Cut the cost of car insurance

Caroline Cassidy

Car insurance has gone up across the board recently - but there are still savings to be had. If you're coming up for renewal you'll want to shop around for the best deal...

Car keys on insurance policy
Car keys on insurance policy

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Types of cover
There are three different types of car insurance: third party, third party fire and theft, and fully comprehensive and you'll need to decide which is right for you.

Don't assume that third party insurance will be the low-cost option. Although it offers a lower level of cover than fully comp, it's not always cheaper, so check both. As with any insurance, it pays to read the small print to find out exactly what you are and aren't covered for in the event of a claim – cheap insurance is only good value if it pays out and offers you the level of cover you need.

Third party is the minimum level of cover required by law. It covers you for any damage you may cause to another person's car and offers protection to passengers travelling in your car. If the accident was your fault, you'll have to pay for any repairs as this won't be covered by the insurer.

Third Party Fire and Theft offers the same level of cover with the additional protection should your car be stolen or set on fire.

Fully Comprehensive, as the name suggests, provides the widest level of cover. If you should have an accident and you are at fault, fully comp insurance will allow you to claim for the cost of repairing the car, and cover personal injury costs, as well as those of other drivers.

It also protects against accidental damage and vandalism, and many policies (though not all, so check the small print), will allow you to drive another person's car with their permission with Third Party cover.

Comparison sites
When it comes to finding the best deal, comparison sites are the best place to start. With a little shopping around you could make a considerable saving.

Comparison sites send your details off to a wide number of insurers' and brokers' sites, scraping their data to report back the cheapest options. The top two are and Because they don't compare the exact same sites, it's worth entering your details to both of them. Between them, they compare 145 providers (nearly 80% of the market), so not bad for 15 minutes worth of effort.

Remember that some insurance companies cannot be found on price comparison sites. The two most notable are Aviva and Direct Line. Both companies sometimes have special offers so it's worth checking with them separately.

Smaller comparison sites are trying to win your custom by offering 'quick cash back' if you compare the market with them and go on to buy a policy. The sums on offer aren't much, but are still worth having. For example, beatthatquote have been offering £25 cash back if you go through special links such as:

Go via Simplyswitch and enter the code SIMPLYCAR and you could get £40:

Most providers will offer better deals if you seal the deal over the internet - so always check what you'll save if you book online rather than over the phone.

Tips to reduce your premiums:
- Fit an alarm and immobiliser (ones approved by Thatcham are best)
- Change your excess - the more you are willing to cover yourself the lower your premiums
- Check your mileage - you may be paying for miles you aren't using
- Cut back on optional extras, such as a courtesy car
- If you have a garage use it
- Don't have a garage? Use your drive - it's still preferable to the public highway
- Don't make modifications. If your car has been modified tell your insurer or it could invalidate your cover
- Be specific when entering your details to comparison sites. A slightly inaccurate description could give a misleading picture and increase your payments
- Try tweaking your occupation. Money expert Martin Lewis explains: "Insurers decide prices depending on historic risk assessments, and your occupation plays an important part in this." Try his tool: to see the riskiest jobs and whether tweaking your job description will save you cash
- If you're buying a new car ask about promotional offers. Some companies may offer up to a year's free cover with a new vehicle.
- If you're insuring a classic or American car check to see whether you get a discount if you are part of a special interest club or society.

If you are already covered and leave your deal mid term (but haven't made a claim) you may be able to cancel and get a refund. Some insurers may charge a penalty fee, but even then you may still come out on top if you find a much cheaper offer, so it's worth shopping around.

Do you have any advice on how to lower your premium? Share them in the comments box below...