With prices for goods and services rising dramatically at the moment, now might be a good time to review your outgoings and see where you might be able to save some money. Car insurance is a great place to start as you can save yourself a lot of money if you know how to do it. Here are eight tips to help you reduce the cost of car insurance.
Many people make the mistake of using the same company they have always used but you are not always rewarded for your loyalty. Before you blindly pay the same insurance company another annual premium, it is best to shop around for car insurance and see if you can get a cheaper quote. Car insurance premiums change from year to year, and so do your circumstances, so you shouldn’t assume that the company that was cheapest last year will offer you the best deal this year.
If you can afford to, paying upfront could save you a considerable amount of money. Car insurance companies often charge one fee if you pay an annual premium but increase the cost if you are going to pay monthly. That is because they like to receive lump sums rather than monthly payments and they encourage this through their charging structure.
Cap Your Mileage
If you don’t use your car a lot, it is worth comparing quotes to see if you can save money by capping your mileage. The average car is driven around 10,000 miles per year and car insurance premiums are based on this average. However, if you know you drive a lot less and state this to the insurance company it can bring your premiums down as driving less reduces your chances of having an accident.
Increase Your Excess
The excess is how much money you would have to pay towards a repair bill before the insurance company would pay out. For example, if you have an excess of £250 and your repair bill was £1,000 then the insurance company would pay out £750 of the claim and you would be liable for the rest. However, if you had an excess of £500 then the insurance company would only have to pay out £500 if you claimed but you would have to pay the other £500.
This means that if you have a higher excess, it costs the insurance company less money in the event of you making a claim and so your monthly premiums can be cheaper. If you are a careful driver and you don’t have many accidents, then increasing your excess could save you money.
Tweak Your Job Title
You should always tell the truth when applying for insurance as it can invalidate your claim if you don’t. However, there is a difference between tweaking and outright lying and this can save you lots of money on your car insurance. For example, describing yourself as a cook rather than a chef could save you money as more chefs claim on their insurance policies than cooks. This is not because they necessarily have more accidents but as more people would describe themselves as a chef rather than a cook, the statistics are skewed. As insurance companies don’t like taking risks you would be put in a higher premium bracket if you describe yourself as a chef and a lower one if you describe yourself as a cook, thus saving you money.
Add a Driver
Adding a driver can save you money if the additional driver has been driving for a while without making a claim. If they are seen as being low risk it can decrease your insurance, especially if you are considered to be a higher risk. This often works for young drivers who put a parent on their insurance policy. However, the additional driver does need to use the car too on occasion otherwise it can invalidate your insurance.
Protect Your No Claims
This sounds like a contradiction because your car insurance company will charge you to protect your no claims. However, if you have an accident and you lose your no claims discount, the following year’s insurance premium will be considerably higher. You will wish that you had protected your no claims allowance.
Believe it or not, it isn’t considered safest to park your car in the garage. This is because garages tend to be narrow and lots of people make claims when they accidentally hit the wall or the garage door. Although parking your car on the street makes it more susceptible to theft, it might make the insurance premium cheaper. The cheapest place to park is on your driveway.
There are many ways to bring down your car insurance premiums. Follow these eight tips and see how much money you can save.