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How to avoid overpaying for your car insurance

Following a clampdown on whiplash claims, car insurance premiums fell by £100 between December and February. The Civil Liability Act was passed in December to curb the high number of whiplash claims, which currently cost the motor insurance industry around £2 billion each year, despite many of the claims thought to be exaggerated or fraudulent. Medical evidence will now need to be supplied to back up whiplash claims.

However, the reduction in premiums isn’t just due to the clampdown on whiplash claims. A decline in new car registrations has increased competition among insurance firms, as they fight to win new customers in a smaller market. Since December, the average car insurance premium has dropped from £790 to £690 per year.

Analysis by comparison site Comparethemarket showed that there is a gap of £116 between the cheapest and average car insurance premiums, demonstrating the importance of motorists shopping around for a better insurance deal. Comparison sites can allow you to make big savings, but there are a few golden rules that you should stick to.

No single comparison site has options from every insurance provider, so check across multiple sites to find a wider range of quotes. Some major insurers, such as Direct Line, don’t actually appear on insurance sites, so approach these insurers directly for a quote.

Remember that cheaper insurance doesn’t necessarily mean it’s the best product for you – it may not be as good value as it first appears. For example, the excess may be high, or the cover may not be sufficient for what you need, so reading the small print is crucial.

Once you have found a policy that works for you, there are a few tricks to help keep the costs down…

  • Adding another, experienced driver with a clean driving license and no-claims history to your insurance cover can potentially cut costs – just make sure that you don’t claim that they are the main driver of the car, as this is illegal.
  • Switch to a new policy before your renewal date, as research has shown that if you purchase a new policy 21 days in advance, it can save you an average of £280.
  • If you can afford it, paying for the insurance upfront can reduce the overall cost, as many insurers charge interest on the monthly repayments.
  • Double-check what is included in the policy, as some elements of it may already be covered by your home insurance, breakdown cover provider or travel insurance – there’s no point in overpaying for your policy!

Remember that if you are unsure about any aspect of your policy, it’s important to get in touch with your insurance provider to avoid paying over the odds for your insurance. To make sure that you’re getting the best deal on your car finance, get in touch with our team.

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