How to save on car insurance (and bike insurance)

Car insurance is one of the biggest headaches for many motorists, but through the years I’ve learned a few useful money saving tips I’d like to share.

My first car cost as much to insure as it did to buy: about £350. This was back in 1995 as a 17 year old lad for a 1980 1 litre Austin Metro. It’s worse though for the youth of today; we’re talking one to two grand in insurance for a similar modern equivalent depending on various factors.

One solution for younger drives is to not insure themselves, but be named on their parents policy. To do this though, it really needs to be your parents car and not your own, the theory being you’re not the main driver, and hence the insurance cost is reduced as the risk is then reduced – the younger driver considered to be only using the car on an occasional basis.

Another problem with this though is that you don’t build up any no claims bonus (although the fact that you’ve driven on someone elses policy/another car is usually taken into account when you come to insure yourself in later years).

On the flip side, it may be worth adding a parent to the young drivers insurance policy: the risk is lowered (and hence the cost) because it is considered that the more experienced driver is driving the car a portion of the time, and the younger driver less so.

This isn’t also a good approach for younger drivers, but those that have expensive insurance for other reasons such as: having only lived in the UK for a short time, older but new/less experienced drivers, those with points/criminal records etc.

For example, my girlfriend was able to reduce her insurance cost by about 30% by adding me as a second driver. It would have been even cheaper if the car had been fully insured in my name and she was added as the second driver, but as she is indeed the main driver, this could be taken as fraud! Besides, I already had two other vehicles so splitting no claims cost issues arose, and she also wanted to build up her own NCB (No Claims Bonus) so that future insurance for her would be cheaper.

Younger drivers should also look around for insurance companies specifically tailored to new drivers; there are a few companies that offer reduced price policies. The larger ‘household name’ insurance companies have to cover a larger range of drivers and therefore price younger ‘higher risk’ drivers higher.

Similarly, if you are an older driver, look around for insurance companies specifically tailored to more experience drivers, such as Saga Car Insurance.

Many factors other than age and driving years experience influence insurance costs. Your geographical location, or where the car is kept overnight or during your working day is taken into account too. If you live in a ‘dodgy’ area then parking your car on the road can increase the insurance costs; if you have a driveway, or even better, a garage, this can help significantly. Similarly consider you work parking situation: if you are parked in a secure office car park it’s going to be better than city centre or even residential street parking.

Then there’s the number of miles you do per year. Typical commuters may do 10,000 to 20,000 miles per year. Usually if you specify your estimated mileage around these figures then no-one queries this; but if you know you will do less than 10,000 miles, look around for insurers that take this into consideration; you can save yourself quite a lot with some policies. For example, Adrian Flux and some other ‘specialist’ insurance brokers consider that a ‘cherished’ car may be something you are driving much less often and taking more care of. I’ve saved money for many years by insuring a second car under Adrian Flux’s ‘cherished’ policy with a limited mileage policy. It’s still insured for use to commute to work; but the theory is that I will be using the other vehicle as the daily commute the majority of the time, and the second car is more for weekends/casual use.

Beware though: they do check that you aren’t exceeding the mileage limitation. I had one car with a limit of 5000 miles when my work situation meant I did around 12,000 miles per year; the second car was set at 10,000 miles per year so I just kept an eye on the odometer and ensured I didn’t exceed the limit.

Points on your license will of course increase your insurance costs; all I can say is try to avoid getting these in the first place!

NCB built up over the years also considerably reduces your insurance price. They say that even one years NCB can reduce your premium by up to 30%, and four or five years can reduce the cost of insurance by even 60%. You can also pay a premium to protect your NCB. This may or may not be worth it, depending on the amount of the premium and the likelihood you may need to make a claim. Are you naturally clumsy/lack coordination/have already had a few scrapes? If you’ve been driving a few years without an accident then you may decide to take the ‘risk’ of not protecting your NCB, it may actually pay off over the years.

Deciding what to cover and not to cover is always a gamble with insurance, of any kind. It may or not pay off. The same goes for excesses. Insurers usually insist on a compulsory excess charge in the case of a claim, but offer you an voluntary excess figure in addition. Keeping this low means your annual insurance will be higher; if you are likely to make a claim then it may be worth doing so; especially if you make multiple claims in a year. Setting a higher excess means your annual insurance will be reduced; but if you do have to make a claim then you’ll be forking out more later.

Again, it’s a gamble.

Always try and pay your insurance annually rather than monthly; the percentage charge added by paying monthly can be significant. Put aside a little each month ready for next years insurance.

