CAR insurance is an essential cost when it comes to running a car – we explain how to compare prices and keep premiums down.

It comes as millions on drivers admit they have no idea what their insurance covers, according to MoneyExpert.com.

Thankfully, there are lost of ways you can cut the cost of your insurance.

Here's our guide to making sure you get the best cover for the cheapest price.

Always compare prices and never auto-renew

When it comes to renewal time, insurers rely on you not bothering to shop around.

But research from comparison service MoneySuperMarket shows that Brits are chucking away a whopping £284 a year by auto-renewing.

You can knock hundreds of pounds off your annual bill by spending just a few minutes shopping around.

Use the following websites to compare deals:

  • MoneySuperMarket
  • Confused
  • GoCompare

It's worth using more than one, as different sites have different relationships with each insurer.

Some insurers, such as Direct Line and Aviva, don't use comparison sites, so you should contact them directly to see what they'll offer.

Once you've found the best deal – contact your existing provider to see if they can beat it.

Make sure you tell them the new cheaper price that you've found.

If they can't match it, then switch.

What can you do if you can’t afford your insurance?

IF you’re struggling to pay your insurance, whether that’s monthly or annually, contact your provider and let them know.

They should be able to offer some help which could mean lowering your payments.

We've got a guide on whether you can claim a refund on your insurance if you haven't driven as much during the coronavirus lockdown.

For example, Direct Line told us you might be entitled to a refund if you estimate your annual milage is actually 1,000 less than what you originally said in your policy.

But insurance companies don't have to do this. This is because there wasn't any measures put in place to help with car insurance costs during the Covid-19 pandemic, unlike the six-month break from MOTs.

Remember, having car insurance is a legal requirement. You could face a £300 and six penalty points on your licence if you're caught driving without cover.

Check your job title

When it comes to shopping around on comparison sites for a new policy, your job title could have an impact on how much your policy costs.

In fact, research revealed by Comparethemarket shows car insurance costs can vary by over 50% depending on your job title or employment status.

But whatever you do – don't lie about what your job and try and cheat the insurer.

If you do your insurance could be invalid and you'll find you won't have any cover when you really need it.

But if you can legitimately tweak your job description, you could save cash.

For instance someone who selects "milk lady" could pay as much as £61 more than someone who selects "milk person".

Other jobs that tend to have a lot of similar options include office work, building and construction, teaching and journalism.

MoneySavingExpert has a tool you can use to see if you could save.

Go fully comprehensive

Choosing a comprehensive policy can actually work out cheaper than if you took out just third party cover.

It's because some insurers look at third party policies and associate them with higher-risk drivers looking for the cheapest cover possible.

Full comprehensive car insurance usually covers:

  • Damage caused by fire
  • Theft and vandalism
  • Accidental damage caused by negligence, for example spilling something
  • Any personal injuries that result from an incident involving your vehicle where you are at fault
  • Windscreen repair
  • Courtesy cars while yours is being repaired

Many insurers will only offer comprehensive policies for cars worth more than £1,500 but if you're looking for cheap cover, make sure you check fully-comp offers in case you can save.

Be as accurate as you can with your annual mileage – the less your mileage, the lower your premium is likely to be.

But don't be tempted to wildly underestimate how much you drive, otherwise you'll be committing fraud.

Which companies offer car insurance?

THE following providers are just some of the big names that sell car insurance products:

  • AA
  • Admiral
  • AXA
  • Bell
  • Churchill
  • Co-op
  • Dial Direct
  • Diamond
  • Elephant
  • Endsleigh
  • Esure
  • Go Skippy
  • Halifax
  • Hastings
  • John Lewis
  • Lloyds
  • M&S
  • More Than
  • RAC
  • RSA
  • Sainsbury's
  • Santander
  • Sheila's Wheels
  • Swinton
  • Swiftcover
  • Tesco

Pay up-front

Obviously not everyone can pay for their annual premium in one go, but if you can afford to, the cost of your cover will be cheaper.

That's because if you pay monthly, you'll usually be charged interest on top of your premium.

Research by The Sun showed some companies charge customers as much as £365 a year extra if they pay monthly.

Add a second driver

Adding another driver to your policy can also cut costs.

If you're a high risk driver and you can add someone who is much lower-risk, you might be able to bring down the cost of your policy.

This can work for young drivers – who will often have to pay pricey premiums as they are viewed as a risk – and their parents, who could have years of driving experience and deemed to be a lower risk driver.

Remember that there are no hard and fast rules about this and the only way you'll find out if it will cut your premium costs is by shopping around for quotes.

If you're a family with two or more vehicles, you could save thousands by taking out a multi-car policy too.

Increase you excess

Increasing your excess should make your premiums go down, but this isn't always the case.

When you're getting a quote try different levels of excess to see how it affects your premiums.

You should also keep in mind that if you do have an accident, you'll have to pay this excess as an upfront cost.

So make sure you can afford whatever excess you choose, otherwise you might lose cover.

Get cashback

Some sites will offer you the chance to get cashback when you pay for your car insurance.

Cashback can come via the comparison site or if you go directly through the insurer's website, so when your shopping around, check to see what offers are available.

See what offers TopCashback has – but don't let this be a deciding factor for what car insurance policy you choose.

For example, Swinton will give you £50 cashback if you take out a new policy, or Go Compare will offer £31 cashback.

Consider black box insurance

Another way you can cut your insurance costs is by switching to telematics insurance.

Also known as "black box" insurance, you'll get a small box fitted to your car which records how you drive.

It will record things like speed, your driving style, the time of night you typically use your car and what even type of roads you drive on.

The idea is that by showing your a responsible driver, you'll be offered cheapper premiums.

Origianlly, the polices were designed for younger drivers, but lots of insurers now offer them to all drivers.

Research from comparison site you Uswitch found drivers could save £400 a year by swapping to telematics from a standard policy.

The Sun also has a guide on how to find the best home insurance policies.

Plus, here are the best interest-free credit cards for 2020.

And we've also looked at the best balance transfer credit cards offering up to 29 months 0%.


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