With household bills rising, we all need to find ways to reduce our outgoings.
Car insurance premiums are facing a 10 per cent rise due to recent reforms to compensation payouts, and from next month an extra £10 will be added to our bills due to a rise in insurance premium tax. How can we be sure we are paying as little as possible?
Compare
Do not automatically renew your policy with the same company; instead, shop around, being careful to compare like-for-like cover. You might find a cheaper policy but find that you do not have the same level of cover if you make a claim. Use online comparison sites, as they do the work for you; in addition, check Direct Line, Aviva and Admiral, which are not on comparison sites. If you have more than one car, it may be useful checking out the multicar policies with Admiral. It may also be helpful to contact your existing insurer if you are happy with its cover and see whether it can meet any other quotes you have. All insurance companies are very competitive, so do not be afraid to haggle.
Drivers
Only include named drivers who are using the car regularly, as it is easy to add extra people for odd days.
Claims/access
A long no-claims bonus is the best way to reduce your car insurance, but check the definition of protected no-claims. If you increase your voluntary excess, this will reduce your premiums; however, if you have a low-value car, do not allow the excess to get too high.
Security
Make sure your vehicle is always secure by having an alarm, immobiliser and tracking device, which will reduce your premiums by five per cent. You can get a selection of immobilisers and vehicle tracking online from suppliers such as http://www.vehicle-accessories.net/Vehicle-Tracking. If you have a relatively new car, it should have all these extras as standard.
Payment
Pay for your policy up front rather than by direct debit, as this can incur high interest rates.
Youth
Your premium will be affected if you add a young inexperienced driver to your policy, as they will not have any no-claim bonus.
Garage
Insurance companies like you to keep your car in the garage, as it is safe from theft. This will be reflected in your premium.
