For most folk, car insurance premiums represent one of life`s bigger recurring costs. With the current average premium sitting at £736, it`s understandable that people want to get the most from potential savings on their yearly premium. There are plenty of factors that affect your premium, and therefore plenty of ways to save money on your quote. For those looking to maintain a stable budget, this article discusses the five key areas where you can save big on your insurance.
Your history
There are some things that help build your insurance profile — your age, experience and claims history — that you just can`t change.
Everyone knows young drivers face extortionate insurance costs. According to research from Compare the Market`s Young Drivers` Index, the average premium for 17-24-year-olds sits at £1,281 in the first year. Indeed, the more experience you have behind the wheel, the better. But, once you`ve got a year of incident-free driving under your belt, you can start to make savings. A no claims bonus will save you between 30-75% depending on how many years you have on it.
The vehicle itself
Naturally, it`s going to cost more to protect a two litre, turbo-charged hot hatch than a dinky one litre city car. The size, power, age and value of your car will all help dictate premium costs. Insurers bracket all cars into `insurance groups` ranging from one through to 50. You want a car in groups one to three (vehicles like the Volkswagen Up! or a small engine Volkswagen Polo) to get the best deal.
Also, any modifications you make to your vehicle will, by and large, up your premium. Performance improvements and cosmetic changes both add to the risk profile of the vehicle.
Shopping around
Shopping around does more than find you the best price right now. The more people doing their research and pushing for lower premiums, the lower the savings variable in the market. The savings variable monitors the cost gap between the cheapest premium and average premium in the current market. The lower the savings variable, the better competition is in the market, and therefore the likelihood for better prices.
The route to a better savings variable? More people shopping around. As for right now, doing your research will help too. Young drivers who shop around will save an average of £263 off their premiums.
The black box
The rise of telematics is good news on two key fronts: safer driving and lower premiums. A black box attached to your car will monitor speed, braking and cornering in amongst other driving behaviours. Allow an insurer to fit one in your vehicle and you`ll be able to both save money now and even more on renewals, as long as you drive safely.
A `second driver`
A tip for younger people is to name an experienced driver, like a parent, on your premium as a second driver.
One thing to be wary of — some drivers decide to name the senior driver as the primary policy holder and themselves as a secondary driver, even though the reality is actually the other way around. This is known as `fronting` and is illegal.
When all`s said and done, the reality is your insurance premium will always cost more than you`d like to pay. However, by being careful with your driving and making the effort to get the most from your risk profile, you could stand to save hundreds on your yearly costs.