Cutting the cost of your car insurance

Like any motoring bill, car insurance premiums seem to rise every year.  When this happens it pays to look for a company that could offer you the best deal to suit your circumstances. For example, if you’re over 50 you could make a substantial saving by getting a quote from specialist insurers.

Also check all your details are correct. Have you really done the mileage stated on the policy? Do you need extras like breakdown or legal cover? And how do you describe what you do for a living? Different job titles can attract different prices, so use the car insurance job picker tool on Money Saving Expert to see how this can affect what you pay. Honesty is always the key when applying for insurance and this tool doesn’t involve getting creative with your job title, but there are accurate ways of describing your job that could save you money.

If there are out-of-date points on your license, apply through the DVLA to have them removed. The same goes for accidents or claims you’ve made: insurers only usually consider those within the past three or five years, so if that time has elapsed, you no longer need to mention them.

Adding security to your car, such as an alarm or an immobilser, is relatively cheap but can have a dramatic impact on your quote. Also, if you have a garage, park your car in it. This sounds obvious, but again it will cut your premium as you’re seen as a substantially lower risk of theft.

No claims

The Holy Grail of car insurance is the No Claims Discount (NCD). If you’ve gone five years without claiming, some insurers will knock up to 70 per cent off your premium. And protecting those no claims won’t usually add much to the premium – it could be money well spent. But drivers can only build up NCD on one car, so if you’ve been a named driver on a spouse’s vehicle, for example, you have to start from scratch.

Also, consider the logic of paying extra for a lower excess. In a lot of cases it’s worth paying for small repairs yourself to protect your No Claims Discount. If this is the case there’s no point paying extra on your policy – raising the excess can save you money.

How to pay

It’s more difficult to budget for rising annual premiums, and insurers realise this. Most will let you pay monthly, but do this and you’re effectively taking out a loan – with interest of up to 20 per cent. This can really hike your premium. Even if you can’t afford to pay in one go, consider applying for a credit card with zero percent interest on purchases (check the rates at Money Saving Expert) and paying for your insurance that way.