Owning and maintaining a vehicle involves significant ongoing expenses. In addition to fuel, road tax and maintenance costs, drivers in the UK are also legally required to have car insurance in place before taking to the road.
The good news is that average motor insurance premiums have fallen slightly. In the third quarter of 2024, the average premium fell by 2pc to £612, according to the latest data from the Association of British Insurers (ABI).
However, this was still £50 more expensive than the same period in 2023, with record claims costs and price inflation putting pressure on insurers.
Here, Telegraph Money explains the steps you can take to keep car insurance costs to a minimum, whether you’ve been driving for decades or have only recently passed your test.
The following tips could help lower your car insurance premiums:
Shop around and compare quotes:
Never settle for the first quote you get. Use comparison websites to explore a wide range of providers and find the most competitive rate.
Increase your voluntary excess
This is an optional amount you can pay towards the cost of a claim and the higher it is, the less you pay for your premiums. Just make sure it’s affordable as you must pay this on top of your compulsory excess in the event of a claim.
Reduce your add-ons
Ask yourself whether you really need cover for lost keys, driving abroad or misfuelling. Cutting down on optional extras will reduce your premiums.
Park in a secure location
Keeping your car off the road overnight, either on your driveway or in a garage, can reduce the chances of vandalism and theft and therefore lower your premiums.
Improve your car’s security
Adding a Thatcham-approved alarm or an immobiliser to your car can be another way to cut car insurance costs.
Pay annually
If you can afford to pay for your car insurance in one go each year, you’ll pay less than if you pay monthly when insurers typically add interest.
Reduce your mileage
Driving less frequently lowers the risk of an accident and your car insurance premiums will be cheaper as a result. However, it’s important not to underestimate or exceed the annual mileage limit you’ve specified as this could invalidate your policy.
Discounts and bundling
If you’re insuring more than one car, you might save by choosing a multi-car insurance policy. Some insurers also offer discounts if you bundle your car and home insurance together. But you’ll need to compare these costs against standalone quotes for the same policies to ensure this is the cheapest option.
How to get cheap car insurance for new drivers
Although the above tips should work for all drivers, the following tips are particularly relevant for new drivers:
Choose the right level of cover
Comprehensive car insurance cover isn’t always more expensive than third-party policies (the legal minimum requirement). Third-party cover is often chosen by higher-risk drivers trying to reduce the cost of their policy, but this has pushed up the price of this type of cover. Comprehensive cover can often work out cheaper and offers better protection.
Add a named driver
Adding an older, more experienced driver to your policy (often a parent), can lower your premiums. However, the person who uses the car most must be named as the main driver, otherwise you could be found guilty of fronting. This counts as insurance fraud and could invalidate your policy.
Choose a modest car
You might fancy a flashy vehicle with fast acceleration and a powerful engine, but such vehicles usually sit in a higher car insurance group and cost more to insure. Plump for one in a lower group and you’ll see your insurance costs drop. Electric cars also cost more to insure on average than standard vehicles so it will likely put your premiums up if you move to an EV.
Avoid modifications
Similarly, it’s best to avoid modifications such as tinted windows, spoilers or alloy wheels as these push up premiums due to the higher risk of theft and accidents.
Consider a telematics box
A telematics box (or “black box”) uses technology to track how safely you drive and your insurance provider adjusts your premiums accordingly. The safer you drive, the less you pay.
Take an advanced driving course
Some insurers view advanced driving courses such as Pass Plus as a sign of safer driving and may offer you a discount on your insurance premiums. However, it’s worth checking with your insurance company first.
Build your no-claims from day one
Driving safely and avoiding claims can help you build your no-claims discount which can reduce your premiums each year.
Get a dashcam
Some insurance providers offer an automatic discount if your car has an approved dashcam, so it’s worth finding out.
What’s the best time to buy car insurance?
It’s a legal requirement to have car insurance in place before you take your vehicle out on the road.
However, if your existing policy is coming up for renewal, research from price comparison site Go.Compare shows that the best time to renew is between 21 and 28 days in advance, with the biggest savings available 26 days before renewal.
The data shows that purchasing a car insurance policy at this point costs an average of £390, a saving of £164 compared to buying a policy on the renewal day.
Keep in mind that many insurance providers automatically renew your policy each year, so it’s important to shop around in advance to ensure you’re getting the best deal, and switch where necessary.
