Ultimate Guide to Cheap Car Insurance

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Car insurance is expensive, very expensive, but it’s a product, none of us can live without – well, not legally at least. The average cost of car insurance in the UK is now £1,034 per year! And it can be as high as £7,000+ for a new driver, even with a relatively modest car.

By following this guide we hope to save you as much as 50% on your annual premium.

We want you to be Happier, UK!

Your and Your Car

Stuff you can’t change – your age and gender

Unfortunately, your age and gender is a massive influence on the cost of your insurance policy. Young drivers pay more than older drivers and male drivers pay more than female, it’s not fair but it’s a reality. So if you are a young male driver you will have to go for a car in a very low insurance group to keep the costs down to an affordable amount. The good news is that beyond your age and gender there are loads of ways to reduce your insurance premium.

Be a safe driver

The more points on your license the higher your premium will be. So stick to the speed limit and drive carefully. If you’re a safe driver and don’t have many claims in your driving history, you can take advantage of powerful savings with a “No Claims Bonus” with many insurance companies. The maximum No Claims Bonus is usually earned after 5 years of claim free driving and can reduce your premium by as much as 75%. But, and even after you made a claim, after 5 years of clean driving you can reclaim your “no claim” status again and stake your claim on that safe driver reward.

Speeding, prangs reported, and points acquired means companies have to pay out more to cover you, and they want their money back.

Pick a car in a low insurance group

Previously there were 20 different insurance groups for cars, but in 2010 that was replaced by a 1-50 rating system. The lower categories have smaller engines and are considered “safer” than cars in higher categories. The higher the insurance group the higher your premium will be, it’s as simple as that. If you already have a car in the upper categories, but want to save on your insurance, consider a changing to a lower category vehicle before changing your cover.

Parkers.co.uk provide a handy way to look up the insurance group for your car, you can also view cars by insurance group.

Know Your Policy Needs

Three types of policies

There are typically three kinds of policies available: Third party only, third party fire and theft, and comprehensive. Everything else are add ons or variations of those three. Knowing what you need is a matter of looking back at the kind of driver you are and the kind of car you drive.

  • Third Party Only – If you want a bare bones policy, this is the one you want. It covers only the damage you do to other parties and not your own damage. This policy is the minimum requirement for drivers to be able to operate their vehicles. Fire and theft are not covered with a Third Party Only cover.
  • Third Party Fire and Theft – As the title implies, this, in addition to your Third Party Only cover, you can add this benefit to cover the incidents of fire and theft.
  • Comprehensive – Want more? Comprehensive gives you all of the above (fire, theft, and third party), plus accidental and malicious damage to your own car.

Protected No Claims Bonus

Drivers with no claims for a year can get a “no claims” bonus discount. And you can protect your benefit for four years for an additional price. The best part is protected are allowed two claims over the course of three years before they lose their “no claims” benefit. No claim bonus can be as high as 65% so it’s worth protecting if the extra price is not too much.

Legal cover

For extra coverage, in case you’re involved in legal proceedings, you can get legal cover, as well. Know what your limits are when you sign on for this cover, though.

Breakdown cover

Breakdown cover gives you piece of mind, for an extra price. If your vehicle needs more breakdown cover, make sure the policy you’re signing on for suits it.

Courtesy Car

If a car is necessary for your lifestyle, then it’s likely you’ll be interested in a courtesy car. The good news is if you choose a fully comprehensive policy, then you may have access to a courtesy car should your policy will probably provide it. Check with the garage providing your work.

Vehicle Excess

Excess is what you’re responsible for if you make a claim. Age impacts excess – the younger the driver, the greater the excess. The good news it, the higher excess you choose, the lower your premium will be. So if you’re a careful driver, go for a higher excess (in hopes that you won’t have to use it) in order to pay out less on your cover.

Ways to Reduce Your Annual Premium

Take the Pass Plus course

Pass Plus is a government driving course, that if completed successfully, can lower your car insurance. And the cost of the course is around £150.

Add a female driver

If you are male adding a female driver to your premium can actually reduce your annual bill, sounds strange but it’s true.

Limit the miles you do

On cars 10-15 years old or older, drivers can apply for low mileage cover. The less you drive each year means the less you’ll pay on your cover. Careful! If you exceed your estimated 1500-3000 miles you reported you’d drive, then you’ll pay for them.

Cap your engine size

Cars fall into one of 50 categories. The lower your category, the lower your premium. To save money, shoot for cars that have smaller engines and inherently fall into those lower brackets.

