The Ultimate Guide To Buying The Cheapest Car Insurance
The very cheapest car insurance can be found; but you have to think like an insurer.
Reduce your risk profile
No doubt you will drive carefully but accidents are not the only causes of claims. Fraud (such as 'cash for crash'), theft and vandalism are all on the rise and represent a considerable portion of every premium. You can reduce the risk of these by:
- Fitting a dashcam. They are now very cheap and they can make all the difference in a blame dispute.
- Using a steering lock. Keyless security systems are being hacked routinely so you can't trust them.
- Parking your car overnight off the road.
- Taking photos of your car - useful if it gets stolen.
- Never - never, never - leaving your keys in the ignition, even for a few seconds.
- Locking any goods in the boot, rather than leaving them on display inside the car. Back to top ...
Ignore marketing hype
Hundreds of millions of pounds a year are spent on motor insurance advertising. Part of every premium you give to these heavy advertisers pays for this, rather than anything that benefits you. However, have you wondered why some companies spend a fortune to tell you they are not on price comparison sites? Perhaps it's because their prices just don't compare well. Price comparison sites aren't free; those that run them get large commissions on every policy they sell but none of them will recommend companies that may give you a better deal, but who won't pay them for the privelige. Most large comparison sites are owned by insurers anyway, so they are hardly likely to push the products of their competitors. They are a useful tool but you can often get better deals by going direct to the insurers. Back to top ...
Compare the comparers
You will often find exactly the same policy from exactly the same insurer on different price comparison sites but with different premiums! That is because each site negotiates it's own deals, and they often have a lot of leeway about how much to add on top for their own profit. So, don't just compare prices; compare those prices on several different comparison sites too. Back to top ...
Be wary of 'specialist' insurers
There are specialist websites out there which claim to cater for every group from young female motorists to over-80s sports car owners. However, although they may well favour these somewhat, there are many other factors that are taken into consideration when working out a premium. A company may well reduce a premium somewhat for, for example, a motorist over fifty but that same insurer could charge more than others for the type of car being driven, the postcode it is kept in or even the driver's marital status. So, most of the time you are better off comparing as many prices as possible rather than going to a specialist. Back to top ...
Remember that car insurance is a competitive business
Provided that you don't have a poor claims or convictions record insurance companies want your business. They not only wish to sell you a policy now but they also want repeat business, and provide your home, life, pet insurance etc into the bargain. This means that they will, very often, offer you a very attractive premium if you switch your business to them. The following year, of course, the premium will probably increase considerably which means it is time to start looking around for cheap quotes again.
Prices are often negotiable so it is a good idea to ring your current insurer, or one that you are thinking of switching to, explain that you are looking round for a lower price, and ask what discount they can offer you. I have personally been offered £150 off a renewal quote without argument when I have done this (I didn't accept it since I had a better offer elsewhere!). Back to top ...
Optional add-ons are rarely good value
Car insurance premiums are tightly squeezed and most insurers make little or no profit on them. Add-ons, however, such as a guaranteed courtesy car in the event of an accident, or free legal representation if you are involved in a legal dispute, can be highly profitable whilst offering you poor value for money. After buying a policy online you will often be telephoned by a 'customer service representative' who will attempt to sell you one or more of these. If you say "no thank you" you will probably be offered a large discount. If you really want to take up the offer then go ahead by all means but bear in mind that the add-on will re-appear on your next premium, but this time at full price. Most people don't notice and pay up automatically; but you won't, will you. Back to top ...
If it looks too cheap, it probably is
Many people buy the cheapest possible policies. Too often they find that the insurer is hard to contact if they need them, is slow at processing claims, haggles over their liability to pay or is even in a different country, such as Gibraltar, and beyond the reach of the Insurance Ombudsman Service.
Some of these companies will make you use a premium priced telephone line to contact them with, and keep you waiting online for ages whilst your bill mounts up. Alternatively, if you change your address, your job, your car, your parking arrangements or any one of the many factors which affect your premium they will charge you a rip-off price for recording it; I have seen fees as high as £120 (plus whatever extra the premium increased by!) for a simple mileage change. Fail to tell them and they may well have grounds for cancelling your policy.
There is a lot to be said for buying from a well known company but at the very least look up online reviews of the company you are thinking of entrusting with your money before handing it over. Back to top ...
Some insurers are less ethical than others
You buy a cheap policy then relax. A few days later you get a letter or email demanding that you immediately send proof of your no claims discount within 14 days. You forget about it, or are on holiday so don't see it, and a couple of weeks later you are pulled over by the police and charged with driving without insurance. Your insurer has cancelled your policy and returned the premium; but less a huge 'administration fee'. You complain, but it's there in black and white in the terms and conditions that they can do this. You did read the policy documents before buying the policy didn't you? Most people don't.
If you think that this is far-fetched do an online search. You'll find that there is a lot of it about.. Back to top
Third party policies can be a poor bargain
Third party only or third party fire and theft used to be a much cheaper alternative to fully comprehensive cover. However, insurers have changed their tune. They now see motorists who are looking for these policies as being more likely to drive an 'old banger' and less likely to maintain it properly; and so have a higher likelihood of making a claim. As a result, premiums usually offer poor value, and can even be higher than comprehensive ones! So, always get a comprehensive quote first, and then a 3td party one; you may be surprised by the difference. Back to top ...
Insurers know more than we think they do
Insurance companies don't just take your word for it when you fill in a proposal form. There are numerous databases which they can get information from including CUE (the Claims and Underwriting Exchange) which has been gathering data about traffic accidents for more than 20 years. Many of them check an applicant's credit history and some even look up their Facebook profiles (particularly if they suspect fraud). They can even check your driving licence details. In short they can find out more about you than you know yourself so it is vital to be scrupulously accurate when filling your form in. If there are any errors the insurer may load the premium or even refuse cover completely. Back to top ...
Old cars attract the highest premiums
Many drivers, particularly young ones, feel that they can only afford a cheap, older vehicle. Unfortunately these are usually penalised by insurers because they may have faults which could make them less roadworthy, and they lack modern safety features which reduce the risks of a claim. You can usually get a lower premium by driving a new or newer car and often you can get a smaller engine, and get into a lower insurance group, without sacrificing power, since many newer engines are much more efficient than those of even a few years ago. There are many attractive leasing deals available. Add in the MPG savings and lower maintenance costs and a newer car could prove to be a cheaper, as well as more comfortable and reliable, option. Plus it will save you wasting so much money on expensive car insurance. Back to top ...
Start your search early
Insurers feel that motorists who leave the renewal of a car premium until the very last minute are less organised (and therefore more likely to make a claim) than those who do so with plenty of time to spare. On the other hand they feel that those who start a search early have plenty of time to shop around and so, if they want to get the business, they have to offer an attractive rate. Most insurers will be happy to fix a premium up to a month before the renewal date and some even longer than that, so if you see an attractive offer it may be best to go for it, rather than wait a while longer and risk the price going up. Back to top ...
Don't accept automatic renewal
Finally, we've saved the most important item until last.
Being loyal to an insurer rarely pays. You will probably find your
premium rising every year, often substantially. A competitor is likely
to welcome you with open arms as a new customer and reward you with a
very attractive premium, and you can always go back to your old insurer
in a couple of years if you were happy with them; after all, you will be
a new customer, all over again, qualifying for their very cheapest car
insurance. Back to top ...