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How is car insurance calculated

Car Insurance Calculator

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Written by  Emily Sullivan
6 min read
Updated: 04 Dec 2023

Use our guide to work out how much you should be paying for your car insurance and why

How to calculate the cost of your car insurance

The easiest way to calculate your car insurance premium is to use our free car insurance comparison tool. All you have to do is enter a few details about you and your car and we will show you quotes from different insurance providers. You can browse through the policies on offer and choose the best option for you.

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How much will my car insurance cost?

The cost of your car insurance will depend on several factors, including your age, location and driving history. The type of car insurance policy you choose will also have a big impact on the price you pay.

Fully comprehensive car insurance not only offers the most coverage, but it’s also typically the cheapest. MoneySuperMarket data shows yearly policy costs as below:

Fully comprehensive: £673.77*

Third-party, fire & theft: £945.56*

Third-party only: £802.04*

*Based on annual price of car insurance policies with one driver holding a full UK driving licence for at least 12 months. MoneySuperMarket data, collected between July 2023 and September 2023.

How does our car insurance calculator save you money?

Our car insurance calculator can save you money by providing a quick and efficient way to compare insurance quotes from various providers. By using our calculator, you can:

  • Identify savings: See potential savings based on different coverage levels, deductibles, and other factors. By filtering for different options, you can see what impacts your premium price.

  • Save by switching: Many people could save money by switching to a different insurance provider. The calculator helps you explore alternatives and see if there are better offers available.

  • See excess options: Experiment with adjusting your voluntary excess. Choosing a higher excess may result in a lower premium, and our tool can help you find the right balance between premium cost and excess amount.

  • Assess existing offers: If you've received a renewal notice or quote from your current provider, the calculator serves as an independent tool to assess whether the offer is fair or if there are more cost-effective options available.

How is car insurance calculated?

When you get quotes for a car insurance policy you’ll need to give us a few details so we can be as accurate as possible with our search. Some of these will help insurers decide how to set your premiums, such as:

  • Age: Younger drivers almost always face much higher car insurance premiums, as insurers see inexperience as a major risk factor. They counter this risk by charging you more for cover – but as you get older your premiums should eventually go down

  • Driving history: Even if you’ve been driving for a while, insurers want to know that you’re safe and responsible behind the wheel. If you have a history of making car insurance claims or you’ve got a few driving convictions on record, this also presents a higher risk to insurers – therefore you’ll likely pay more in premiums. As you might therefore expect, if you haven’t made any claims you might be eligible for a no-claims discount

  • Location: Some areas are viewed as higher risks than others due to factors like crime and burglary rates. If you live in a postcode in which your car is more likely to be stolen or vandalised, your car insurance will probably cost more

  • Occupation: Certain occupations may carry a higher risk of damage occurring to your vehicle – especially if it’s used for business purposes such as commuting

  • Your car: The actual car (or cars) you want to insure can also affect your premiums. Insurers sort makes and models into different insurance groups using a range of factors, such as power, top speed, security and availability of spare parts, and those in lower groups are usually cheaper to insure

How can I get cheaper car insurance?

There are a few things you can do to try and reduce the cost of your car insurance policy:

  • Pay annually: It usually works out cheaper to pay your car insurance premiums annually, compared to spreading the cost over 12 monthly payments

  • Pay a higher excess: Volunteering a higher excess payment tells insurers you’re unlikely to make small claims that aren’t worth the cost, so they’ll reward the lowered risk

  • Reduce your annual mileage: Statistically, the less time you spend on the road the less likely you are to be involved in an accident. So, if you can restrict the number of miles you drive you might be able to lower the cost of your car insurance

  • Consider telematics insurance: popular with younger drivers, a telematics or black box policy monitors your skills behind the wheel. Demonstrating safe driving can potentially lead to reduced insurance costs over time

  • Build up a no-claims bonus: If you can go for a year or longer without making a claim, you’ll start to build up a no-claims bonus, and the more no claims bonus you build up the bigger discount you get

  • Choose a cheaper car to insure: Providers sort car makes and models into different insurance groups, based on factors like safety and performance – cars in lower groups are cheaper to insure

  • Improve your car security: Having security features like factory-installed alarms and immobilisers on your car reduces the risk of theft, and can also bring your insurance costs down

  • Don’t over-insure your car: Add-ons like breakdown cover and car keys cover cost extra to add to your policy. To save money, consider cutting out optional extras that may be cheaper to pay for out of pocket

  • Use our car insurance calculator: By customising your search with our car insurance calculator, you'll be able to see if you can save money

Can I save my searches when using the car insurance calculator?

Yes, if you register with us, you can sign into your account to retrieve previous quotes. We will also send your quotes via email, so you can easily access them when you’re ready to buy.

How long do quotes last for?

This will depend on the insurance provider. Some will give you as long as 60 days to decide, whereas others update their quotes in real-time, meaning the price could fluctuate.

Our calculator will save your searches but there is no guarantee that the price will remain the same, so if you find a great deal, you might want to go for it. Remember auto-renewal can often be more expensive, so it’s best to shop around when your policy is coming to an end. Check out our guide for the best time to renew.

Compare car insurance quotes

Comparing car insurance quotes with MoneySuperMarket is a quick and easy way to find the right level of cover that's affordable. All you need to do is tell us a little about yourself, your driving history and the car(s) you want to cover, and we’ll search the market for a list of quotes tailored to your needs.

You’ll be able to compare deals by the overall monthly and annual premiums, the level of protection you’ll get and the excess you’ll need to pay to make a claim. Once you’ve found the one you want, just click through to the provider to finalise your purchase.

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