In the words of Benjamin Franklin to Jean-Baptiste Leroy (1789): “In this world nothing can be said to be certain, except death and taxes." Benjamin, who is regarded as one of the “Founding Fathers of the United States”, could, had it been around in those days, have included the annual increase in motor car insurance premiums.
How Much Is Car Insurance Going To Increase?
This year it is not just the usual increase, it is a massive hike, because it is expected that insurance for cars is going to increase by as much as 14% this year, and the swinging increases are across the board and not aimed at any particular group of drivers of any particular age.
The average cost in the coming year will be in the region of £800, partly due to the hike in insurance premiums that have been forced upon motorists by the government, motoring, of course, being a firm favourite of governments of all colours to fund both necessary financial obligations as well as other projects.
Finding Cheap Car Insurance
With motor vehicle insurance being a compulsory legal requirement, finding cheap car insurance is now more important than it has perhaps been for many years. We cannot do anything about the insurance premiums as these are dictated by government, but because these are a percentage of the premium, the lower this is the less tax there will be, and so we suggest that there are some ways in which you can lower the overall amount that you pay.
It is not only the premium tax that has caused insurance premiums to rise, the Lord Chancellor announced a change to the Ogden discount rate, which is used to calculate compensation awards for serious personal injuries. This was to ensure inflation does not erode the future value of a pay-out, and this is sure to increase premiums.
Shop Around
It may seem pretty obvious, but before you just accept the price on the renewal quotation shop around. There are plenty of price comparison websites out there these days that allow you to get a really great picture of what the different companies are offering. Make notes and before you plunge in, contact the insurers direct, there may be a commission inbuilt that you could save. You should also contact your current insurers and offer them the chance to match the price, if they will not, then wave them goodbye.
Avoid Monthly Payments If Possible
It may be tempting, but always pay the premium up front and not on the monthly payments scheme offered. You will save the cost of interest, you can do this by putting a monthly amount into a saving account ready for the time when the insurance becomes due.
Consider Your Excess Payment
Increasing the amount of excess is sure to save on the premium, as a general rule of thumb, the higher your excess, the lower your premium. However, it is vital to understand that before you whack up the excess, ensure that in the event of an accident you will be required to stump it up and that is before your insurer will pay out.
Review Policy Add Ons
Increasing the number of drivers on the policy can also reduce the initial premium quoted, just in the same way that cutting out potentially unnecessary add on items does. These include items such as personal accident cover, windscreen cover and driving abroad. These sorts of thing might be found cheaper elsewhere if you feel you need it, sometimes they may be already covered on home insurance or possibly your bank.
This also applies to paying extra to guarantee no claims discounts. None of us plan to have an accident and minor bumps and scrapes can usually be sorted out without the need to claim and lose 60% discount by going to a local body shop and paying for work to be done.
Think About Your Job Title
For reasons best known to the insurance world, the job title that you put down on the proposal can have a huge effect on the premium charged. Examples of this can be that if you are cooking in the kitchen, but put down chef, your average quote will be £98 higher than if you write kitchen staff.
Weirdly a Music Teacher pays £86 more than does someone described as a teacher, office managers pay more than office administrators, and construction workers pay more than builders, but in turn they will pay more than someone who probably correctly describes themselves as a bricklayer. Job titles might impress your friends, but it matters not a “jot” to the insurers other than collecting some more money. Obviously being accurate and honest is important here, but consider accurate alternatives if possible.
Plan Ahead
Another sensible tip is not to wait until the last minute to shop around for the best car insurance, do this around three weeks before it is due and not on the day or day before you need to insure. Trying before the three weeks does not work as most comparison sites will not offer any quotes.
Install A Dashcam
There has been another development which has meant that with some insurers, lower premiums are being quoted. Dash cams are great fun, they also can be very useful in the event of disputes, but insurers are starting to love them. Companies such as Axa and Swiftcover offer discounts of 10-12.5% for drivers who install the device, recent figures reveal that there are 3 million that are believed to be in use in UK cars.
Another good use for the dash cam is in the event of insurers reducing a no claims discount after an accident where someone can use video evidence to show they were not at fault can help. This is of course a contentious area as the insurers rightly point out that it is a “no claims” not a “no blame” discount that is offered, so it can be useful to ensure that your insurers do not pay out, but claim against that other driver; it can be a tricky one.
Avoid Paying Commission When Possible
Now many people use a good insurance broker and they do an excellent job, but often they can be tied in, or get better commission from certain insurers. In these cases it is possibly that you may not be getting very cheap car insurance, but the best commission for the broker.
We do not suggest that you abandon your broker; get a quotation for your insurance from them, but importantly going online, comparing car insurance is a simple but effective way to reduce the price you pay for cover, suggest that the broker matches the price, if not walk away.
Are You Getting The Best Deal?
Always compare cheap car insurance quotes to see how much you can save by switching insurers, but always remember that you must make sure you are comparing like for like cover, with voluntary excesses set at the same level and including any extras that you would usually add on. A sure and certain thing is that insurance companies rarely offer their very best deals to existing customers; they keep these for new customers, normally coming to them from an online search.
Review Annual Mileage
Another way of keeping down or even reducing the premium proposed is thinking carefully about how far you really drive in your vehicle each year. Try if possibly to agree to a lower annual mileage cap than you did last time you bought insurance, it’s possible you’ll save money.
If there is more than one car in the family, this can be a lot easier as usually one vehicle is likely to do more miles in a year than the other, not always obvious until a mileage check is done on both cars, but remember, if you exceed the agreed mileage and are involved in an accident, repairers normally photograph the odometer and you might find that you claim is thrown out. If you have agreed a set mileage and you are approaching this, contact the insurers and they will agree extra miles, at a cost of course, but better than a rejected claim that could set you back thousands of pounds.
What About Young Drivers?
We have looked at ways in which drivers can save money on their motor insurance, but what about young drivers who for many good reasons pay huge amounts in premiums? There are ways in which the new or young drivers can save on premiums. Telematics can be the answer otherwise known as Black Box insurance.
This insurance works when your car is fitted with a small ‘black box’ device, about the size of a smartphone, which records speed, distance travelled and the time of day or night that you are on the road.
The device also assesses your driving style by monitoring braking and cornering. It will also record the types of road on which you typically travel, and the times of day and night you tend to drive, to build up a comprehensive profile of you as a driver.
To put this simply, it is assumed that driving fewer miles on less dangerous roads, whilst also limiting your night time driving, will result in lower premiums and another big plus for the young driver is that these policies which are linked to the black box charge premiums on a monthly basis; this means the insurer can adjust them swiftly to reward better driving, conversely for poor, dangerous, or bad driving the prices will increase.
There are a number of insurers that offer “Black Box” insurance, shop around and get the best deal, prices will vary from insurer to insurer as each will have different per-mile and peak-time driving charges.
Consider what you really need from your motor insurance policy; carefully check out the suggestions, by doing so we feel sure that you will be able to lower the quotation that might be landing on your doorstep soon.
