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How to find cheaper car insurance

Article supplied by GoCompare.com

Car insurance is a legal necessity in the UK, but much like many of life's essentials, it can be expensive. According to the AA British Insurance Premium Index the average comprehensive car insurance policy now costs £702.47 a year – that's a rise of £20 in the three months to June 2008 alone.

So how can you cut car insurance costs?

There are many tips to reduce the cost of car insurance including:

  • Get the right level of cover
    Do you need third party, third party fire and theft or comprehensive cover? Clearly the more cover you have the better protected you are. However, if you drive a vehicle with a low value, perhaps just a few hundred pounds, purchasing a comprehensive policy could cost you more in annual premiums than the vehicle is worth, so think about the level of cover that's right for you.
  • Shop around
    Compare as many quotes as you can to find the best deal - an insurance comparison website will do the hard work for you.
  • Buy online
    The majority of insurers offer discounts if you buy a policy online due to the reduced overheads.
  • Drive a car with a low insurance group
    Performance and prestige cars tend to have higher insurance groups as they have higher repair and replacement costs and can be desirable to thieves. A car with a small engine size and a low insurance group will cost less to insure.
  • Improve security
    If you can prove to an insurer that your vehicle is comparatively secure you should be able to earn discounts on your premiums. Measures you can take include fitting a car alarm and immobiliser, parking your car in a garage overnight and fitting a tracker to prestige or performance models.
  • Avoid claims and convictions
    Most car insurance providers offer no-claims discounts – so if you stay accident free, you should reap the rewards. It's also important to stay on the right side of the law as two or more speeding convictions could cause premiums to rise by as much as 74 per cent with some insurers.
  • Pay annually
    If you can afford to, pay your premium upfront rather than by monthly instalments to avoid interest charges.

So where can you find the cheapest car insurance?

Research by a comparison website in 2008 found that two providers are tied as the UK's cheapest car insurers on average – Kwik-Fit and Swiftcover both produce average premiums of £277. However, it is still worth shopping around as these insurers may not offer the level of cover you require and may not be the cheapest for you as premiums vary depending on your driving record, your vehicle, your occupation and where you live.

As well as thinking about the cheapest car insurance consider the level of cover you require too. You might be willing to pay more to be better protected.

In addition, there are many specialist providers that may prove cheaper for you depending on your circumstances. For example if you're a new or young driver, Norwich Union offers a rapid bonus scheme and Endsleigh includes a Pass Plus discount which could save you money. The likes of Adrian Flux and Footman James have policies designed for performance car drivers; while Sheila's Wheels, Diamond and Ladybird market policies to females with incentives such as handbag cover.

Understanding your insurance contract

Before buying read through the terms and conditions of your contract and look for exclusions which could prevent you from making a claim. Also check the policy excess so you know how much you have to pay upfront should you need to make a claim.

When making a car insurance claim inform the insurer as soon as an accident occurs (most have a dedicated 24 hour helpline), follow its advice carefully and supply as much supporting evidence as you can, such as photographs and witness contact details, if appropriate.

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