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Car Insurance Money-Saving Tips

Find cheaper car insurance and cut the cost of driving

Pay less for cover with our car insurance money-saving tips.

By Mehdi Punjwani

Updated: 07 December 2021

Driver in car

Looking for car insurance?

Insurers don’t often reward loyalty – in fact, they tend to offer better deals to entice drivers away from rival insurance providers. 

So the easiest way to save money on car insurance is to shop around for the best deal via a comparison website such as MoneySuperMarket, which lets you compare quotes from more than 110 insurers. 

Comparing car insurance quotes can save you up to £264* a year. But – as this guide shows – you can save even more by taking steps such as: 

How to get cheaper car insurance – before you buy

Before you buy your car insurance policy, it’s worth keeping the following in mind.

Choose the right car

Insurers sort different makes and models of cars into 50 insurance groups, with cheaper, less powerful models in the lower groups and expensive cars with large engines in the higher ones. They then use these groups, as well as multiple other factors, to help them set the premium you will pay.

You can save money on your car insurance by choosing a car that is in a lower insurance group. You can use our handy car insurance group checker to find out what insurance group your current vehicle is in, or to check up on a car you’re considering buying.

Pick fully comprehensive

Fully comprehensive car insurance offers a higher level of cover than the other two options:

But it’s often the cheapest option. This is because insurers have noticed that people who take out less cover tend to make more claims. So by taking out comprehensive car insurance, you can pay lower premiums – and save money on repair bills if you are in an accident. 

Choose annual cover

Spreading the cost of your car insurance might feel cheaper than paying your premium in one go, but it will probably cost you more in the long run. Many insurance companies charge interest when customers opt to pay for their insurance monthly, so check before you sign on the dotted line. 

If your insurer’s policy is to charge interest, but you would like to spread the cost of your cover for free, you might want to consider using a 0% purchase credit card to pay for it. Just be sure to clear your balance in full before the 0% period ends.

Pay more excess

As a general rule, the higher the voluntary excess you agree to pay towards any claim, the lower your premium. So try experimenting with our car insurance comparison tool to see how much you could save by increasing the excess amount you are prepared to pay. 

Remember, though, that you’ll need to be able to afford your voluntary excess to make an insurance claim.

Avoid unnecessary extras

Car insurance policies come with a range of extra features,  such as legal expenses cover, windscreen cover or use of a courtesy car. While they can be useful and bolster your protection, they will push up the cost of your car insurance package. 

So think carefully about whether you really need them before adding extra types of cover to your car insurance policy. 

Think about adding extra drivers

You can generally add up to three named drivers to your car insurance policy. How this affects your premiums will depend on the type of drivers concerned. 

Adding a more experienced named driver can reduce your premiums, especially if you are young and/or inexperienced behind the wheel. But beware: adding a younger, less experienced driver will have the opposite effect. 

It’s also important to always be honest about who the main driver is, or you could end up invalidating your cover. 

Consider how you describe your occupation 

Being dishonest about what you do on an insurance application is fraudulent and could easily leave you unable to make a claim. But you can sometimes save money by changing the exact term you use. 

Examples include describing yourself as a “cook” rather than a “chef” or as a “writer” rather than a “journalist”.

If you work from home or take public transport to and from work, you may also be able to find a cheaper policy by searching for insurance “for social use”.

How to get cheaper car insurance when you renew

If your car is already insured, you can start thinking of ways to get cheaper cover next time round when your renewal date arrives. 

Shop around

As explained above, shopping around is a simple but effective way to reduce the price you pay for cover, because insurers rarely offer their very best deals to existing customers. 

It’s easy to see how much you could save by switching with MoneySuperMarket – just remember to make sure you’re comparing like for like cover. 

Drive fewer miles

How many miles do you really travel in your car each year? If you think you can stick to a lower mileage, you may be able to save money on your car insurance. 

This is an especially helpful tip for two-car families, where one vehicle is likely to do more miles in a year than the other. 

Just remember to let your insurer know if you exceed the agreed mileage. Otherwise, any claims you make after that point could be turned down. 

Improve car security

Fitting an immobiliser or an alarm will earn you a discount with some insurers. However, not all companies offer this, so check how much you could save before taking the plunge. 

Avoid parking on the street

It’s always best to park your car off the road, or ideally in a locked garage, overnight if you can. 

This reduces the chances of your vehicle being stolen or damaged while it is parked, and will often prompt insurers to quote you a lower price.

Avoid small claims if you can

Making a claim means you are likely to pay more for car insurance in the future. So it’s worth doing the sums to see whether smaller claims are worth it – especially once you have taken the excess you have to pay towards the claim into account.

You also can get a big discount on your car insurance by building up a no-claims bonus, with which you are rewarded for every year you go without making a claim. 

Avoid modifications

Modifying your car, for example by adding alloy wheels or upgrading the engine performance, can make your car a lot more attractive to thieves. It will also make it more expensive to fix if you’re in an accident. 

So for cheap car insurance, it’s best to avoid modifications. If you do decide to modify your vehicle, however, it’s important to notify your insurer to prevent any future claims being rejected.

How to get cheaper car insurance as a young driver

Young drivers often face much higher premiums, as a result of their inexperience on the road making them higher risks in insurers’ eyes. However, there are still steps you can take to get cheaper cover.

Telematics

When you take out a telematics car insurance policy, you agree to let your insurer monitor your driving via a black box installed in your car, a plug-and-drive device or a mobile phone app. 

As the insurer then uses the data collected to set your premiums, telematics can be a good way for young drivers to cut the cost of car cover – as long as they drive safely. 

Named drivers

As explained above, adding a more experienced motorist as a named driver on your car insurance policy can help to bring your premiums down. 

However, it should be someone who drives your car at least from time to time. It’s also illegal to take out a policy in an older driver’s name if a young driver is really the main driver of the car – an insurance scam known as fronting that can land you in big trouble if you get caught.

Short term cover for learner drivers

If you’re learning to drive, short-term car insurance is often a cheaper option than signing up to an annual policy. A six-month provisional licence policy will usually give you ample time to pass your test. 

Once you have your full licence, you may also be able to cut your car insurance costs by taking an advanced driving course such as Pass Plus. However, not all insurers offer discounts for this. 

Compare car insurance

It’s easy to compare policies and save money on car insurance with MoneySuperMarket. Just tell us a bit about yourself and your car, as well as the type of cover you’re looking for, and we will show you a list of quotes from leading insurers that match your needs.

When you’ve chosen a policy, all you have to do is click through to the provider’s website to confirm your purchase. 

*51% of consumers could save up to £264.52 on their annual car insurance premiums. Consumer Intelligence, October 2021. UK only.

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