How to get your car insurance down

4 minute read

Smiling man driving car

If you’re over the age of 70, you may have noticed that the price of your car insurance has increased. In fact, some providers refuse to insure people over 70 altogether.

Luckily there are some ways to reduce the price of your car insurance.

How to reduce your car insurance

Below, you can find some of Age Co’s top tips to reduce your car insurance premium.

Pay annually rather than monthly

Usually when you take out car insurance, you’re provided with two payment options - monthly instalments or an annual payment. An annual payment means that you pay the sum in full when the policy begins and you don’t need to pay again until your insurance renews in 12 months’ time. In contrast, when you opt for monthly payments, you’re essentially taking on a loan from the insurer and therefore you may also be paying interest on the amount. This interest is usually around 20 percent, but it can go up to as much as 35 percent.

As an example, if your car insurance was £500 per year and you’re paying an additional 20 percent because you’ve opted to pay monthly, your insurance would be costing you an extra £100 a year. Therefore it’s cheaper to pay for your car insurance yearly if you can afford to do so.

Don’t overestimate your mileage

Insurance providers generally want to know how far you drive every year. This is because the price of insurance is based on risk - the riskier you are to insure, the higher the premium. For example, a person who drives 30,000 miles a year is more likely have an accident than someone who only drives 6,000 miles a year due to probability alone. Therefore, when estimating your annual mileage, try to get it as accurate as possible and don’t overestimate it by too much.

Consider multi-car insurance

If you have more than one vehicle, multi-car insurance can be an effective way to bring your premium down. Some providers will reward you for insuring both your vehicles by offering a small discount.

Protect your no claim discount (NCD)

The longer you go without claiming on your car insurance, the bigger your NCD could be. While you shouldn’t be put off claiming if you do have an accident, most insurers offer NCD protection as an optional extra you can add to your policy for an additional cost. This protects your NCD, even when you claim, after an accident, collision or incident.

Increase your excess

For most types of insurance, you’re required to pay an excess when making a claim. This fee usually needs to be paid immediately so that your claim can be processed. In some cases, an insurer will provide a set excess fee, however you may also come across what’s known as a voluntary excess. This means that you can choose the amount of voluntary excess you wish to pay (in addition to any mandatory excess your insurer may charge) in the event that you have to make a claim. This voluntary fee is usually selected when you first take the insurance out. If you choose to pay a higher excess, your premium usually comes down in price, meaning you pay less for insurance per year. It does mean that if you have to make a claim, you’ll be required to pay more upfront. You should think about this carefully before making the decision and don’t set your excess so high that it makes claiming on your insurance pointless. For example, if £250 is the mandatory excess your insurer charges for car insurance, so you may want to raise this to £500 by selecting a further £250 voluntary excess.

Choose a car in a low insurance group

Did you know that every car falls into a certain insurance category that means it can be more or less expensive to cover? The categories range from 1 to 50 and the lower the number, the less risky vehicles are deemed to be - and therefore the cheaper they can be to insure. So if you’re thinking of choosing a new car, you may wish to select one in categories one to 10. These include models such as the Nissan Micra, Kia Rio and Volkswagen Polo. Avoid expensive cars with large engines, such as the Ford Mustang, Alfa Romeo Giulia and the Jeep Grand Cherokee SRT8 as these will fall into the higher risk categories.

Add a named driver

While you may think that adding a driver will increase the price of your insurance, sometimes the premium can come down if the driver is deemed low risk. For instance, you can add a relative as a named driver. This allows them to drive the car if they ever need to but could also make your car insurance cheaper.

When you come to apply for car insurance, complete a few test quotes with or without a named driver to see what difference it makes to the cost. If it doesn’t make any difference or causes it to go up, you can take them off again.

Insurance can be pricey, but it doesn’t need to be if you use these helpful tips to bring the cost down.