How To Keep Car Insurance Costs Down

When it comes to buying car insurance there are certain factors which will influence the overall cost of the policy. Nearly all insurance companies use the same factors in one way or another to calculate insurance premiums. Some factors they use you cannot change like your age, address and claims history for example. But there are a few which are quite variable, and if you keep tabs on these ones they should bless you with a cheaper insurance policy.

Here we intend to highlight these variables and give you a clearer picture on how to influence your insurance costs for the better.

Factors You Have Control over are:

Choice of Car

All mass produced cars sold in the UK are assigned an Insurance Group Rating. This is a number between 1 and 20 and is given to a model based on its repair costs, accident statistics and security. These ratings are one of the most important factors insurers use when calculating premiums. In a nutshell it means the higher the insurance group (20) the higher the insurance is likely to be, so choosing a car in a lower group will be your best bet for cheaper insurance.

This is far more apparent the younger you are, where you might find the only affordable options are the insurance groups 1 to 3. However, once you have a few years experience the higher rated cars will not be such a drain on finances when you come to insure them. Hopefully you will have built up a no claims discount by then too, so this will also help reduce the insurance quite significantly.

You can find out more on how they calculate insurance group ratings by clicking here.

Modifications Affect Insurance Premiums

Try and keep modifications to an absolute minimum as anything above standard factory alterations could affect your insurance. In fact, some insurance companies may even count optional factory extras as modifications, even though they were fitted by the manufacturer. The majority, though, will generally only class your handiwork as modifications. Remember to declare all extras and modifications to the insurers so that in the event of a claim there are no arguments, and you will have performed your legal duty in disclosing all the material facts.

The types of modifications that will affect insurance premiums are:

1. Styling (body kits, spoilers, exhausts etc)
2. Alloy wheels
3. Sports suspension
4. Performance improvements/ engine tweaking etc
5. Car audio/sat nav

The only exception to the above are security modifications, because by adding an alarm, security system or immobiliser you will actually lower your insurance. Extra security measures like these are good deterrents to thieves, and therefore lower the risk of the car ever being stolen. This is good news from the insurers point of view, so they usually reward a responsible attitude like this by offering cheaper insurance.

Location and Insurance

Your location will play a big part in the cost of insurance. Living in the city will generally cost more, while smaller towns and suburbia will enjoy cheaper insurance due to the reduced risk of crime. Short of moving to the country there are a few things the city dweller can do in order to reduce the risks. If possible park the car in a driveway overnight, or better still in a garage as this will greatly increase your car's security.

It's unfortunate that postcodes are one of the main factors used in calculating premiums, because no matter how cautious you are on the roads you will always be deemed a higher risk purely for living in the city. In light of this, never be tempted to use another address when applying for insurance quotes, because some people think by using an alternative address it will get them cheaper insurance. What they do fail to realise, though, is that this could invalidate their entire policy.

This is particularly common for students who often use their university address when applying for a quote. However, you should only ever apply for car insurance using your address of permanent residence, which in most cases is the one on the electoral register.

Pass Plus

Probably the best way for the young driver to minimise insurance costs is by taking the pass plus. This course is designed to fill in the gaps that previous driving lessons have not covered.

There are six modules in all, and each one addresses certain aspects of driving that are paramount to road safety. The modules cover night time driving, motorway driving and negotiating city roads. It's not a test as such but more an ongoing assessment of driving skills in these given scenarios. Once the instructors are happy you are up to scratch you will be awarded a certificate.

Many insurance companies recognise this certificate and the level of competency needed to achieve the pass plus. Some will heavily discount your insurance or even award you the equivalent of 1 years no claims discount, in which case that can be as much as 30% off your premium. Check with your local council as they often run schemes to assist people with course fees.

You can find out more about the pass plus by clicking here

Free Car Insurance For New Models

There's no better way in reducing insurance costs than by having it for free, and if you are in the right place at the right time this is actually quite possible. If you're visiting dealerships looking for a new car then pay particular attention to any special offers they might have on. A lot of car dealers will run one-of promotions to boost sales of a particular model, so will attach special marketing deals to one particular car. An often-used promotional gimmick is free car insurance. Buying the promotional model would then give you one, or if you're really lucky, two, years worth of free car insurance.

Even if you find no deals on when you visit it's often worth asking the salesperson about future ones. Who knows, there might even be one beginning the very next week, and this would then make it worthwhile delaying your purchase for a few days.

Build Up No Claims Discount

For those already enjoying the fruits of a full no claims discount you will already appreciate the savings it can give on your insurance. But for those just starting their journey to a no claims discount it's often overlooked just how effective it can be in giving affordable policies.

You begin your insurance history from scratch, that means 0 years and a 0% no claims. Each year you notch up without making a claim is added to your no claims discount. Eventually, after several years, you will have amounted a 60% no claims discount. Some companies will actually extend this and allow you the privilege of reaching 65 %, but either way you stand to get a much fairer deal on your car insurance.

If you make a claim on your insurance your no claims discount will step back two places. In other words, say if you have 40% (2 Years) no claims bonus then the discount will be reset to 0% and 0 years, and you basically have to start over.

For young drivers it makes sense to start building a no claims discount as soon as possible, and by searching around you often find insurance companies offering special deals for young drivers. One of the more common ones is to offer 10 months insurance for a one years no claims bonus.

To learn more about no claims bonus click here.

Raise Insurance Excess Levels

All car insurance policies come with what is known as an excess. In the event of a claim this is the portion the policyholder will pay towards the cost of that claim. You often find different levels of excess in the same policy. For example, it could be you're expected to pay more if the car is stolen than if it were just damaged slightly.

Although the levels are initially set by the insurance company it is possible to change them, and by doing so it should reduce your premium. This is called voluntary excess. So, if you want cheaper insurance try asking your insurer to raise your excess levels, but only raise them to what you can afford in the event of a claim.

Third Party Car Insurance

Third Party insurance is the cheapest of all car insurance's and is the legal minimum required by UK law. Compared to fully comprehensive it does have many shortcomings, but is only meant as a cheap and cheerful policy anyway. Subsequently, its very popular with the younger driver who cannot afford comprehensive cover, or perhaps has an older car of not great value. The main benefit with third party insurance is that it allows the young driver to have a policy in their name, and this then enables them to start building a no claims discount.

The other alternative is to be a named driver on a parent's policy, but this way you delay the benefits of a no claims discount as you're only credited it when you have a policy in your own name.

Buy Online and get Discounts On Insurance

There's no denying the affect the Internet has had on certain market sectors. It has made a number of things so much easier, and buying insurance is one of them. Gone are the days when you have to spend hours phoning companies, having forms posted, or trudging to your high street to find your local insurance broker. Now it can all be done at the click of a mouse.

This minimal interaction between salesperson and customer has enabled insurance companies to cut their costs. This means you will often find extra discounts on car insurance if you purchase it online. Of course you still have the option to make a call, but at the end of the day it will probably cost you 10 - 15% more to buy it over the phone. Online transactions are very secure. You will find all insurance companies take security seriously, therefore by buying online your transaction will be just as safe as it would over the phone.

Another perk of searching online for car insurance is that you can get several quotes in the time it would take to make just one phone call. This will then give you more to compare, more to choose from and eventually enable you to make a more informed decision.