Money & Insurance > Guides

How to cut the cost of car insurance

Robin Bowman

Robin Bowman
Oct 27, 2017

We’ve said it before and we make no excuses for saying it again – cheapest isn’t always best.

Too many car insurance buyers focus only on price and that’s a trap for the unwary. You can well end up with a product that’s rubbish, or one that's just not suitable for you. But you'll only find out when it's time to claim.

First things first then – make sure any car insurance you’re considering fits your needs.

Having said that, we all want to get the best for less.

So here are our tips on how you can cut costs.


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Never auto-renew

We’ve lost count of examples of people we come across who don’t bother to compare quotes at renewal time. 

Insurance companies love it when we auto-renew – it allows them to slide the prices upwards, often by huge amounts, without us paying attention. So, don’t be fooled – they do not have your best interests at heart and they will not reward you for your loyalty. These days, insurers do have to state what your premium was the previous year. But even if it hasn't shot up by a lot, DO see if you can make savings by shopping around. 

The golden rule is ALWAYS shop around, even if the quote you’re being offered by your current company seems good. Even if it’s gone down – still check what’s out there.


Never auto-renew car insurance - you will end up paying over the odds.


Go for a higher excess

This isn’t going to suit everyone, but those who can afford it should consider taking on more of the cost of a claim than average. Boost your excess – the money you’ll have to pay in the event of a claim – as high as you can afford.

This will certainly cut the cost of your premiums and it also make more sense longer term as well because it will discourage you from claiming for smaller incidents – and not making a claim is perhaps the best way of keeping down your premiums. 

HAVE YOU READ: 10 Tips on How to get the Best Car Insurance


Don’t pay monthly

See if there’s a saving if you settle your insurance bill in one go as opposed to paying by direct debit every month – there should be.


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Most of us Brits aren’t natural hagglers, but we’re slowly realising we’re mugs not to have a go, especially with car insurance.

Speak to the insurer armed with their quote and suggest to them you might be able to do better elsewhere, or ask them if they can ‘move a bit on the price’. You’ll be surprised how often they can indeed move a bit.  Then ask them to go even lower. Never be frightened to just say, "Thanks, but no, thanks." There's always another deal to be had, just by shopping around.


Drive fewer miles – honestly!

The less time you spend driving, the less of a risk your are to insure. So, if you only insure for the realistic mileage you’ll do in a year, rather than pulling a big figure out of the air, you will save money.

5,000 fewer miles, for example for a typical 35-year old, can save around £50 on your premium – so this is a biggie.

It’s such an easy saving that it might tempt some people to be a little less than honest. This is a bad idea. Insurance companies know people do this and can easily check. 


Drive fewer miles to cut your premium down.


Insure your no-claims bonus?

This will add to the cost of your premium, so it’s perhaps an odd one in our list. In fact we’re in two minds about this. It’s your call.

Here’s why we’re unsure.

Protecting your hard-earned no claims seems like a no brainer. But it can add a substantial chunk to your premium. 

Even so, in the event you have to claim, you know those years of discount will still apply next time you renew.

But there's quite a big but ...

You may be shocked to realise that while you still get a discount through the no-claims protection, the cost of your new policy (before the discount is applied) will have shot up because you claimed.

So, you’ll almost always still end up paying more if you have made a claim, no-claims protection or not. It's just that if you keep the no-claims bonus, you won't pay as much more.

Like we say, it’s your call. But, on balance, we reckon it’s probably still a good idea to pay a little more and preserve that discount. 

Top Tip: Just be certain of the small print as policies do vary in how they define a no-claims bonus. For example, an accident that is not your fault should not affect your bonus, but for some policies it will. So, check.


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Consider a black box

Known as telematics, these devices are becoming more popular, and no doubt in the future we’ll all be driving around with devices that record our driving, measuring speed, gear changing style, breaking, and even how often we swear at other drivers. 

Policies that allow you to use a telematic can help cut policy prices dramatically, and are a great idea especially for those who would otherwise fall into a high-risk category of driver – like the inexperienced teen.

Of course, you do have to actually drive well to get a better insurance deal!  Drive badly and you'll end up paying even more. 


Get a cheaper car

Over a lifetime you’ll probably be spending a fortune on car insurance. So, running a smaller–engined car not only makes sense from a maintenance and running costs view, it will also cut your insurance.

Some of the latest green cars have puny engines, but perform like those with much mightier ones. And the premiums are far less. You’ll also be smug in the knowledge that you’re doing your bit for the planet as well. Oh, and the car tax is cheaper.


Don’t add young drivers to your policy

It seems unfair that all younger drivers get lumped together in the high-risk category by insurance companies.

But the statistics don’t lie. If you’re a younger driver, which generally means under 25 years old, you’re far more likely to be involved in an accident, so you’re riskier to insure.


Adding young drivers to your policy will see your premium rise.


Adding your teen to the family car’s policy is going to send it through the roof, especially if you have a half-decent vehicle.

You may be better off sorting out a separate, lower-value car for your offspring’s use.

But don’t be tempted to ‘front’ – that is pretend that you are the main driver with your inexperienced son or daughter as a named one. Insurance companies will take that kind of thing very seriously indeed.

If you need to make a complaint about your insurer, use A Spokesman Said's free tool - we're in your corner.

When did you last switch your car insurance provider?

Last year 65% of customers didn't switch their car insurance to try and get a better deal.