Drive down car insurance costs this Spring

Friday, April 24, 2009

Category: Personal Finance Tips

Spring has sprung and as many of us prepare to spring-clean our finances, esure has offered tips on how to go about reducing the cost of car insurance premiums.

1. Do not over-estimate your annual mileage.  The more time spent on the road, the greater the chance of being involved in an accident.  Therefore to avoid overpaying, avoid over-estimating.  According to esure’s in-house statistics, average mileage fell by almost 5 percent between 2007 and 2008.
2. Do not increase the voluntary excess up to a level that is likely to be too expensive to pay straight away.  The voluntary excess should be affordable; however increasing it by £50 will reduce your overall premium.
3. Add your spouse to the car insurance to benefit from the ‘family factor’, which is cheaper than simply adding a named driver.  It is thought that drivers with a family will tend to behave more responsibly behind the wheel when accompanied by a loved one.
4. Always search the market to ensure that your current insurer’s renewal quote is competitive.  It is possible to shop around online with the help of comparison websites such as gocompare.
5. If you have a garage, use it.  The majority of insurers will offer discounts to motorists that store their car in a garage when it is not in use.  This is because the possibility of theft and vandalism is then significantly reduced.
6. If you fancy a car with lots of mod cons then buy one that has them as standard rather than fitting them yourself as this could increase you insurance premium or make it more difficult to insure.
7. Pay your premium up-front rather than on a monthly basis as the latter effectively means that you have a loan with your insurer.  To avoid this, try setting aside some money each month during the run up to the date on which your car insurance is due.  If this is not feasible then a low rate credit card could be considered as an alternative method of payment.
8. Your initial car insurance outlay could be lowered by downgrading to third party, fire and theft.  However, costs could then spiral in the event of an accident for which you are to blame.
9. Opting out of Motor Legal Protection (MLP) could be cause for regret should an accident occur.  MLP enables policyholders to recover uninsured losses if they are caught up in an accident that is not their fault.  For example, they may wish to pursue compensation for any injuries incurred as a result of being hit from behind.
10. Prior to purchasing a new car, check the insurance group to ensure that it is still insurable and at an affordable price.  Surprisingly, 24 percent of motorists surveyed do not do this, which means they could be faced with increased outgoings.
11. Build up a no claim discount.  This is the best way to reduce your car insurance premium, with many insurers going up to a 70 percent no claim discount.  As this is such a significant saving, it can be worth paying a small additional premium to protect it.  However, the terms and conditions should be read carefully before going ahead.
12. Be sure to match your level of cover with your requirements rather than going for the cheapest option.  For example, if you would like to be able to drive somebody else’s car in an emergency then ensure that you are covered for this eventuality.

Head of Risk and Underwriting at esure car insurance, Mike Pickard, commented: "Now is the perfect time to do some spring cleaning - not just to your home but all aspects of your household finances.  Savings on car insurance premiums are there to be had by shopping around and being smart when it comes to getting a quote.  How you pay, who is on your policy and what excess you choose can all go some way to driving down your premium.

"When motorists shop around for car insurance, price is usually at the top of their minds but having a good quality product is key as well as good value.  If the unexpected does happen, drivers could fall short of some of the policy basics if they don't check their level of cover so it's worth reading the small print and not scrimping where it matters."
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Homeowners that are looking to spring clean their finances may wish to consider taking out a secured loan.  One of many options to consolidate existing debts, this could be ideal for those that are juggling multiple, monthly repayments on loans, credit cards and/or store cards.  A secured loan to consolidate debts could be used to place confusing repayments into just one manageable, potentially lower, monthly repayment. It should be remembered however, that consolidating your debt may increase the amount you pay back overall and extend the repayment periods of your debts.