How to take advantage of cheaper car insurance prices

We’ve crunched the numbers and revealed that car insurance prices are the cheapest they’ve been for five years…

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If your car insurance is up for renewal, now is the ideal time to switch to a new deal. Fully comprehensive car insurance premiums have fallen to their lowest levels since March 2015, with the average premium in April standing at £462.62, our data shows.

Whether there’s any link to the coronavirus crisis is difficult to say for certain, but it is likely to be a factor. A consequence of lockdown has been that there are fewer cars on the roads, meaning fewer accidents – so it’s fair to assume that this could result in reduced prices.

It also means motorists could potentially save hundreds of pounds by switching to a new insurance provider rather than automatically renewing their existing policy.

The cheapest and most expensive areas

Where you live can affect how much you pay for your car insurance, and our latest figures show that Llandrindod Wells in Wales has the cheapest car insurance premiums, at an average of £300 in the first quarter of this year.

Kirkwall in Scotland (£302) and Dorchester (£303) took second and third place, respectively.

In contrast, East London has the most expensive car insurance premiums at an average of £986, with Ilford & Barking (£900) and North West London (£887) in second and third place.

Younger drivers still pay the most for their car insurance, with prices over three times more expensive for drivers aged under 25 than for those over 50.

Insurance and lockdown

With fewer people driving, car insurance providers are under increasing pressure to lower costs or offer refunds to those who are not using their vehicle during lockdown or who are driving less frequently.

Admiral Group – which includes Admiral, Bell, Diamond and Elephant brands - recently announced a £25 automatic refund for its car and van insurance policyholders.

LV, meanwhile, has created a £30million fund to provide refunds to its car and motorbike insurance customers who are struggling financially. LV says it will give between £20 to £50 to eligible customers.

Other insurers have yet to offer refunds but may be morally pressured to do so. You can read more about car insurance and coronavirus in our article.

Shop around for the best deal

Falling car insurance prices mean it’s more important than ever to shop around and compare car insurance quotes when your policy is up for renewal. Insurers rarely offer their best prices to existing customers, so resist the temptation to simply accept your insurer’s renewal quote.

Switching to a better deal could save you up to £269* and if you sign up to our Car Monitor, we will remind you when your insurance is due.

Note that when you are running a car insurance quote, you should answer questions to reflect your normal circumstances and not your driving habits during lockdown. This means they shouldn’t reflect the fact you now drive fewer miles, for example, or that you no longer use your car for business purposes. This will ensure you have the right cover in place for when restrictions are lifted.

*51% of consumers could save up to £269.82 Consumer Intelligence March 2020.

Further ways to save on car insurance

There are many ways to bring down the cost of car insurance even further. Take a look at our tips below:

  • Increase your excess: Opting for a higher voluntary excess will help to lower your premium. But make sure you can still afford to pay the excess if you had to make a claim.
  • Pay annually: Paying for your car insurance premiums in monthly instalments will cost more than if you pay annually as many insurers charge interest. If you can’t afford to pay in one go, consider using an interest-free purchase credit card to help spread the cost. Just be sure to clear the balance before the interest-free deal ends.
  • Consider extras carefully: Check whether extras such as legal expenses cover, courtesy car cover and windscreen cover are included as standard or whether you have to pay extra. If they are an additional cost, consider whether you actually need them or whether you could cope without.
  • Keep your car safe: Keeping your car on your driveway or in a locked garage reduces the chances of it being vandalised or stolen. Adding devices such as immobilisers, tracking devices and alarms will also help boost security.
  • Add a named driver: If you are a younger driver, adding an older, more experienced driver to your policy can help to lower premiums. However, be sure that the person listed as the main driver is the one who drives the car the most, otherwise you will be committing an illegal practice known as ‘fronting’.
  • Think about telematics: Telematics insurance means your car will be fitted with a data-recording device to monitor your driving habits. Your insurance premiums will then be adjusted according to how safely you drive.

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