Did you get a shock when you renewed your car insurance this year or last? Then you’re not the only one!
Rocketing Insurance Costs
Car insurance has increased by 43% over the last 12 months, with the average cost of a comprehensive car insurance policy now coming in at £941 (a £284 increase from last year).
However, it’s not all bad news, as the average price has fallen by 5% compared to the last quarter of 2023, acting as the first price fall seen in two and a half years.
Why is Car Insurance on the Rise?
Car insurance costs have gone up for two main reasons
- More cars on the road, meaning more accidents and so more claims for insurers to pay out for
- Inflationary pressure on costs of parts and labour, meaning a higher payout for insurers to pay to repair or replace vehicles
How Can I Reduce My Car Insurance?
- Reduce your annual mileage. Your insurance provider will ask how many miles you drive on average, and whilst you need to be honest with this, there’s no need to massively overestimate. For example, if you’re putting your annual mileage at 10,000 miles but only drove 5,000 miles last year, it’s time to put down a lower number!
- Choose a cheaper car to insure. The car you drive can have a big impact on your insurance, so when shopping for a new car, you should check what insurance group it’s in before purchasing
- Shop around! Yes, we know, we say this for absolutely everything. But really, it is important to compare multiple quotes from a range of providers. Auto-renewal often leads to a higher quote than is offered to new customers, so making a switch can save you money!
- Change how you describe your job. Whilst you cannot lie about your occupation, there are often a number of ways in which you can legitimately describe your job, as it may fit into a few different categories, and some job titles will reduce your premium! However, make sure that the option you pick still accurately describes your occupation, as you must not lie to your insurer
- Add a named driver who has more experience on the road (and more years of no claims). This is a particularly good option for new drivers who don’t have years of driving history to support the fact that they’re a safe driver
- Pay upfront rather than paying a monthly premium. By saving up and paying your insurance for the year all in one go, you avoid the addition of interest
- Park your car off road, such as in a driveway. Bear in mind that parking in a garage may actually lead to a more expensive premium
- Increase your voluntary excess. This is the money you agree to pay towards a claim if you get in an accident. Remember that you will have to pay your voluntary excess alongside the compulsory excess which is set by your insurance provider
- Remove unnecessary optional extras, e.g, do you really need a courtesy car?
- Consider installing a black box. This monitors your driving, and if you can demonstrate that you’re a safe driver, you may be offered cheaper premiums
- Build up your no claims bonus. The more years you drive without making a claim on your insurance, the higher your no claims bonus will be, meaning a reduction to your premium
- Avoid getting penalty points on your license. For example, if you’re caught speeding and are offered the opportunity to do a speed awareness course to avoid points on your license, this is worth doing; points on your license can lead to higher premiums