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Five ways to lower your car insurance premium

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The cost of car insurance is likely to be going up in January 2022, so buckle up for soaring prices. From the new year, the Financial Conduct Authority (FCA) has ruled car insurance firms can't give existing customers a higher premium than they would new customers. It is likely though that this will instead mean raised prices across the board as insurers try to recoup their losses. 

There are however other ways you can pay less. Here are our top five things to think about when you're after car insurance.

1. DON’T pay the bill each month

Unlike other bills where you get savings for paying by Direct Debit, paying monthly for insurance can cost more. Paying the annual premium in one lump sum is often cheaper.

Keep an eye out for extras you might not need or could already have covered elsewhere. For example, some bank accounts offer breakdown recovery. It might also be cheaper to buy some of these additions separately.

2. Avoid auto-renewal

You'll pay much more if you just let your car insurance roll over each time.

When you get your quote through, call your provider and see if they can offer a discount or match a price elsewhere. If you don’t ask, you don’t get.  

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3. Shop around

The more time and research you put in to getting quotes, the more likely you are to get a better deal.

This is especially important if you are over 70 or under 25, and at the first year renewal when premiums can go up significantly.

If you have the time, get quotes from at least two comparison sites and use insurers and brokers that don’t feature on comparison sites. Remember, cheapest is not necessarily best.

Insurance brokers can also help you find the best deal - and right amount of cover - for you.

4. Reduce the risk

The less risky you are, the lower your premium will be. 

When assessing the likelihood your car will be stolen, motor insurers will take into account factors that may reduce the risk, so if you can put your car in a garage overnight or fit an approved vehicle immobiliser, you should pay less. 

Speeding will driving up your premium – insurers usually charge more if you have points on your licence.

If you're buying a new motor, choosing a fast car is an easy way of paying more for your insurance premium. Selecting a more average model in a lower insurance category will help keep the costs down.

5. Use your no-claims bonus

If you don’t tell a new insurer about your no-claims bonus, then your premium could be higher as a result.

It is worth considering paying an extra premium to protect your no-claims bonus, if you qualify for five years or more of no-claims bonus.

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