Car Insurance for the Unemployed

Find Affordable Quotes for Unemployed Drivers

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If you're unemployed you may have to pay more for your car insurance. So take a look at our tips to help bring the cost of your cover down.

Woman driving a car

Is car insurance for the unemployed more expensive?

As any driver knows, car insurance does not come cheap. But the cost of car insurance for the unemployed can be even more expensive.

A recent report from the BBC showed that those without a job are generally forced to pay more for motor insurance cover than those in full-time employment. In fact, BBC research with three brokers found that, while car insurance premiums averaged almost a third more (30%) for those out of work, in some instances, they could be as much as 63% higher.

This comes at a time when the level of unemployment in the UK is running very high – and when many of those without jobs are struggling to make ends meet. 

If you have had the misfortune of losing your job, you may be worried about your ability to afford higher motor insurance costs

But do not despair if you’re in this position, as it’s our mission at MoneySuperMarket to help you find cheaper car insurance premiums. With just a few clicks of a mouse you can compare unemployed car insurance quotes on offer from a wide range of providers, so that you can find the right deal for you.

We can also help you find ways of keeping a lid on the cost of cover – and hence find cheap car insurance for unemployed drivers.

Why is car insurance for the unemployed more expensive?

When it comes to calculating car insurance premiums, insurers use a range of factors including age of the driver, whether they have convictions – and also their job status. According to the Association of British Insurers (ABI), the accumulated data shows that unemployment is an additional risk for insurers.

There are several reasons for this:

  • Car insurance companies look at how often a motorist will be using their vehicle, and view those who are out of work as likely to use their car more frequently to travel in search of work. Given that the more you drive, the higher the likelihood of you being involved in an accident, car insurance premiums will be higher.
  • Insurers also consider the fact unemployed drivers may be more distracted because of their circumstances, so may drive with less care. They may also be driving along roads that they are not familiar with, and trying to find new addresses to attend job interviews. This may make unemployed drivers more likely to have a bump. Once again, this results in higher costs when it comes to car insurance for the unemployed.
  • Unemployed individuals may also be viewed by insurers as less likely to maintain their vehicles, as they will have less spare cash to spend keeping their car in tip-top condition. In some cases, they will be viewed as a higher credit risk.
  • In addition, insurers say industry figures show there is an increased likelihood of those out of work making a claim – especially among the long-term unemployed. Not only this, but insurers say the long-term unemployed are also more likely to consider making fraudulent claims.

While many of these reasons are rather contentious, there is no escaping the fact that insurers will base unemployed car insurance premiums on their own statistical data. As a result, this translates car insurance for the unemployed being more expensive – with these individuals being discriminated against for being out of work.

How to find cheap car insurance for the unemployed

If you have had the misfortune of losing your job, you may be worried about your ability to afford higher motor insurance costs – especially if you have fallen on hard times since being out of work.

But all is not lost, as there are plenty of steps you can take to find cheaper car insurance for the unemployed.

Compare car insurance quotes

If you’re looking to keep costs down, you should begin your search for car insurance for the unemployed by shopping around online. You can do this by using a price comparison service such as MoneySuperMarket. Also remember that many car insurance companies offer discounts if you buy online – so make the most of these.

Don’t auto-renew

There are few rewards for loyalty when it comes to insurance, so never automatically renew with your existing insurer. Use a site such as MoneySuperMarket where you can compare a wide range of quotes from a wide range of insurers – helping you to find the cheapest quote for your particular circumstances.

Pay your premium upfront

While it may be tempting to spread the cost of your car insurance premium over a year, it makes better financial sense to pay for premiums upfront if you can, as most insurers charge interest on monthly payments, meaning it will cost more to spread payments over 12 months.

Keep your mileage to a minimum

A simple way to keep a lid on the cost of car insurance for the unemployed is by driving fewer miles. The less you drive, the lower the premium you will face – plus you will also make savings on petrol and general wear-and-tear costs for your car. But make sure you are honest about your mileage when applying for insurance or you risk invalidating your cover otherwise.

Pare down your cover

Another easy way to reduce premiums  is by stripping out extras from your policy that you don’t use or need, such as a courtesy car, or legal expenses insurance. By making sure you’re only paying for the cover you actually need, you could find your premium gets a lot cheaper.

Choose a smaller car

Given that insurers categorise cars into 50 different car insurance groups based on factors such engine size and the likely cost of repairs, you can make savings by opting for a smaller car in a cheaper insurance group. To research insurance groups, visit our car insurance groups page.

Don’t modify your motor

Resist the urge to make any modifications to your car, such as spoilers or tinted windows, as this can result in a higher premium. For more information visit our modified car insurance page.

Improve the security

Further savings can be made by parking your car off-road or in a garage overnight and fitting an approved alarm or immobiliser.

Increase the voluntary excess

You may also be able to get cheaper insurance by increasing your voluntary excess. But if you do this, you need to ensure you can still afford the excess if you have to make a claim. If not, you might find yourself in position where you can’t get your car back onto the road.

Consider telematics insurance

In recent years, more and more drivers have been cutting costs by opting for a “black box” or telematics car insurance policy. This type of car insurance rewards safe and sensible driving with discounted premiums.

Drive carefully

It may sound obvious, but if you drive with care and obey the rules of the road, you will reduce the chance of getting points on your licence. This should help you keep costs down. 

Protect your no-claims bonus

Another good way to keep costs down is by building up your no-claims bonus. This can help you knock up to 70% off motor insurance premiums after five years without making a claim. If you do have a minor accident, the key is to weigh up whether or not it’s worth claiming, or whether it makes more sense to simply pay for the repairs yourself.

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