How to get cheaper car insurance

According to Consumer Intelligence, in the last year car insurance costs have risen by around 34%Opens in a new window

Here are some ways to cut the cost of your car insurance to make it as affordable as possible. You can also find out what the average cost of car insurance is.

Every car is in a different insurance group. This is based on factors such as:

• the car’s value
• how long it would take to repair
• the car’s performance
• safety and security features.

The groups are numbered from 1 to 50. The lower the group, the lower the insurance cost.

Generally, smaller and more economic models will be in lower insurance groups, while cars with powerful engines will sit in higher groups.

You can check the insurance group of a car on MoneySupermarketOpens in a new window

Automatic cars can sometimes be more expensive to insure because they have higher repair costs.

However, there are a wide range of factors that insurers consider. Depending on your insurer, having an automatic car might not make a difference to your insurance costs. 

Insurance costs for electric cars can be higher, because they’ll often have expensive parts and need specialist repairs if anything goes wrong.

While the car’s cost and insurance might be higher, the running costs for an electric car are usually lower – so think about whether it’s worth paying a bit more in insurance.

Older cars will often be cheaper to insure because they:

• are less valuable than a new car
• will be cheaper to repair
• are more likely to be ‘written off’ rather than repaired after an accident.

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

There are a number of popular comparison sites, including:

• Compare the MarketOpens in a new window
• GoCompareOpens in a new window
• MoneySuperMarketOpens in a new window

It’s a good idea to use at least two comparison sites, as not all insurers are on every site. You can also use an insurance broker, which can be useful if you need something specific in your insurance policy.

Most comparison sites will give you three different levels of cover to choose from:

• Third party only – this means that you’re only insured for damage you cause to other cars or property. You won’t get paid for any damage to your car.
• Third party, fire and theft – this includes third party cover, but with added cover if your car is damaged by fire or stolen.
• Comprehensive – this covers everything above, plus damage to your car caused by accidents.

It’s sensible to get comprehensive insurance if you can, as the other options will mean you’re at risk of losing your car without compensation if you have an accident.

The timing of your car insurance renewal can sometimes make a difference on the cost.

Research by MoneySavingExpertOpens in a new window has found that getting your car insurance quotes 20-27 days before your policy needs to start can be the best time to find lower prices.

If you’re going to speak to your insurer to renew, it can be a good idea to call during the quieter morning hours. Or, you could speak to them during the evening when they’ll be keen to close deals before the end of the day.

Whatever you do, it’s always best to get quotes before your insurance auto-renews.

There are a lot of different ways to try and get cheaper car insurance quotes. These are some of the things you might want to try.

Insurance companies will ask you how many miles you drive every year. This is one factor used to calculate your overall insurance cost.

Lower mileage means you’re less likely to have an accident, so reducing your annual mileage will usually lower your insurance cost.

However, if you go beyond your mileage and need to make an insurance claim, your insurance might no longer be valid – so make sure you give an accurate mileage when looking at quotes.

You might be tempted to go for a reduced level of insurance cover to lower your cost. However, it doesn’t always work out this way.

Insurance costs are based on ‘risk’, and comprehensive cover can sometimes be a sign you’re a more responsible driver than if you get third party cover. So, it might not save you any money to reduce your cover.

Also, think about what would happen if your car was written off because of an accident. You’d get no compensation, and would lose an item that’s cost you thousands of pounds (or you might be locked into making payments for a car you no longer have).

You have the choice of paying for your insurance monthly or annually. The annual cost is usually a bit lower than if you pay monthly, so it’s an option if it’s something you can afford.

Focus only on the cover you need when getting insurance quotes. Some insurers might try to throw in add-ons, including:

• windscreen cover
• use of a courtesy car
• legal expenses cover.

Think carefully about whether you need these extras. If you don’t, it’s likely that you can remove them to get a cheaper quote.

Another way to lower your insurance cost is to add voluntary excess. This is the amount you’ll need to pay if you make an insurance claim.

Higher excess usually means lower cost. But think carefully, as there’s a chance you’ll need to pay this amount if you have to make a claim – so make sure you’d be able to afford it.

For every year you drive without making a claim on your insurance, you’ll build up your no claims bonus. This can give you big discount – even just one year of no claims bonus can lower your insurance costs by around 30%.

If you’re moving to a new insurer, you can usually transfer your no claims bonus to your new provider. This means you won’t lose out by finding a better deal elsewhere.

You can also protect your no claims bonus so that you don’t lose it if you have an accident. However, protecting it can increase your renewal costs slightly. Learn more on our blog post Should I protect my no claims bonus.

Adding an experienced driver to your car insurance policy can sometimes help reduce the cost. This is a good option for young drivers, who could put a family member on their policy.

Make sure whoever will be using the car most is listed as the main driver on the insurance policy. If you don’t, you’ll be committing a type of car insurance fraud called ‘fronting’, which is illegal.

If you only use a car every now and then, pay-as-you-go insurance can sometimes be a cheaper option for you.

With these policies, you’ll pay a cost based on the amount of time or miles you drive. They can be cheaper if you drive during quieter hours.

But it doesn’t always work out this way – sometimes these are seen as ‘high risk’ policies so can end up being a lot more expensive.

Learn more in our blog post What is pay-as-you-go car insurance?

If you have more than one car in your household, it’s often cheaper to get a multi-car insurance policy.

Every additional car will usually be added at a discounted rate, making it a good way to lower your overall cost.

Telematics insurance is a type of policy where a monitoring device is fitted in your car. It tracks your driving behaviour and rewards you with a lower insurance cost if your driving is safe.

Telematics insurance quotes are usually a bit cheaper, so it can be a good option for young and safe drivers. However, you should only think about getting a telematics policy if you’re a very safe driver, or you could be risking even higher insurance costs.

Learn more about car insurance for young drivers.

You’ll need to let your insurer know if your car is modified in any way.

Your insurance cost is likely to go up if your car has been modified. This is because modifications can make repairs more expensive, and can also make the car more attractive to thieves.

Another question your insurer will ask is where your car is kept.

If you have the option to keep it in a secure location, especially off the street, this can lower your insurance costs.

There are FCA regulations that prevent insurers from charging existing customers more than new ones. However, this doesn’t mean you’re getting the best deal if you stay with your current provider.

It’s always best to compare quotes from a range of insurers before renewing, as there’s a chance that you’ll find a cheaper, better deal.

There are many other factors that insurers will take into account when calculating your insurance cost. This includes:

• your age
• your driving history (such as if you’ve had a speeding ticket or an accident)
• your job
• if you use the car to commute
• where you live.

You can find further help about getting insurance if you have a criminal conviction.