The cost of car insurance has shot up in recent years. However, it’s a legal requirement if you have a car in the UK today. So how do you keep the cost down?
Here are five things that you need to know if you want to ensure that you have sufficient cover – for the best possible price.
1. You must be continuously insured for your car
Unlike most financial products, car insurance is not optional. In fact, due to Continuous Insurance Enforcement (CIE), which came into force in June 2011, you must insure your car at all times – not just when you are driving it.
Otherwise, you could face a fine of up to £1,000.
The only way to avoid having to insure a vehicle that you do not drive is to register it as being off the road with a DVLA Statutory Off Road Notification.
2. You must notify your insurer if your circumstances change
You need to let your car insurer know if your circumstances change – for example because you move house or get a new job – during the policy term.
You may find that your premiums rise, or fall, as a result. But it is worth it even if you do end up paying a bit more as any claims you make could otherwise be declined.
3. Loyalty doesn’t pay
Stay with the same insurer year after year, and the likelihood is that your premiums will go up each time you come to renew your policy.
It is therefore worth taking the time to shop around to see if you can get a better car insurance deal, especially with potential savings of more than £300 a year on the table.
Most companies allow you to take any no claims discount you have built up with you if you switch to them.
What’s more, even if you would prefer to stay with your existing insurer, it is still worth shopping around for a lower quote and then asking it to match it.
4. ‘Fully Comprehensive’ cover is not always more expensive
Third Party car insurance, which is the most basic type, only covers damage caused by you to another vehicle or property, while Third Party, Fire and Theft cover also includes your car being stolen or damaged by fire.
Fully Comprehensive cover, on the other hand, offers protection for accidental damage to you or your own car on top.
Logically, Fully Comprehensive policies should therefore cost more than Third Party cover.
However, this is not always the case as Third Party cover is popular with young drivers who are statistically more likely to make a claim than more experienced motorists.
Consequently, you may be able to get better protection for you and your vehicle for the same cost or less by going “fully comp”.
5. It is cheaper to pay upfront
Most insurers allow you to pay your premiums annually or monthly.
But while monthly payments may seem an attractive option if money is tight, you will generally pay more for the privilege due to interest charges that can be as high as 25% or 30%.
Insurance isn’t the only car cost that you can save money on. Take a look at this video for some practical tips on how to cut the cost of running your car.