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Find out how much you should be paying for car insurance

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

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Calculate the cost of car insurance

When you take out car insurance, your insurance company bases its quote on how likely you are to make a claim in the future. This is calculated using a range of factors including your age, driving history, occupation, where you live and details about your vehicle.

The higher the risk you pose, the more expensive your car insurance will be. This guide will show you what you can do to reduce how likely you will be to claim – and reduce your insurance premiums.

How much does car insurance cost?

There are three main types of car insurance, but the average cost of the most popular policy – fully comprehensive car insurance – was £469 in August 2019, according to MoneySuperMarket data.

It was £828 for third-party, fire and theft policies during the same month, and £1,253 for third-party cover on its own.

How much does car insurance cost?

According to MoneySuperMarket data correct as of August 2019

Fully comprehensive car insurance is getting cheaper even though it covers you for more problems, with average policy prices falling by £20 since January 2019. The other two varieties of insurance are gradually getting more expensive on average.

But these are just average prices. Each driver will receive different quotes according to their risk profile, which is made up of lots of variables. For example, the average man aged between 17 and 19 can expect to pay something in the region of £1,189 for a fully comprehensive policy. Their mum – a woman between the age of 40 and 49 – will have to pay an average of just £351 for 12 months, more than three times less.

And while it’s illegal for insurance companies to change their prices according to gender, certain factors mean a price differential between men and women still exists – learn more with our guide to car insurance for women.

What affects the price of car insurance policies?

All sorts of things can affect the cost of your car insurance. These include:

All of these help insurers build a picture of your risk profile, which they then use to calculate your car insurance.

How does age affect car insurance premiums?

Age is a major factor for calculating car insurance costs. While some young drivers are not completely new to driving, and some older drivers have little experience, it’s a statistical fact that younger drivers have more accidents. When they do, there tend to be more people with them in the car, so insurers view drivers under 25 both as being more likely to have a crash, and to cost more when they do.

How does age affect car insurance?

According to MoneySuperMarket data correct as of August 2019

How does your postcode affect car insurance premiums?

Where you live is also very important, because areas with higher crime rates increase the risk of vandalism and theft. If you do live somewhere with more crime, you can lower your premiums by parking somewhere safe, such as a private driveway or a garage.

How does your job affect car insurance premiums?

Where you work influences how, where and how often you’re likely to use your car. So if you drive long distances for work, you’re more likely to get into an accident simply because you’re on the road more.

Meanwhile certain jobs, such as teaching or the policing, tend to enjoy lower premiums on average as they are seen as pillars of society and more respectful of the rules.

How does the make and model of your car affect premiums?

Your car is a key component in calculating your car insurance for obvious reasons. In fact, insurers consider 50 categories of car when working out premiums, which range from top-end sports cars and rare classics to hardy little runarounds. These take into account the following factors:

  • Value: More expensive cars cost more to replace, and their parts are more expensive when making repairs
  • Performance: Cars which are faster and more powerful have more chance of getting into accidents
  • Modifications: Modifications can increase the value of your vehicle, especially those improving performance or aesthetics. Insurers need to be informed of modifications you make – even if it’s as simple as a new radio

How does my driving history affect my car insurance?

There are several ways your driving history can affect your premiums. The more experienced you are, for instance, the less you should be charged. This will be reflected in your no-claims discount, which gets more substantial the longer you go without claiming.

If, on the other hand, you have a history of accidents or even convictions for speeding or dangerous driving, you’ll find your premiums shoot up.

Telematics insurance is one way to lower your premiums if you believe you’re a safe driver. It works either by fitting a device to your car or giving you an app. These measure how fast you go, how well you take corners and how firmly you break, and you’ll be charged less if you prove yourself to be a sensible driver.

What levels of car insurance cover are there?

The type of insurance you buy and any extras you opt for also affect how much you pay.

Policy type is the most important consideration as discussed earlier, and fully comprehensive car insurance is both the safest and cheapest type overall.

There are also lots of types of specialist insurance, covering sports cars, classic cars, imported cars, cars used for business and so on.

Extras, meanwhile, add a little to the total cost your insurance, but protect you in situations not covered by a standard policy. Options include things like:

Finally, you can also cut your premiums to an extent by voluntarily increasing your excess, which is a sum of money you agree to waive when you make a claim. A high voluntary excess shows your employer that you’ll only claim when it’s really necessary.

Compare car insurance quotes

The best way to get cheaper car insurance is to shop around for the best deal. You can compare quotes from different providers with MoneySuperMarket’s car insurance comparison tool – all you need to do is put in a few details about yourself, your vehicle and your driving history.

You’ll then be able to browse deals, seeing which policy features are included as standard and which features come as optional extras, how much the voluntary and compulsory excess amounts are, and the overall price you’d pay if you opted for a one-off yearly payment versus breaking the cost down into monthly repayments. It’s important to compare policy features as well as price to help you find the right level of car insurance cover.

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