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Low Cost Car Insurance

Reduce your risk, reduce your cost
Every application for car insurance is different. Each insurer's price depend on two things, first the underwriters assessment of your particular risk focus and then the pricing model which dictates what type of customers the insurer wants to attract.

Therefore by reducing an insurer's perception of your risk you can reduce the price you'll pay. There are of course many factors you either can't change or can't change easily ... age, gender, where you live and driving history. Yet there are things you can have control over:

• Park carefully. Theft and accidental damage add a bulk to insurance costs. If you leave your car in a garage or driveway it's a big deterrent to theft and means accidental damage is less likely, resulting in a 3% - 7% drop in insurance costs
• Define your job carefully. In a multi-skilled world many people can define themselves as a number of things. Different jobs carry different associated risks, so when getting a quote, it's worth trying to see whether changing your job description affects the price. For example you could be an office worker, secretary or PA. If you're wondering whether you can legally call yourself something, the correct way to look at it is 'would a reasonable person say that this description fits my job', if you're pushing it, don't do it.
• Fit a security device. Any extra security will help, fitting an alarm or immobilizer (especially one approved by Thatcham) will reduce the bill substantially.
• Don't modify your car. The more changes you make to your car, barring security ones, the more you'll be charged.
• Reduce your mileage. The less you drive, the cheaper your insurance will be. Where possible try and reduce your mileage. This may sound trite, but actually the real key is incorporating the extra insurance cost when you make long journeys not just the cost of petrol compared to taking the bus or train.

Tips and tricks for lowering car insurance costs

If you're trying to find the lowest price, there are a few more things to watch out for. Car insurance marketing is clever. Its aim is to make you feel you're getting the best deal but to maximise the insurer's profit at the same time.

• Get a 'new' quote from your existing insurer. Often applying to your existing insurer as a new customer produces a cheaper price than its renewal quote. Insurers put out more competitive prices to attract new customers so simply start again and you could be better off.
• Consider how much you'd really claim for? It's worth considering going for a policy with a higher excess (the amount of any claim you need to pay yourself). Many people will find that claiming for less than £500 worth of damage both increases the future cost of insurance and can invalidate no-claims bonuses, meaning it's not always worth making a claim.
• So why pay extra for a lower excess? A few policies will substantially reduce premiums for a £1,000 excess, so try this when getting quotes. Of course the one downside with this is if you have a bigger claim you'll have to shell out more, but often it's a good balance of the risks.
• Drive someone else's car on your insurance. If you have fully comprehensive insurance then often, although not always, it includes what's called 'driving other cars' cover. This provides you with Third Party cover whilst reducing your mileage and therefore the cost of your own policy.
• New car, free insurance. Buy a new car and it may include free insurance for a few years. While this is only worth a few hundred a year to an experienced driver, to a young car owner it could be worth thousands and is well worth taking into account when you add up overall costs
• Gender-specific isn't always best. Some insurers advertise cheaper prices for women because they're a lower risk. Yet, just because an insurer offers a special price doesn't automatically make it cheaper than unisex insurance elsewhere. All insurers use risk-based price assessments so this is factored in anyway.
  Latest News - 6th March 2011 European ruling now makes it illegal for gender to become a reason for low cost insurance

Extra tips for no claimers

• No-claims discounts don't necessarily reduce the premium. For every year you don't claim on the insurance policy you get a discount. This makes a substantial difference to the overall cost. If you do claim it's usually two years off this discount. This is deliberate to encourage people not to claim. You can also get a protected no-claims discount so that claims don't impact it.
• Try to keep your no-claims if switching from a company car to a private car. If you have a no-claims bonus from driving a company car and try to find private insurance online, you'll find neither insurer nor broker will allow your previous no-claims bonus to count.

Yet if you phone up most companies will give some form of 'introductory or special bonus' to those switching to a private car. This is because these discounts are often applied manually as the online systems don't automatically allow a discount. There are also discounts available with brokers and some insurers like Norwich Union* and Admiral*, Elephant* and Diamond* where second cars for existing policyholders can attract introductory bonuses, but again these are call-centre not internet-based.

The overall tactic I would suggest is first of all use the Cheapest Car Insurance four-step plan to establish your risk factor ' then call the top three (or possibly five) providers listed and discuss this no-claims company issue.

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