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You are probably paying too much for your car insurance!

Finding very cheap car insurance by going to the cheapest car insurance company simply is not possible because every single policy is different. The lowest priced company for you may be the most expensive for your next door neighbour, because he or she is older or younger; has had more or fewer accidents; drives a safer or less safe car, than you. You get the picture.

There are only three ways in which you will get the very lowest priced car insurance. Search through the maximum number of policies, trim your policy to the bone, and adjust your circumstances to make yourself a lower risk.

Searching the maximum number of policies

This is fairly easy, but you have to be prepared to spend some time. The simplest way is to use a price comparison engine. Bear in mind that there is more to an insurance policy that just the basic price, many insurers charge extra for benefits that others include as standard, so make sure you check just what you're getting for your money.

Buy short term car insurance - where appropriate

If you only need cover for the odd short period, say a few days or weeks, you might be better off buying a short term policy from time to time. These are available from 1 to 28 days and you can get more info about them here.

Trimming your policy to the bone.

The cheapest form of car insurance is third-party only. This will pay for any damage you do to other people or their property, but will give you nothing back whatsoever if you damage your own vehicle or suffer injuries of your own. You can also say 'no' to optional extras such as a loan car in the event of an accident, legal representation, roadside assistance. However third party is NOT always cheaper than fully comprehensive! Some insurers are wary of customers who may not have the money to maintain their cars properly so they increase the quotes for anyone looking for 3rd party cover to discourage them from buying a policy. So: always get a fully comprehensive quote too.

You may also want to consider limiting your mileage, and offering to pay an additional voluntary excess – this is the amount that you have to pay yourself out of every claim. Sometimes having a high excess can reduce your premium considerably, but make sure it is something that you can afford to pay out, because one day you may have to.

Ignore 'protected no claims bonuses', they are not worth the paper they are written on. If you make a claim, then yes you will keep your NCD but the basic premium will shoot up so you'll still be paying a lot more anyway.

Making yourself a lower risk to the insurance companies

If it is at all possible, park the car overnight on a drive or, preferably, in a garage rather than on the road. If you have to knock down your front garden wall and pave your garden it still may be worth considering.

Pick a car in the lowest group you can bear to drive in. If possible drive a newish car; they tend to have more safety features than older ones and insurance companies like this.

If you are a young driver, see whether or not adding an experienced adult to your policy will make a substantial difference; some insurance companies like to see that an older person has an interest in a car. This is not the same as fronting, in which a young person is put down as a secondary driver when in fact he or she is the main one; this is illegal and easily discovered. The way we are suggesting is for the young person to be listed, quite correctly, as the main driver and the older person as an additional driver.

WATCH YOUR DRIVING! Accidents or convictions will play havoc with your premiums.

 

Try not to make claims unless they are absolutely necessary

In the UK the average claim is under £900. If you have a minor bump you may have to pay out an excess of £500 out of your own pocket, meaning that the insurance company only pays £400. Next year, because you have had a claim your premium will rise substantially, probably by a lot more than that £400 and you will pay more in subsequent years too. So, try and keep your record clean if you can afford to do so.

Points to bear in mind

A number of insurers that sell car insurance in Britain are based in Gibraltar. Some of them offer very low priced car insurance. However, most of them do not subscribe to the car insurance ombudsman scheme in the UK so in the event of a dispute you may have no one to turn to and could find yourself involved in a very expensive legal case. It is obligatory for UK based insurers to accept this ombudsman's arbitration however. So, if possible, go for a UK based insurer.

Please ensure that all the answers that you put on an insurance proposal form are 100% correct. Some cheap car insurance companies are very good at using incorrect information as an excuse for not paying out on a claim.

As well as looking at the cost of the premium, take a look at what the insurer charges for such things as alterations or cancellations. Many insurance policies are altered at some stage because the policyholder changes address (it is very important that you inform them of anything like this) or buys a new car. Some companies, including many of those who offer the lowest premiums, charge very substantial fees, sometimes well into three figures, for making an alteration, as well as charging a very substantial compulsory excess so don't just look at the basic price of the policy, make sure you read the policy documents very carefully before committing yourself.

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