How to beat rising premiums and cut costs when applying for car insurance…
With the cost of car insurance accelerating, TotallyMoney looks at how customers can keep down costs and unlock the best deals. Average car insurance premiums rocketed by 67% in 12 months, from £373 to £623*. Some car insurers are charging customers up to 39.11% APR for paying monthly, adding an extra £62.20 in interest on the average premium while a third (33%) of drivers pay their motor insurance monthly.
Car insurance premiums have more than doubled by 124.4% in just 10 years. Ignoring no-claims bonuses, driving a cheaper car and other things which you can’t change during the application process, Alastair Douglas provides five top tips to get customers into top gear when getting car insurance
1. Compare quotes
“With almost 200 providers out there, spending a few hours doing your research might not be the most enjoyable use of time, but it could be one of the most cost-effective. So, it’s important you don’t cut any corners, and check what’s available across different comparison sites, while still having a look at what you could get if you go direct. That way you’ll really be able to check the whole market, and lock in the best offer.”
2. If you can, pay annually
“When you pay monthly, your provider is effectively lending you the money to pay for a whole year’s insurance, and you then pay it off in separate instalments. And because of that, some insurers are charging customers almost 40% interest. With sky-high costs, paying up front might not be a choice for most people, but it might be worth seeing if a low-cost loan actually works out cheaper.”
3. Check your credit score
“Because monthly car insurance payments are treated like a loan, a poor credit score could be holding you back from accessing the best offers. So make sure you check your report and correct any errors, so you can get into top gear when you next apply. And if you’re worried that shopping around might leave a mark on your credit file, then don’t. Comparing offers will use a soft search, which doesn’t have a negative impact, so don’t hold back.”
4. Get a new job (kind of)
“When taking out car insurance, providers will ask you about your employment — and even though it might seem odd, it can have an impact on how much you pay. That’s because they treat some jobs as being more risky than others, with bankers, decorators and delivery drivers having to pay some of the highest premiums. And while you mustn’t lie about your job to get the best offers, it could be worth tweaking the title to reduce how much you pay.”
5. Make all the info accurate
“Car insurance forms are long (and boring), but that doesn’t mean you shouldn’t take care when filling them out. That’s because details like mileage, where you park your vehicle, and how you use it can all have an impact. So when filling out your form, give good estimates of how far you drive, if you really are using it for commuting, and if there are any modifications.”
TotalMoney sources: * Consumer Intelligence /† Which?: Insurers charging eye-watering ‘tax on being poor’ to pay monthly / ‡ FCA: Expectations on cost of living and insurance / § Go Compare: How your job affects your car insurance
