Money and renewals

Tips to lower the rate of your car insurance

Practical, general ways to bring down the cost of car insurance, from paying annually and choosing your excess to security, mileage and your no claims bonus.

If you have a car, you will already know how much it can cost to keep it on the road. Add insurance to fuel, servicing, the MOT and tax and it becomes a sizeable part of your monthly budget. If you are ever in an accident, though, you will be glad the cover is there.

The aim is a policy that covers what you actually need. Once you understand what affects the price, there are a number of sensible steps that may help bring it down without leaving you short of cover. Here are some general tips.

Pay annually

This won't suit everyone, but if you can afford it, paying for a full year upfront usually works out cheaper than monthly instalments. Many insurers add an interest or credit charge to monthly payments, which is built into the amount you pay each month. It is worth checking the total cost of both options before you decide.

Increase your excess

Your excess is the amount you pay towards a claim. It is made up of the compulsory excess, set by the insurer, and any voluntary excess you choose to add. Choosing a higher voluntary excess often lowers the premium.

Remember that you must be able to afford the excess if you need to claim. For example, a £250 voluntary excess on top of a £250 compulsory excess means you would pay £500 towards a claim. Make sure that figure works for you before you agree the policy.

Improve your car's security

Vehicle crime is a risk for you and for your insurer, and security is one of the things considered when cars are placed into insurance groups. Approved alarms, immobilisers and trackers may help reduce the price, so it is worth asking your insurer which devices they recognise before fitting one.

Where you keep the car matters too. Parking somewhere safe during the day and overnight shows that you take care of the vehicle. If the car is stolen or damaged, any claim is likely to push your premium up at renewal.

Think about the next car you buy

The car itself has a big effect on the premium. Cars with smaller engines tend to sit in lower insurance groups than larger, more powerful models, and road tax is often lower too. Before you buy, it is worth checking what a car is likely to cost to insure, as an economical choice can save money over the years you own it.

Named drivers

Adding an experienced named driver who will genuinely use your car can sometimes reduce the price, particularly for younger drivers. The better their driving history, the more difference it may make.

The policyholder must be the main driver, though. Naming someone else as the main driver when they are not is called fronting. It is fraud, it can lead to a conviction and it is likely to make the insurance invalid.

Consider how you describe your job and use

The way you describe your job, honestly, can affect the price, as can how you use the car. If you don't use it to commute, social use only cover may be cheaper. Always give an accurate description of your job and your use of the car, or you risk invalidating your policy.

Telematics might be worth considering

A telematics device, often called a black box, records how you drive: your speed, how hard you brake and the times you are on the road. Insurers that offer these policies use the data to reward careful drivers, and a good record may help at renewal. They are most common for younger drivers, but some more experienced drivers use them too.

Be realistic about your mileage

The more you drive, the more likely you are to have an accident, so a lower annual mileage may mean a lower premium. Give an accurate estimate when you apply. If you drive much more than you stated, your cover could be affected.

Protect your no claims bonus

Building up years without a claim is one of the most effective ways to reduce your premium over time, because insurers reward claim-free drivers with a discount. Even one claim-free year can make a difference at renewal.

Shop around at renewal

If you are unhappy with your renewal price, don't simply let it roll over. Check what else is available and, if you find a better offer, it is worth mentioning to your current insurer, who may be able to review the price.

Keep in mind that the lowest price is not always the best value. Compare the level of cover, the excess and any extras. Paying less for less cover can cost you more if you need to claim.

Kompare doesn't currently offer quotes for car insurance. If you drive for work, see our pages on van insurance, young driver insurance and how we work.