Accessing the right car insurance quote can be time-consuming and confusing; getting it wrong can be costly and stressful. At VCARS.co.uk, we’re all about making your next car purchase as easy as possible. So, we thought we’d arm you with everything you need to know to make your next car insurance phone call as easy as possible. Understanding exactly how car insurance premiums are calculated can save you time, money and sanity.
First of all…
Things you can’t change…
Clearly, if you’ve only just started driving you are statistically more likely to have an accident than if you’re a well-seasoned motorist. In 2010, of the 6506 people killed or injured on roads in this country, just over a quarter were in their teens/early twenties. Car insurance costs are higher for groups more likely to use their service so if you’re between 17 and 25, expect to pay more for your insurance. If you are a new driver, you might want to take the Pass-Plus Scheme. Pass-Plus is a post-test scheme which gives lessons on things like motorway driving, driving in difficult conditions and in the countryside. Taking the additional lessons can save you as must a third off your insurance costs.
While women make more insurance claims than men, they tend to be for incidents at lower speeds and incur less cost. Men make fewer claims but are ultimately more costly to the insurance industry. As a result, historically women’s car insurance has been cheaper than men’s. From December 21st of 2012 however, a piece of European legislation made it illegal for insurance companies to discriminate on grounds of gender – women should expect their insurance premiums to rise as a result.
Insurance companies reward you for not using their service. Very often, but not always, drivers can save money earning a ‘No Claims Discount’. Do remember, if you make a claim on your car insurance, your No Claims Discount can be affected. You can often pay extra to protect the discount – you’ll be able to make a number of claims without damaging your NCD – thought monthly costs are likely to go up. Your insurance limit can also be affected by any penalty points you incur. Remember to let your insurance company know if you are issued penalty points at any time.
Where you live affects your insurance costs. Insurance companies know in which postcode cars are more likely to be stolen or vandalised – driving up your costs. While we’re saying you can’t really change your address you can, of course, change where your car is kept – keep that in mind and asked your insurance company about the implications. If you have access to a garage, allowing you to keep your car safe overnight, this can save you a heap of money.
Your credit history can powerfully affect how much your car insurance can cost. It might be worth asking the person who is running your car insurance if this is adversely affecting your quote. Shop around to find a company who don’t add as much leverage to credit history.
Things you can change…
If you buy a cheap run around with excellent fuel consumption, it will cost less to insure than a high performance, modified speed machine. The reason? You’re less likely to have an accident and, if you do, repair costs incurred by your insurance company will be less. You’ll also need to know which Insurance Group your car fits into. Groups range from 1-50, 1 being cheapest.
When you obtain a car insurance quote, you will be asked to project your annual distance. Try not to over-quote, more miles equal more money.
If you have an immobiliser or an alarm fitted to your car it is less likely to be stolen, this means your ride is a lower risk and insurance companies will reduce your costs.
Married people settle down and have less accidents so being hitched means you’ll pay less.
Car insurance is all about projecting risk. If you’re a delivery driver who uses their car every day as part of your job, it’s different from working from home. The delivery driver would pay higher costs. Think about how far you actually travel and when.
There are three types of car insurance: 1) Third Party Only, 2) Third Party, Fire and Theft, 3) Comprehensive.
Third Party Only does not cover any damage to your car. It covers damage you do to another vehicle. This is the cheapest form of insurance and best for old cars. Next most expensive is Third Party, Fire and Theft which means you’ll be able to claim damage to another car (The Third Party) get a payout if your car burns out or is stolen. Comprehensive is (usually) the most expensive and covers damage to your car and damage to other cars. If, for example, you reverse park into a bollard, you’ll be able to claim repair costs on your insurance as well as all of the above.
Check your policy – some insurers include windscreen cover, legal expenses, courtesy cars and breakdown – you might not need these and be covered elsewhere.
You might be able to save some monthly repayments by adding what’s called an ‘excess’ to your policy. If your excess is £100, you’ll pay the first £100 of any claim and your insurance company the rest. This often reduces your monthly outlay.
It is often cheaper for you to pay the whole of your car insurance up front instead of each month. If you pay in monthly instalments you will generally incur extra interest costs, if you can afford it may be better to pay the whole amount in one go.
Quite a recent addition to the insurance mix, the installation of a ‘telematic black box’ records how, when and where you drive. This approach can save you money, if you are prepared to limit your driving distance and avoid rush hour traffic, for example. Telematics can be especially good for young drivers looking to prove their safe driving habits.
Adding an older relative to your car policy is a way for reducing costs, particularly if you’re a young driver. It statistically dilutes the chance of a young driver having an accident. What you shouldn’t do is make a named (additional) driver the main driver. This is call ‘fronting’ and is fraudulent. It could get the young and older driver in all sorts of trouble.
If you’re not insuring your car, remember to declare it SORN (Statutory off Road Notice) – this means it’s not on the road. If your car is not SORN and is being driven around you could get fined and lose your vehicle permanently.
There’s our handy trip through the world of car insurance, if you have any other questions for our experts, please do get in touch.