Dreading renewing your car insurance policy? Wasim Bux, Product Manager with car insurance provider iGO4, shares insider tips to lower the cost of your premium.
For most busy families, a car is an essential part of everyday life. But with high fuel prices, servicing costs, and expensive car repayment plans to contend with, a car can also be a major drain on your income. And that’s before you factor in the cost of your car insurance premium — an expense which is currently at a record high, according to research from Which.
But, there are plenty of ways you can reduce the cost of your insurance premium, meaning you can get from A to B for less. Just read on to learn my top five tips for motorists who are looking to drive down the cost of their premiums.
1. Shop around to get your insurer to lower their quote
Although it might seem obvious, shopping around and asking insurers to beat quotes really is an effective way to cut the cost of your premium. Providers will often offer to match quotes in order to attract new customers, so taking the time to do this can be a seriously effective way to save.
So, when the time comes to renew your insurance, don’t just assume your insurer will reward your loyalty with a great offer. Shop around for different quotes, and if another provider offers you a better deal, then go back to your insurer and let them know. They’re much likelier to offer you a cheaper premium if they think there’s a chance you’ll go elsewhere. But, if they don’t, then take the plunge and switch to a cheaper provider.
2. Negotiate a higher excess
Most insurers will charge an excess whenever you make a claim on your insurance. If you’re willing to increase how much this will be, then you can sometimes get a reduced premium. So, assuming you don’t need to claim for the duration of your insurance term, this could save you quite a bit of money.
However, you can never completely guarantee that you won’t need be involved in an accident, so it’s up to you to weigh up the risks. The excess fee can also be drastically higher for younger or less experienced drivers, so you’ll need check what a potential excess fee is likely to be before agreeing to it — after all, if you can’t afford it, your insurer may not pay out.
3. Pay your premium in a lump sum
Although it can be tempting to spread the cost of your insurance payment across several months using a payment plan, it’s often the case that insurers will charge less if you pay in one lump sum. In fact, paying your car insurance in monthly instalments costs on average £144 more than a single annual payment, according to LoveMoney.
Although an annual payment may seem expensive when the time comes to pay up, it can save you money in the long term. If you think you’ll struggle to find the money when the payment is due, then make a savings plan to help cushion the cost: saving just £30 a month will give you £360 to put towards your premium. Plus, once it’s been paid, you won’t have to worry about it for another year.
4. Agree to a lower annual mileage
If you don’t need to use your car every day, or you don’t often travel long distances, then you could skim money off your total premium by agreeing to a lower mileage limit. It’s common for discounts to be provided where the usage of the car is less, as this reduces your time on the road. If you’re not a frequent driver, or you don’t need to drive long distances very often, then this could be an easy way to lower your premium.
Exactly what constitutes a ‘low mileage’ will vary from provider to provider, but if you’re racking up less than 7500 miles a year, it’s very probable that you could save money. Of course, it does come with a risk: if you exceed your mileage, you will need to let your insurer know, which may incur an additional cost to cover the extra miles. So, you’ll need to make sure you’ve got an accurate estimate for how often you’ll use your car over the course of a year.
5. Consider telematics
Many insurers now offer drivers the option to sign for a telematics insurance policy, which rewards careful motorists for good driving by offering them savings on their premiums. It’s especially cost-effective for younger drivers, who pay the most for their policies, meaning they stand to make the biggest savings.
To get this sort of insurance policy, you’ll need to agree to have a black box fitted in your car, which will record information about your speed, acceleration, braking, and usage times. Of course, the caveat to this is that you’ll need to be careful when driving: but if you’re already a sensible motorist, then this sort of insurance could be the right policy for you.
Coughing up to renew your insurance policy can be a major drain on your finances, but there are still ways to reduce your premium and get a great deal on your insurance. With these tips, you should be on track for a lower premium, meaning you’ll have more money to spend on the things that matter.