With the cost of living soaring in the UK, everyone is trying to do what they can to reduce their bills and make every penny count.
So let’s talk about how you can save money with cheaper car insurance policies. We’ve done the research and crunched the numbers to come up with 21 tips on how to reduce the price of your car insurance policy.
Before we get started, here’s some things worth knowing.
Comprehensive cover is often cheaper than third party, fire and theft
Don’t assume a more basic level of cover means paying less. A while back, insurers realised people who get more basic cover are statistically more likely to have accidents.
Because of these statistics, insurers now usually charge less for fully comprehensive insurance than more basic third party, fire and theft cover.
So, always compare quotes for all types of cover… even if you feel basic cover is all you need.
(We've written a bit more about the different types of car insurance here.)
Not all comparison sites show the same prices
Car insurance comparison sites don’t all list the exact same insurers. And they don’t always list identical prices either. So it’s a good idea to check a range of different comparison sites when you’re getting quotes.
Not all great deals show up on comparison sites
Some insurers choose not to be listed on comparison sites. But just because they’re not on comparison sites, it doesn’t mean they’re more expensive.
Some of them actually offer even better prices. So it’s worth keeping your eyes peeled for them when you’re searching online.
New rules say car insurers can’t penalise existing customers with hiked prices at auto-renewal
Until January 2022, insurers were allowed to raise your premium at auto-renewal for no real reason. We hated this. This concept was nicknamed the ‘loyalty penalty’ and was also known as ‘price walking’.
In January 2022 a new set of rules came into play 🥳 These say that car insurers aren’t allowed to charge existing customers more just because they’re auto-renewing. Instead, they’ll have to charge what you’d expect to pay for a brand new policy.
This means there probably won’t be as much money to be saved from shopping around at renewal as there used to be. But it’s still a good idea to shop around if you want to get the cheapest policy.
Right, here we go! Our top 21 tips on how to get cheaper car insurance.
1. Shop around, even mid-policy (but be wary of cancellation fees)
Insurers are now banned from hiking the cost of your car insurance for no reason at auto-renewal (hooray!). But it still pays to shop around, and you don’t always have to wait until renewal time to do so.
Depending on how long you’ve got left on your car insurance policy, there’s a chance it could work out cheaper overall to switch insurers - even when you include the cost of cancellation fees.
Just make sure to do your maths. Work out exactly how much you’ll save by switching to a new company. Then take away the cost of your cancellation fee to see if it’s still worth it.
2. Make sure you’re on the electoral register before you get quotes
When you register to vote in the UK, your details (like your name and address) get listed on something called the electoral register.
Lots of insurers use the electoral register to check their potential customers’ identities. If they can’t find you on the electoral roll, they might make your quote higher - or they might not cover you at all.
3. Buy your car insurance about 23 days before you want it to start
When you buy your car insurance can also affect how much it costs. Research has shown that quotes are at their cheapest about 23 days before your chosen start date. The later you leave it after that, the higher your quotes are likely to be.
This might be because insurers see those who leave shopping for insurance until the last minute as less organised – and so riskier to insure.
Quotes tend to be higher before around the 23 day mark, too. This could be because insurers don’t like giving quotes that far in advance.
4. Look into multi-car policies if you’re insuring more than one car
If you have more than one car in your household or in your immediate family, it might be cheaper to insure them with a multi-car policy.
A multi-car policy is where a few different cars are insured under one policy.
The main benefit of doing this is that it can be cheaper. But this is not guaranteed. For some people, a multi-car policy might actually work out to be more expensive. So it’s worth looking at quotes for multi-car policies and separate policies.
5. Look into multi-insurance policies (like home insurance plus car insurance)
Some insurers offer cheaper rates when you buy more than one insurance product with them. For example, your car insurance and home insurance 🚗🏡
It’s worth checking what deals you can get by sticking with one company.
6. Improve your credit score
A better credit score shows your responsible and could result in a cheaper premium.
We've written a whole guide about credit scores and car insurance - have a read!
7. Be aware of any interest on monthly payments
Most insurers charge interest if you choose to pay monthly instead of annually - not Cuvva, though! - so you end up paying more overall than if you pay for your car insurance in one lump sum.
If you can’t afford to pay for your insurance in one go, you could still save money by paying for it with a credit card – as long as it has a lower interest rate than the insurance company.
Or even better, you could use a credit card with 0% interest for purchases. Just make sure to pay back the full amount before the credit card company starts charging you interest (or increases your interest rate).
8. Get Cuvva and join the car insurance revolution
Time for a shameless plug! But only because it’s so relevant to getting cheaper insurance…
At Cuvva, we offer a whole new type of monthly subscription car insurance. There’s no up-front deposit, no cancellation fees, and no interest rates.
We’ll never try to sell you less cover for more money, either. Our insurance is always fully comprehensive.
And with Smart Pricing, the better you drive, the more you could save. All it uses is the phone in your pocket - not a black box in sight!