Many insurance companies now offer multi-car policies. The idea usually is that most households have more than one vehicle, so the insurance brokers offer you a discount for insuring both with them. This normally works by splitting the NCB across the cars.

For me this has allowed me to own multiple cars; I’ve regularly had two cars; a two seater for weekend fun, and the other for the daily commute/family practicality – I’ve had three cars at once several times and even four at one stage, although that was more to do with mechanical problems and struggling to sell one or two cars!

Always use the online comparison sites, such as comparethemarket, moneysupermarket and gocompare – even if it’s just to get an idea. Never just renew with who you are currently insured without looking about first; often loyalty is NOT rewarded and the premium is sneakily put up without a reason!

Note that the comparison sites often make ‘assumptions’ about the car and may not be suitable for modified or imported vehicles.

Check the comparison sites and ring your current insurer and let them know what you’ve found. You should at least be able to get 10% off, but they might still be more costly than what you’ve found online. Once I found the company I was currently insured with quoting online significantly less than the renewal price I’d been mailed. I rang them up and they said that they couldn’t match it over the phone; I was best cancelling and renewing it with them through the comparison site! As it was I found another company even cheaper…

Another point to note is; don’t always buy it via the comparison site. As I said, it’s a good starting point… it may however been worth contacting the top / best priced insurers individually. If you do this online, they’ll likely come out at the same price… which is fine, as you can then use TopCashBack.

I’ve been using TopCashBack for years and it has literally saved me over a thousand pounds. The idea is that you sign up with them, search for the company you wish to purchase a product though (they have many but of course not everyone), click via the link to go to that companies site, and if you make a purchase, you receive cash back.

This can be as little at 0.5% and up to 50%. I’ve used them to save on hotel bookings (normally around 5-12%), new phone contracts (had about £80 cashback once) and utilities (think I got over a £100 for switching energy suppliers on one occasion); but they are also excellent for car (and other) insurance policies. I recently had a Ducati 749s bike insured with one company for about £600. I downgraded to a Ninja 250 with only a month of my policy left, so there was no charge/refund. I then got a letter from them quoting a renewal price of £180. Great, I thought, that’s much cheaper. But before renewing I went online and used the comparison sites… and found several policies for around £85.

I then visited TopCashBack and searched for those cheaper insurance brokers, and found one of them was offering £20 cashback.

So I was able to reduce my insurance renewal from £180 to only £65!

You can join TopCashBack by clicking here.

Another cashback company worth checking out is Quidco.

If you try and insure an imported or modified car you may also find that the ‘usual’ insurance companies will charge a premium. It’s worth looking around for companies that specialise in cars of this type. I’ve already mentioned Adrian Flux for their ‘cherished’ car insurance – they split the NCB across multiple cars too; companies such as Brentacre, A-Plan and Carole Nash are good for imports and modified car insurance.

Some companies charge an addition premium for each modification a car has. This can be extremely costly for a heavily modified vehicle. Brentacre insurance simply classes the car as ‘modified’ and then calculates the premium based on the power (BHP) of the vehicle instead. This enabled me to insure an imported and modified car for only £600 when everyone else had quoted well over a grand.

Car forums are a great source of information for car insurance. If you are planning on getting a particular car for which you have had high insurance quotes from your current insurer/the household insurers, register on a forum specific to that vehicle and have a look at what people are recommending, and make a post if necessary, specifying your particular criteria/issues – you never know, someone else may be in exactly the same boat and be able to help you save money.

Another point to note is whether it’s actually worth claiming in the event of an accident. Not only do you risk any no claims bonus you may have accrued, excess charges can make it not worth the cost. It may just be cheaper to get it fixed yourself, or if it’s minor, just leave the damage alone. Even if you have protected NCB, the fact that you have made a claim is on record and you need to state the fact when looking for new insurance in years to come – and that fact is factored in; you are now higher risk!

A frustrating point too is that if someone crashes into you, and it’s clearly their fault – and any damage/injury is settled through the insurance, that too is on record. No matter that it wasn’t your fault – someone, you are now classed as a higher risk, and your insurance costs will go up. Statistically, someone that has been involved in an accident, regardless of fault, is more likely to have another accident in the future, than someone that hasn’t.

So if damage is light and there are no injuries, it may even be worth settling personally.

I’m not a car insurer or solicitor though so always take legal advice if unsure!

A final tip: keep your distance. That rule has saved me so many times. Not only from my own occasional lapse of concentration and having spared myself some room to brake or manoeuvre in, but from others behind me that haven’t seen me brake/slow down; I’ve been able to move forwards more or out of the way to avoid them driving into the back of me.

Happy motoring all 🙂



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