Table of Contents
- 1. Don’t assume any one insurer is the cheapest
- 2. Choose the right level of cover
- 3. Only pay for the cover you need
- 4. Don’t auto-renew
- 5. Take care of your no-claims discount
- 6. Check insurance costs when buying a car
- 7. Check for multi-policy discounts
- 8. Pay for your cover annually
- 9. Watch your mileage
- 10. Keep your car safe and secure
- 11. Stick to the rules of the road
- 12. Increase your excess
- 13. Add a more experienced driver
- 14. Consider ‘black box’ insurance
- 15. Modify in moderation
- 16. Think about your job title
- 17. Make sure you’re on the electoral roll
- Frequently asked questions
Finding the cheapest car insurance can save you a lot of money, but it isn’t always obvious how to get lower premiums.
Dozens of car insurance companies, large and small, are vying for your business. Many have a number of cover options, making it hard to compare policies and figure out who’s offering lower car insurance rates.
Here are 17 tips on how to get cheap car insurance that best fits your needs.
1. Don’t assume any one insurer is the cheapest
Some insurance companies spend a lot of money on advertising to convince you they offer the lowest car insurance premiums. But no single insurer will offer the best price for everyone. The cheapest car insurance provider for one person might be the most expensive option for a different driver.
The best way to ensure you get the lowest rate possible is to compare car insurance quotes.
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2. Choose the right level of cover
Picking the cover that best suits your needs is a must, and there may be some surprising differences between the amount you pay for each. The natural assumption is that fully comprehensive car insurance will always cost the most, but that isn’t always the case. If you’re considering third party car insurance, it may pay to check the price of a comprehensive policy, just in case it’s cheaper.
Comprehensive
‘Fully comp’ covers damage to your car or its loss due to an accident, vandalism, being stolen, or a fire. It should cover the cost of repairs or replacing your car, as well as the medical costs for you, and your passengers, if you’re injured. It can also cover the cost of damage to someone else’s car or property, and their medical costs.
Third party
This provides cover if you’re involved in an accident that causes damage to someone else’s vehicle or property, as well as potential compensation for any injuries they may have. Crucially, however, there’s no payout to cover the cost of any damage to your own car or your own medical bills, or if it’s stolen.
Third party, fire and theft
This offers the same protection as third party cover, but also includes cover if your car is damaged by fire or stolen.
3. Only pay for the cover you need
Insurance companies will offer you the chance to buy all sorts of optional extras when taking out a policy. Typically these include motor legal protection, personal accident cover, and added protection in case anything happens to your windscreen, keys, personal belongings or you break down. All could prove useful, but each will add to the cost of your premium. So weigh up carefully whether you think they are truly worthwhile. You may also find some elements, such as breakdown cover, that are cheaper elsewhere.
» MORE: Compare breakdown cover
4. Don’t auto-renew
It’s easy to stick with your current insurer and accept their renewal quote when your existing policy is about to end. However, you should never let your cover auto-renew without checking to see if you can save with a different insurer.
5. Take care of your no-claims discount
If you’ve never had an accident or made a claim, the no-claims discount (NCD) you build up can save you a lot of money. According to the Association of British Insurers, going a single year without making a claim can lower your premium by as much as 30%, while five years’ of NCD may save you up to 60%. You’ll have the option to protect your no-claims bonus when taking a policy out. It will cost extra, but it may also mean your NCD remains intact if you do make a claim. If you don’t have protection, and are considering a fairly minor claim, you may want to think carefully before doing so.
6. Check insurance costs when buying a car
The cost of car insurance depends heavily on the make, model and value of your car. As you might expect, a newer, or more expensive car will likely lead to higher premiums. Insurers also account for factors such as the estimated cost of repairs and its potential appeal to thieves.
You probably already pay attention to factors such as fuel efficiency and reliability when picking a car to buy, but it also pays to consider the cost of insurance premiums before making your final choice. If you have a car of a certain vintage, you can also get specialist classic car insurance too.
What is the cheapest car to insure?
Some of the cheapest cars to insure in 2024 are a Fiat Panda, Toyota Aygo X, and Kia Picanto, according to Whatcar? The cheapest insurance can usually be found on smaller, older vehicles and cars which have lower running costs. These characteristics mean they’ll usually fall into a low car insurance group, where the lowest premiums tend to be offered.