Okay, okay. We're done… back to the list. 👇
9. Make your voluntary excess bigger
Your voluntary excess is the amount you have to pay up front if you make a claim on your insurance.
Let's say your voluntary excess is £250. If you have an accident and make a claim, it’ll cost you £250.
The higher you make your voluntary excess, the cheaper your insurance premium will be. But, of course, that means you have to fork out for the higher excess amount if you do need to make a claim.
There’s a balance to strike here. You want to make sure your excess isn’t so high you wouldn’t be able to pay it if you need to make a claim. But having it too low could make your premium unnecessarily expensive.
10. Think about increasing security measures for your car
Your car insurance premium might be cheaper if you increase your car’s security. You could install an alarm, a locking wheel nut, and an immobiliser, for example.
Check insurance quotes before you actually buy anything though. You’ll want to make sure you’d save enough on your insurance to make any extra security purchases worth it.
11. Build up a no claims bonus
Building up a no claims bonus (also called a no claims discount) is one of the best ways to get cheaper car insurance.
The longer you go without making a claim, the more no claims discount you’ll get.
So it’s worth thinking twice about making a claim if the damage is just aesthetic.
If making a claim will ruin your no claims bonus, you could just leave the car as it is. Or you could pay to get it fixed separately.
(By the way: you can still build up a no claims bonus with Cuvva's monthly subscription.)
12. Remove stuff you don’t need from your car insurance policy
There might be add-ons on your insurance policy that you don’t need. Like courtesy car cover, breakdown cover, car key cover… the list is pretty long.
To make sure you’re not overpaying, check your policy details carefully, and take off anything you don’t actually need.
13. Look into buying add-ons as separate products
Some car insurance add-ons might be cheaper to buy separately. For example, it might be cheaper to get breakdown cover with a different company than to include it in your car insurance policy.
14. Look into adding another (responsible) driver onto your policy
Sometimes adding another named driver to your car insurance policy can make it cheaper.
Say you’re a young driver (young drivers are seen as riskier). Adding a responsible driver to your policy (like someone older, with a healthy claims record), might lower your premium.
It’s not guaranteed though. It’s just something you can play around with when you’re doing quotes. We've written more about named drivers here.
15. Get a less ‘risky’ car
Cars with small engines are much cheaper to insure than cars with big engines because they’re seen as less risky by insurers.
Generally, the more valuable a car is, the more costs to insure too.
So if you’re really struggling to afford your car insurance, it might be worth downsizing or getting a cheaper car.
Cars with modifications (like an exhaust upgrade or wheels and alloy upgrades) also usually cost more to insure. This is because their parts might be more attractive to thieves, or because they’re faster to drive and therefore riskier.
16. Consider taking a driving course
Taking an extra driving course might get you cheaper car insurance.
They cost money though, so you’d need to make sure the price of the course didn’t outweigh the savings you’d make.
Not all insurers take driving courses into account, so it’s important to check that too.
A couple of the main courses to look into include:
17. Be accuarate with your mileage
Another factor that goes into calculating your car insurance premium is your mileage.
When you buy car insurance the company will normally ask you to tell them roughly how many miles you drive a year. Insurance is normally cheaper the less you drive. (If you’re on the road less, you’re less likely to have an accident).
It’s important to be completely honest in your estimate, though. Underestimating your mileage could result in your policy being invalid and claims being rejected.
18. Look into telematics policies
A telematics policy (also sometimes called a black box policy) is where you have a device fitted to your car that monitors how you drive. It’s so your insurer can see how safely you drive. The less risky your driving is, the cheaper your insurance should be.
You can read all about how black box insurance works here.
At Cuvva, we offer something a bit different to the traditional black box policy. Instead of a physical device installed in your car, we monitor your driving through your phone’s location and sensor data.
We call it Smart Pricing, and it saves good drivers up to a third on their insurance. Unlike most insurers, we don’t charge you anything to instal or cancel, either - in fact, you get 10% off your policy just for signing up!
19. Look into dash-cam insurance
Dash-cam insurance is where you have a camera attached to the front interior of your car. It’s worth looking into because some insurers offer a dash-cam insurance discount. This ranges between about 10 and 15%.
20. Make sure you know about different insurance companies’ extra charges
Hidden insurance charges are easy to miss, but they can add £100s to the cost of your car insurance.
Some companies charge you to change your personal details, like your address, for example. There might be charges to make changes to your policy midway through your contract too.
And don’t forget about the high interest rates most insurers charge if you want to pay monthly.
All of this can soon add up. So it’s worth looking into insurers’ hidden fees before you sign up to a policy.
(By the way: Cuvva doesn’t charge cancellation fees, joining fees, or interest. 😌)
21. Try negotiating with your current insurer
Once you’ve checked quotes across a few different comparison sites, try haggling with your current insurer.
They might want to keep your business. So if you’ve found a cheaper quote somewhere else, they might match it or go even lower. Worth a shot.