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How to reduce your insurance bill

Martynn's Tips - insurance cost tips

Martynn Randall is technical editor at Haynes and has been with us for approaching 30 years. He's written more than 60 Haynes publications and has owned more than 85 cars and 60 motorbikes... so far!

Insurance premiums are skyrocketing. It doesn’t matter if you’ve held on to the same car, if you driving record remains unblemished, and you park your car in an armoured garage overnight with a starving Dobermann guarding it, there’s a very good chance your premium will have increased this year. By a lot.

Stories abound of people being asked to pay vastly increased premiums despite having done nothing wrong. The Association of British Insurers cites increased costs for parts, including components and even paint, so it seems like prices aren’t going to fall anytime soon.

So, what can you do about it? Well, while you won’t be able to get your premium down to the level you paid last year, there are plenty of things you can do to keep the increase to a minimum.

Insurance policy

Ways to cut the cost of your insurance policy

1 Increase your excess

Most insurance policies have some sort of compulsory excess figure, which compels you to pay the first, say, £100 of every claim. However, you can also add a voluntary excess figure to this, so if you choose to make this voluntary figure £250, you’re agreeing to pay the first £350 of each claim.

However, by adding this voluntary figure, your annual premium will be reduced, so you need to work out if the lower cost is worth the potential extra expense in the event of a claim.

2 Don’t pay for what you don’t need

When doing your research into a new quote, don’t end up ticking boxes for things you don’t need. For example, some bank accounts, credit cards and even life insurance policies come with breakdown cover as a perk, so don’t end up paying for it as part of your insurance package. All you’ll be doing is shelling out for back-up that you already have.

Indeed, while it’s very easy to tick boxes for add-on products, it can also be worth investigating the cost of purchasing these products separately from your insurance policy. Introductory offers can often mean that you’ll pay less than you would by adding it to a policy.

3 Don’t make modifications

I don’t mean keep your car in good nick. No, what I mean is don’t modify it. If you add huge audio upgrades, wide alloys, a loud exhaust, a lowering kit, and bodywork extensions, then your insurer is going to consider the car a higher risk, because the custom parts will be more expensive to repair.

Not only that, but as well as making the car much cooler to all your friends, you’re also making it much more attractive to thieves, so it’s more likely to get nicked.

Insurance paperwork

4 Watch out for admin charges

These might not appear on your initial quote, but will appear if you accept the policy and need to make some changes further down the line. So, if you end up moving house or your job, and need to let your insurance provider know, then you’ll be charged an administration fee for that.

Some charge £15 or £20 for such a change, which is expensive enough, but others will charge you as much as £50, so it pays to take these into account when choosing a policy. Opting for cover that’s £10 cheaper than a rival, but having to pay twice the amount for a change, could end up costing you in the long run.

5 Compare and contrast

Comparison websites work. They allow you to put in all your details in one go and see the best prices from a range of insurers. And they also allow you to tweak your insurance policy needs in an instant, and come up with more prices, so you can see exactly how you can minimise the price increase of your policy.

6 Fit extra security kit

If you have a dashcam, let your insurance company know. And if you have additional security kit, such as a steering lock, then you could save money if you let them know.

However, if your car is stolen and you haven’t fitted that security kit, your insurance company might have grounds to refuse paying out, so if you mention it, use it.

A steering lock could cut the cost of your car insurance

7 Pay up in one go

It’s often cheaper to pay for your annual premium in one hit, when it’s due.

There are often interest charges applied if you pay your premium in instalment, because the finance company is, in effect, giving you a loan, so it will cost you more in the long run.

8 Lower miles, lower price

Unless you tell your insurance company, it will assume you do an average annual mileage of around 8,000 miles per year. But if you only cover around 3000 miles per year, you’re actually paying for 5000 miles you’ll never do.

So, let your insurance company an accurate assessment of how many miles you’ll do each year, because this will reduce your premium. However, make sure you’re truthful about this, because if you do lot more miles than you’ve suggested, then your cover could be invalidated.