Six ways to save money on your car insurance

The rise in Insurance Premium Tax (IPT) is said to be driving up the cost of car insurance, but there are a few ways motorists can save money on their car insurance.

In October 2016, the government will increase IPT to 10%, which is set to raise an extra £700m to be put towards flood defences. According to the AA, this increase will add more than £20 to the average comprehensive premium.

Hands shielding a car to signify car insurance

However, if you are looking at selling your car and insuring a new vehicle or renewing your expired policy, there are a few ways for you to save some money which we have looked at below:

Car modifications

Adding modifications to your car can greatly affect your insurance premiums, even if it something as small as changing your alloy wheels or tinting the windows. Adding a spoiler could raise the cost of your insurance by £91, so if you are going to make modifications, consider them carefully.

Don’t overestimate your mileage

When it comes to selecting your annual mileage, try to be as specific as possible and don’t overestimate how much you drive. Motorists who drive £10,000 miles a year pay £31 more on average than those driving 5,000.

Excess

All policies have an excess, and setting a higher voluntary excess can lower premiums. Setting your voluntary excess at £500 rather than £0 can save you an average of £117. However, it is important to set your excess at a price that you can afford to pay, should you ever need to.

Employment status

If you are retired or a homemaker, it is important you say this rather than stating you are unemployed. Unemployed drivers paid £135 more on average than those who are in full time employment.

Comprehensive cover

Comprehensive cover is often thought as being more expensive than other cover. However, comprehensive was found to be £156 cheaper than third party, fire and theft on average. This is because third party, fire and theft is more often bought by younger drivers, who are statistically more likely to be involved in an accident.

Family and friends can lower premiums

If multiple people are driving your car, be sure to add them as named drivers, especially if they are experienced drivers. A 50-year-old driver with a clean record can save you £58 on average, so if an experienced driving is going to use your car, add them to the policy.

 

Photos courtesy of Pictures of Money on Flickr, under Creative Commons