7. Check for multi-policy discounts
There are several ways you may get a discount on your car insurance. Some insurers offer discounts on multi-car policies, which may be an option if you have more than one car in your household. Others may offer a better deal if you already have, or are willing to take out, another policy with them, such as van insurance or home insurance. However, it’s important to always check whether separate policies for each will work out cheaper.
» MORE: Compare home insurance
8. Pay for your cover annually
As with most types of insurance, it’s likely to cost more overall if you decide to pay for your cover monthly instead of annually. You’ll probably pay less if you can afford the full year upfront.
9. Watch your mileage
The less time you spend on the road, the cheaper your car insurance is likely to be. More miles means higher premiums, so estimate the distance you cover each year carefully when taking a policy out. If you don’t drive much at all, you may save by opting for a pay-as-you-go policy, where the insurer tracks how far, or how long, you drive, and charges you accordingly.
10. Keep your car safe and secure
If you keep your car off the road, either on your driveway or in a garage, this may reduce the chances of your vehicle being hit by another car while parked, vandalised or stolen. Investing in a better alarm system, or an immobiliser, could also lead to cheaper premiums.
11. Stick to the rules of the road
Speeding fines and other driving offences can make your car insurance far more expensive than it needs to be. According to Admiral, having between four and six penalty points on your driving licence due to speeding on a public road will increase the average premium by 58%. If you have seven or more points, you’ll pay 94% more, so almost double than if your driving record was clean.
12. Increase your excess
The excess on an insurance policy is the amount you agree to pay yourself if you make a successful claim. With car insurance, there’s a compulsory excess that you’ll always have to pay, and a voluntary excess that you get to set when taking out a policy. The crucial point here is that premiums tend to get cheaper if you’re willing to pay a higher excess. But this should only be an option if you know you can afford the higher amount if you ever need to make a claim.
Tim Leonard, Senior Writer and Car Insurance Expert at NerdWallet
What our Nerds say…
“I always compare car insurance quotes using different excess amounts to see how much I could save if I pick a higher excess. That being said, I will never check an amount higher than what I’m confident I’ll be able to afford should I need to make a claim.”
13. Add a more experienced driver
If you’ve not been driving long, adding a named driver to your policy who has more experience behind the wheel than you could reduce your premium. For example, adding a parent to a child’s car insurance policy when they’re starting out as drivers.
14. Consider ‘black box’ insurance
With a black box policy, there’ll be technology in your car which feeds information back to your insurer about how you drive and when.
If the insurance company thinks you’re a good driver, who keeps to the speed limit and brakes appropriately, or someone who only drives when the roads are quiet, you could see your premiums go down. This type of cover, which is also sometimes referred to as telematics insurance, may be useful if you’ve only recently passed your test.
15. Modify in moderation
If you’re thinking of upgrading your sound system, getting customised wheels or enhancing your exhaust, such modifications may impact your premiums. As well as adding to the value of your car, which can hike your premium, insurers may also think the upgrades increase the likelihood of it being targeted by thieves.
16. Think about your job title
Your occupation affects your car insurance because insurers believe certain lines of work increase the chances of you having to make a claim. You must ALWAYS be honest about what you do for a living. But if a few different job titles can be legitimately applied to you, check whether describing yourself as an editor rather than a journalist, for example, could save you money.
17. Make sure you’re on the electoral roll
Whether you’re registered on the electoral roll or not can impact the price of your car insurance. If insurers can’t see you on the roll when making identity checks, it could mean you’re offered a higher premium, or not given a quote at all. Being registered may also improve your credit score, which can lead to cheaper premiums.
» MORE: Why is car insurance so expensive?
Frequently asked questions
Shopping around for car insurance is the best way to get a good deal. Paying for your cover annually, increasing your excess, and building up a no-claims discount are other reliable ways to lower your car insurance premium.
No one insurance company offers the cheapest car insurance for everyone. That’s why it’s important to shop around and find the right policy for you at the right price.
There is no definitive day when car insurance will be at its cheapest, but some studies have suggested it’s best to start searching three or four weeks before you need your new policy to begin.
Younger and less experienced drivers generally pay the most for car insurance because data shows they are most likely to need to make a claim.
The cheapest car insurance group is group 1. All cars sit within an insurance group, ranging from one to 50, mainly depending on the value of the car. Group one cars tend to have the lowest premiums and group 50 cars have the highest.
Electric cars typically have more expensive car insurance because of their higher price and the specialist parts that may be needed for repairs.
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