Young male drivers are most likely to make a claim, and consequently men in their 20s pay up to 41% more than those in their 30s.

However, while men are deemed to be higher-risk drivers than their female counterparts in their younger years, as they get older male drivers see a bigger fall in the cost of motor insurance. Women in their 50s pay an average of £203 a year for car insurance, while men pay £199.

Other ways to cut the cost of your car insurance:

• Shop around - The Association of British Insurers says you can save 35 per cent by comparing as few as five insurance providers.
  
  
• Buy online - Many car insurance providers offer discounts to customers that buy online.
  
  
• Mileage limit - The less time you spend on the road, the lower the risk and therefore the lower the premium.
  
  
• Car security - Make sure you have an alarm and immobiliser.

Teacher, 45 year old single male living in BB5    
Driving a Volkswagen Passat 2.3, 20,000 miles a year with 5 years NCD and car parked on a drive.

Disclaimer: Please note that any rates or deals mentioned in this article were available at the time of writing.

Related Links

• Compare more than 60 leading motor insurance companies

Email a Friend

Let a friend know about this news item with an email containing a link to this page, and a customised message.

Your name: *

Your email address: *

Your friend's name: *

Your friend's email address: *

A message to include (up to 800 characters):

 

Enter the code above:

 *

This helps us prevent automated programs from using and slowing down our services.