The cost of car insurance is rising but switch now and you could be surprised at the savings to be made, says Martin Lewis
The reason for this warning is that car insurance costs have rocketed by 16 per cent over the last year, according to the AA, and it’s saying it “can’t see an immediate end” to the rises. Yet when you get car insurance the price is fixed for the year, so by locking into a policy now you effectively future proof against rises
So here are my ten need-to-knows, though for far more help in every scenario, see my mammoth www.mse.me/carinsurance guide.
1. To find the cheapest price at speed – combine comparison sites then add those they miss.
There’s no one cheapest insurer, as prices are set individually. So the aim is to check as many quotes as possible, quickly and easily. Comparison sites do that, but they don’t all cover the same insurers or even give the same price for the same insurer. So . . .
a) Use two or three of the biggies: www.moneysupermarket.com, www.gocompare.com, www.confused.com and www.comparethemarket.com.(Open all the windows at the same time, then cut and paste your info across.)
b) A couple of the big insurers like www.DirectLine.com and www.Aviva.co.uk aren’t on them. Yet they can be competitive, especially if you’ve no convictions and a clean licence, so check these separately too, as they can lead to big savings. Also there can be special promo deals not included – there’s a list at www.mse.me/insurancedeals
And remember always check that the policy has the right level of cover for you.
2. Not at renewal? What you can do: If the predictions are correct and prices keep moving up, today’s prices will soon look cheap. Plus many are overpaying already, especially those who just auto-renew each year.
Renewal within 60 days? Some firms such as www.Aviva.co.uk, www.LV.com and www.Nationwide.co.uk give quotes valid for 60 days so get one now, then check against quotes at renewal time. As @dimuthuj7 tweeted: “@MartinSLewis Renewal £521. Quote a month ago, which was honoured, of £319. Thanks.”
Midway through a policy? Many wrongly think you can only switch at renewal, but you can do it at any stage. Check if you can get a cheaper policy now. If so, provided you’ve not claimed, for a £50-ish admin fee (factor that in), you can usually cancel and get the rest of the year refunded. You won’t earn the year’s no-claims bonus, but if it means you save now and prevent future price rises, it can be a big winner.
The impact of this can be big, as @mubzymalone tweeted me: “Just HALVED my car insurance, saving £543 by changing mid-policy. HUGE thanks to @MartinSLewis for the tip.” Not only is he saving now, he’s locked in the price for a year. So the sooner you act, the more you’re likely to save.
3. Check multi-car policies if you’ve more than one car in the home. A few insurers offer special discounts if you have more than one car in the home – but comparison sites can’t include these deals, so do it manually. www.Admiral.com Multicar gives discounts of up to 25 per cent, depending on how many cars you insure. You can also get discounts by linking the household standalone policies with Churchill, Direct Line and Privilege.
The savings here could be huge. Equally, they can be a rip-off; it’s about trial and error.
4. Comprehensive cover may be cheaper than third party. Bizarrely, merely selecting comprehensive means some insurers see you as a lower risk, and it lowers the price, so always check comprehensive too if you want the cheapest.
5. Adding an extra driver could cost less. Again, counter-intuitively adding another person to the policy can bring down your premium, as the average risk is reduced. It’s especially strong if you’re a young driver adding a responsible older driver, but can work for others too ,as Bouncybubbles told me: “Quoted £900 from £500 previous year. By comparing then adding my husband I got it down to £298.”
6. Legitimately tweak your job title. You can’t claim to be the Chancellor if you’re a pole dancer (or vice-versa), but many people have wide-ranging roles. So by tweaking your job description you might find your quote is lower. Like @RPJ_Webster93 who tweeted: “@martinslewis Thanks to your ‘reword job title’ tip my car insurance quote reduced by £500.” He legitimately changed his job title from ‘council worker’ to ‘civil servant-cleric’.
7. Don’t “pay monthly” – it doesn’t exist. Insurers may call it paying monthly, but actually they loan you the year’s cost and while a few are interest free, most charge often hideous interest. The worst offender I’ve seen charges up-to-93 per cent APR interest. So check and if it’s costly, pay upfront if you can. If not, try to get one of the many year-long-plus 0 per cent credit cards. Just ensure you pay it off over the year, then there’s no cost.
8. Consider installing a “black box”. This device is the tech (officially called “telematics”) insurers put inside your car to monitor how you drive and when. It’s especially useful for younger drivers facing hefty costs via other means, though if your mileage is limited and you don’t drive at peak times or late at night, it can work well too.
9. Got special circumstances and struggling? Speak to a broker. If your circumstances aren’t normal, getting insurance can be tough. Often getting an insurance broker to find a bespoke policy for you can beat comparison sites. See www.biba.org.uk/find-insurance/
10. Can you get cashback? Once you’ve found your cheapest policy check cashback websites like Quidco.com and TopCashback.co.uk to see if you can get any money back on the policy you’ve chosen if you buy it via them – this can be over £50, so is often worth it.
Yet don’t let the cashback tail wag the dog. Choose the right policy first, then see cashback as an added extra (as it isn’t 100 per cent guaranteed).
Martin Lewis is the Founder and Chair of Money Saving Expert. To join the 11 million people who get his Martin’s Money Tips weekly email, go to www.moneysavingexpert.com/latesttip Watch the live 1hr launch of the new series of The Martin Lewis Money Show on STV at 8pm on Tuesday 22 November.