The secrets to cheaper, better car insurance
While costs are going up, and expected to continue rising, it is more important than ever before to shop around for the best deal.
So don’t just focus on fuel economy and cutting prices at the petrol pump; aim for insurance economy too.
In the first week of January, the average cost of car insurance jumped by £43 compared to the same time last year, to hit £680, according to number crunching by ComparetheMarket.
Costs rocketed recently because many insurers hiked up premiums for new customers, following the introduction of new pricing regulations by the Financial Conduct Authority (FCA), the city watchdog.
These new FCA rules, implemented from the start of 2022, prevent insurers from offering discounts exclusively to new customers, while demanding more expensive premiums from existing customers.
Whenever you are searching for car insurance, if you want to get the most bang for your buck, look for lower premiums, better policies and added perks.
Despite the new rules, don’t let your car insurance cruise along and auto-renew
Despite the new FCA rules stopping insurers from charging different prices to new versus existing customers, don’t let your car insurance cruise along and auto-renew - you may still end up paying over the odds if your driving habits have changed.
During the pandemic, many people switched to working from home, and may still be spending less time in the office – and if you drive fewer miles each year, your car insurance could be less expensive.
If you moved from the city to the countryside in search of more space, this could have altered not just your address but also how much you drive – and you should update your insurance accordingly.
If you have ditched a commute altogether, and don’t use your vehicle for business either, say so.
Removing ‘commuting’ so your cover is just for ‘social, domestic and pleasure’ could also cut your car insurance costs.
Pick up perks
When did you last check the offers you can get alongside your insurance?
Some providers offer benefits with their car cover, from extra elements included with your policy to discounts on spending.
Some insurers bundle additional features into their car insurance which you pay separately for elsewhere.
For example, LV= currently includes windscreen cover and replacement locks and keys within its comprehensive car insurance, while John Lewis car insurance also includes windscreen cover, plus a courtesy car during repairs, as standard.
Other providers help you save money on your shopping.
For example, if you buy RAC car insurance or breakdown cover, you can use RAC Rewards, offering discounts on everything from wine and smoothies to flowers and hotel stays.
Similarly, Vitality car insurance customers can currently benefit from weekly rewards such as drinks and food discounts at Café Nero and free movie rentals from Rakuten TV.
You can also pick up perks if you buy car insurance through ComparetheMarket. Meerkat Meals & Movies’ offers both 2 for 1 cinema tickets on Tuesday and Wednesdays and 2 for 1 on starters, main courses and desserts at selected restaurants for a whole year.
Days available vary by outlet and terms and conditions apply.
By taking advantage of these perks, you can shave money off your expenses.
Don’t pay for a policy that won’t pay out
Always take care that you don’t end up forking out for a policy that won’t pay out and avoiding any loopholes.
Take care during the application process so you don’t invalidate your cover.
If you’re not completely transparent when applying for car insurance, it could result in your policy being cancelled or voided.
Resist the temptation to slash how many miles you drive each year, tweak your occupation, forget penalty points on your licence or misrepresent where your car is kept overnight.
Always fess up about who actually drives the car.
Insuring a young driver who has just passed their test can be eye-wateringly expensive.
Yet if a parent or other experienced driver is the main user, and puts their child down as an additional driver, it can shrink the cost.
However, if you claim to be the main driver when you aren’t, that’s actually insurance fraud known as ‘fronting’ – with the risk of a trip to court and a criminal record.
If there is an accident, and the insurance company discovers that the policyholder isn’t the main driver, you could also be left to foot the bills.
You should also tell your insurer if your circumstances change while insured, such as if you move house, lose your job, or get a new job that includes a lot more driving.
Check your policy booklet to discover what you need to tell them when.
Finally, take care while driving, too. An insurer won’t look kindly on accidents while you were eating or drinking at the wheel, for example, or putting on make-up while driving.
3 things to do right now...
Compare car insurance quotes rather than letting your policy auto-renew.
Work out if your annual mileage has shrunk, for example if you now work from home rather than commuting. This should cut your insurance costs.
Check if your insurer offers perks such as discounts on shopping which could save money on your everyday spending.
Please share this with someone who'd benefit from it.
Don’t forget that while you may think that this article is brilliant, it is intended for information purposes only and should not be mistaken for financial advice or recommendations.