How To Minimise Motor Insurance Premiums

There are a number of possible ways in which you could do this, the most obvious being to own a car in one of the lowest insurance groups. Typically, this means a newer and perhaps smaller car. But this is only one part of the picture, as insurance companies also use other information, such as the main driver’s age, gender, and driving record.

Your home address may also be a factor, as insurers categorise areas according to their official crime statistics, believing a vehicle more likely to be damaged or stolen if it is kept in one.

Ways in which you might reduce your motor insurance premiums include:

• By avoiding making claims. This builds up a no-claims discount, which increases with the number of claim-free years a policyholder accumulates.
• This no-claims discount can often be transferred between insurance providers, so that a driver can take advantage of a better deal offered elsewhere.
• The existence of a no-claims discount won’t necessarily prevent an insurer from increasing premiums. The discount is applied whatever the level of the premium, so it could increase even if the discount does not change.
• Two separate levels of excess are applied to most motor insurance policies. One is set by the insurer, as an integral part of the policy (usually called the compulsory excess). The second (known as the voluntary excess) is an amount which a driver agrees to pay themselves towards the cost of any claim. A driver can increase this voluntary excess amount, but should be aware that they may be more out of pocket should they need to make a claim.
• Modifying your car, especially if this involves using parts or add-ons not supplied or expressly approved by the manufacturer. You should consult your insurance company before you do this.
• Paying your premium once a year in a single, lump sum. Auto insurance companies treat policyholders who pay by monthly instalments as ‘borrowers’, as effectively they’re being loaned the money to pay for their cover over several months. This can add a significant amount to the overall cost of their motor insurance.

PLEASE NOTE: THIS GUIDE IS FOR INFORMATION PURPOSES ONLY, AND SHOULD NOT BE REGARDED AS SPECIFIC ADVICE.