How to beat rising car insurance costs

How to beat rising car insurance costs

Annual car insurance bills are 7.5% higher than a year ago and cost an average of £740 a year, according to new analysis, but there are steps motorists can take to reduce costs.

Prices are rising fastest in Scotland at 12.6% a year, research by market research company Consumer Intelligence found, while drivers in the North West of England are seeing the lowest annual price rises at 2.8%. Average annual premiums are highest in the capital at £1,041 while Welsh drivers pay nearly half this at £557.

John Blevins, Consumer Intelligence pricing expert said: “The big driver for car insurance, is claims experience and costs with the biggest impact being felt in major urban areas where crime rates are higher.”

The latest Insurance Price Index from the British Insurance Brokers’ Association (BIBA) and Acturis that tracks £6 billion of actual premiums paid annually via insurance brokers before Insurance Premium Tax (IPT) shows that premiums for all types of motor insurance increased dramatically in the final quarter of 2017.

The Index found that premiums for car drivers rose consistently through 2017, increasing by 10.7% in the final three months of the year compared to the same period the previous year, before Insurance Premium Tax was added.

Ways to reduce the cost of cover

If you’re looking to cut down on your car insurance costs, make sure you don’t just automatically accept the renewal quote from your existing insurer. It’s always a good idea to shop around for cover each year as insurers usually reserve their keenest quotes for new customers.

Another way to reduce your premiums is to increase your voluntary excess, which is the amount you pay the insurer in the event of a claim. Make sure it remains affordable though, otherwise you might struggle to pay it.

Younger drivers often cut the cost of motor cover by adding an older more experienced named driver to their policy. However, you mustn’t put them down as the main driver as this is known as ‘fronting’ and is not only illegal but will invalidate your cover if you’re found out.

Even something as simple as making sure you enter the correct details when applying for cover can make a difference. For example, if you overestimate your mileage, you’ll be paying for miles you aren’t actually using.

Think carefully about which optional extras you genuinely need too. For example, if you’ve got another car you might not need a courtesy car as part of your policy.

Boosting your security with insurer-approved security equipment like an immobiliser or a steering wheel lock could also bring down the cost of your premiums, as could keeping your car in a garage, if you have access to one.

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