Park in a garage overnight

Most companies tell you that covered parking is the cheapest way to go, but in some off instances, it can lower your cost. So check out what your company recommends and follow it.

Don’t report it

Got a prang? Skip it. If you report a prang that will cost less to repair than your excess, your insurer could potentially up your cover costs because of it.


Once you’ve shopped for your quote online and you know what policy you need, you can check with cashback sites like TopCash.com.uk to see if your policy qualifies for cashback. Be sure you double check to make sure the policy you want is one that offers the best cover and don’t opt for cover based solely on cashback possibilities.

Pay annually

Every time choose to pay for insurance on a monthly basis, you choose to pay more. Yes, it seems convenient to pay out each month, but it’s costing you more and what it would if you paid the sum in full. You could earn a 10pc discount, plus save the monthly fee you pay – saving you more than £100 on a £1000 policy.

Don’t modify your car

Modifications to your car can cost you more with car cover. So, stay away from them. Unless, your going to modify with security immobiliser or anti-theft equipment.

Install a Black Box

A “Black Box” is a GPS tracking system that allows your car to be recovered if stolen, clocks your mileage, speeds and when you drive. Covering your car with a black box policy can save you around £600 on your policy. To have the black box installed is free for most carriers, but you have to do it within a few weeks of taking up the policy.

The AA and The Co-Operative Insurers are the top black box policy carriers available, but there are smaller competitors out there. Compare coverage to see who has the best savings for the policy you need.

Or try Aviva’s free RateMyDrive app to help you earn up to 20% off your premium, if you’re paying over £400 for your cover. The app works like the black box and is currently being tested on Aviva employees as of the writing of this guide.

With over 200,000 motors insured with the telematic insurance, more and more people are taking advantage of the discounts this technology offers.

Buying Guide

Which comparison sites to use

There are loads of sites out there for comparing prices for cover, but understand that quotes need to be verified with the insurance company before signing, as companies take much more into consideration than just the info you enter into a website when you’re shopping around.

  1. Confused.com
  2. Moneysupermarket.com
  3. Gocompare.com
  4. Q4.com

Whether you choose one of these sites to compare with or another, there are several things to remember when you get your quote.

  1. Know the registration number of your car – Not every site will require this information, so be aware that those that are asking for it will likely give you a more accurate quote than a site that just asking for your car make.
  2. Know how far you travel each year – If you’re an excessive driver, you’ll likely pay a bit more. But be prepared before getting your quote, so you can get more accurate numbers.
  3. Know what your car is worth – Car cover is often based on how much your car is worth, since they may need to consider replacing it. Try Parker’s Car Valuation for an estimated quote on your car’s value.
  4. Where will you park? – Cars parked in garages often take a lower premium as they’re “safer” than on the street. However, some policies have even gone down when they started parking on the street. The best course of action is to clarify with the insurance company what’s best and do it.
  5. Have you modified your car – Unless you’ve fitted it with some security device, you’ll pay more for cars that are modified after purchase. But, if you bought your car with jet packs installed by the factory, then you’re good to go (although a car like that will still cost you more since it falls in a higher insurance category).

Try an Insurance Broker

Don’t stop with an online search. Cut out a chunk of time and dedicate it to checking around with brokers and local companies, too. Online can only do so much when shopping for insurance because their are so many variables at play from the driver’s age, whether or not there will be another person on the cover, what kind of car and its history is being covered.

You can search for a local insurance broker on the British Insurance Brokers’ Association’s website.

And in-person negotiations can be done more aggressively.

Once you’ve compared prices, get busy negotiating for the policy you want – or the policy you already have. Negotiations can save you hundreds!

Be relentless in your search before committing to one policy.


Steps to Maximum Savings on Your Car Insurance:

  1. Be a safe driver
  2. Drive a low category car
  3. Know what kind of policy will serve you best – do you really need a comprehensive policy?
  4. Try adding a female driver to your policy
  5. Consider a multi-car policy it might well be cheaper
  6. Park on a drive or in a garage overnight
  7. Increase your excess
  8. Drive less miles and tell the insurance you are doing so
  9. Get a Black Box
  10. Complete the pass plus course
  11. Compare prices (online and off!)
  12. Use a cashback site if you buy online
  13. Negotiate for lower premiums
  14. Pay it all at once

There you go, UK! Get Happier! Now, go and save on your car cover today!

Ultimate Guide to Cheap Car Insurance, 4.3 out of 5 based on 3 ratings

  • GSi

    One thing you need to watch out for when shopping for car Insurance is the companies do a credit search on you before taking the policy out ;)

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