Nobody likes paying car insurance, but it’s a lot less painful when you score a good deal. Unfortunately, it’s one of those niggling jobs – it takes time to research, compare and contact providers, and having to enter all your personal details, usage, and past claims is such a drag, the temptation to let the auto-renew roll over is understandable. But car insurance policies can be so randomly and expensively priced, it’s worth putting in the time to ensure you’re not getting ripped off. Think of it this way: half an hour of your time could literally save you hundreds over the year.
Let’s start off with what you shouldn’t do when it comes to managing your car insurance policies:
- Don’t cancel your policy halfway through. Unless you absolutely can’t avoid it, never cancel your policy before the term ends. If you do, you won’t earn your no claims bonus, adding immediate expense onto your next policy (although your previous no claims will still be valid for another policy).
- Don’t auto-renew. Ever! Leaving it up to your insurer to tie you in for another year will never get you the best rate. They’re banking on the fact you’re too busy (or lazy!) to shop around, and will have no incentive to lower your costs.
Now that’s covered, no matter how expensive your initial quote may be, there are effective ways you can work it downwards. Here’s how.
- If you can, pay annually. Some of us living paycheck to paycheck don’t have this privilege, but if you can stretch to a one-off payment, or if you have a healthy relationship with a 0% interest credit card, you’ll save money in the long run.
- Be selective about what you need. Insurance companies make more money when they upsell you on extras. A big one is breakdown cover – essential of course, but before you accept, check if you can find it cheaper elsewhere, like with the AA or the RAC.
- Pick the right job title. Your insurance quote will depend on your risk factor, which will be measured against multiple things like your age, location, and what you do for work. Insurers rarely let on what they deem as “good” or “bad” jobs, but careers like journalism and sales are known for lots of travelling and rushing around, so can be expensive.
- Consider a multi car policy. Many of us live in multi-car households now, and it’s in your insurers' interests to give you a good deal on multiple cars. They’ll often offer you a discount in return for the extra business. It’s also much more convenient to deal with one insurance company than several.
- Consider increasing your excess. This one’s a bit more of a gamble, as to whether it pays off depends on whether you have an accident or not. It makes sense to agree to a high excess if you very rarely use your car. If you live in a busy urban area, however, or somewhere with a high risk of car theft or damage, you may expose yourself to big costs if something happens.
Is a black box worth it for lowering insurance costs?
We’ve given this one it’s own section, because it’s a topic of hot debate. Black boxes were brought in around a decade ago to monitor your driving and feed data back to your insurance company. This allows them to keep tabs on how much of a risk you are, and lower your costs accordingly. A great idea in practice, but they’re not infallible. Aside from the obvious penalties for driving too fast or braking too suddenly, a black box may also give you a “bad” score if you frequently drive long distances, or even if you drive at night. But they can be good if you use your car very infrequently or for short distances. Axa insurance partners with Coverbox, a newer model of black box that shows you your data, and a theft tracking function if your car is stolen.
When it comes to car insurance, the difference between quotes can be truly staggering, and can have a notable impact on your outgoings. Start by getting a comprehensive comparison at Money Supermarket, and consider browsing cashback sites to see if you can bring your costs down. Happy shopping.