A simples guide

How is car insurance calculated?

Car insurance is there to protect us. The cost of an accident or an injury can far outweigh what we ever pay into our policies.


However, thing with car insurance, is that it often feels as though it just keeps going up year after year. But fear not, let our car insurance calculator save the day.

Car insurance calculator saves the day

Our car insurance calculator can help you plan your future budgets, and if you use our tips below you could also reduce your insurance quote and find a cheaper policy. You can't change things like your age and you might not want to move, but the insurance calculator can help with other things.

For example:

The type of car you have can affect your insurance cost. If you're buying a new car, make a selection of cars you like and use the insurance calculator to see how the premium changes depending on the car. The group, value, engine size and even desirability are all factors that are taken into account.

Insurance premiums can be reduced if you have approved security systems like Thatcham fitted. Use the car insurance calculator to see what you would save if your car had such a system, work out how much it would cost to install it, and you can see if it’s worth doing.

If you don't have a driveway or garage, but have an option to rent somewhere safe to store your car, you can use the calculator to see how much money you would save if you did keep it in a garage.

Another way to reduce your insurance costs is to change the type of cover.  You can enter different levels in the insurance calculator and see the cost difference. But, before you choose third party cover just because you expect it to be the cheapest – it's important to consider that you’ll only be covered for damage you cause to another party or their property, and your own car and good self won't be covered.

You can also play about with your voluntary excess on the calculator. The higher your excess the more your premium will reduce. There may also be a compulsory excess so just make sure you can afford the total excess should you need to make a claim.

Car calculator

So, with the help of our car insurance calculator, you can go forth armed with information to take on the challenge of lowering your insurance quotes. But what else affects the cost of your car insurance...?

How is car insurance calculated?

Firstly, and probably the most irritating because it has nothing to do with you, the Government charges an Insurance Premium Tax (IPT) to insurers which is then passed onto you. In November 2015 it increased from 6% to 9.5%.

Another factor which has no bearing on your driving history is caused by the many claims for minor injuries.  With the rise of 'no win, no fee' firms, claims for whiplash and other complaints have increased. The cost to insurers has also increased our premiums.  In an attempt to curb these claims, Chancellor George Osborne is putting legislation in place to make it more difficult to claim. As The Telegraph reports, this should help reduce our premiums - or just counteract the rise the IPT that has been put into place. It might even mean a reduction in the number of unsolicited phone calls we all get about ‘your recent accident’.

Finally – another major factor in the cost of your premium is your own individual characteristics as a driver. Premiums are based on statistics and facts – so let's take a look at what affects our insurance premiums.



If you're aged between 17 and 25, look away now. The painful truth is that car insurance for these age groups is the most expensive. This is because statistically that age group has the most accidents and are therefore more likely to make a claim. At least here's one good reason to get nearer to 30.

Where you live

The risks insurers look at include the likelihood of your car being damaged or stolen. As your home and work are where your car is likely to be parked for the majority of the time, this has to be taken into account. Insurers look at the local crime rate and the types of roads you park on – whether they are urban or rural and how many accidents have happened in the area. They also consider the risk of it getting damaged overnight.

Your car

The type of car you drive has a huge impact on your premiums too. Amongst other things, the value and the insurance group it's in will affect it (more info on this. Also your insurer will want to know about any modifications the car may have had. This can work in your favour – if it's been fitted with security systems that could reduce your payments. If it's had an exhaust the size of Dartford Tunnel fitted then it's highly likely your premiums will rise.

blue car

How you use your car

What you do with your car is important. The more time you spend driving, and the number of miles you do each year, the higher the risk of having an accident and making a claim. If you use it for business, that could have an effect too.

Driving history

If you have any convictions and motoring offences this could increase your premium, by how much will depend on what the conviction is. Insurers will also want to know about recent accidents/claims you've had. That’s why your no claims discount is important.

Car insurance calculator

Use our calculator to get a new car insurance quote in seconds and start saving.

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