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How to save on your car insurance as costs rise to their highest level in two years

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Car insurance costs are at their highest in nearly two years after the biggest price increase since the pandemic, new data has revealed.

The average cost of car insurance is now £554 on average, with drivers seeing an increase of £32 – the equivalent of 6% – compared to the same period last year, according to Confused.com , powered by WTW, which bases the search on six million citations each quarter.

This report shows that prices have risen this year and have risen by £25 over the past six months.

It comes at a time when the cost of living is rising across the board, with energy, food and fuel driving up household spending.

However, there are ways for consumers to reduce their costs.

Louise O’Shea, CEO of Confused.com, said: “With millions stung by the current cost of living, it can be disheartening to see that car insurance prices are also on the rise.

“As we are all still adjusting to life after the lockdown, it is likely that this is due to the number of insurance claims increasing as we get back to some sort of routine. Unfortunately, this means that you may notice – be a price increase when renewing or purchasing your car insurance.

“As prices rise, we know auto insurance is one area where you can still save money, which will help balance price increases in other areas.”

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How to save on your insurance

The experts at Confused.com and Go Compare reveal how you can save money on your car insurance.

Don’t let your policy renew automatically: A separate survey of 2,000 UK drivers by Confused.com found that 45% of those who received their renewals last quarter saw their price increase by an average of £41.

Instead, those who shopped around after receiving a more expensive renewal price saved £54, on average, after using a price comparison website and switching insurers.

Recent changes from the Financial Conduct Authority do not always mean a cheaper or similar renewal price, as any increase in average UK car insurance costs will be reflected in renewal premiums.

It is likely that prices will continue to rise as motorists spend more time on the road, meaning the likelihood of claims will also increase.

Compare the prices: Using price comparison sites and researching your policy is one of the best ways to save on your car insurance.

As soon as your renewal date approaches, take the time to do some comparison shopping online and see how the price compares to your renewal.

You can even use the prices you find to haggle with your current supplier.

Annual payments: One option for drivers to save money on their insurance is to choose annual payments. While monthly direct debits may be the most convenient option, paying an annual cost upfront could save drivers an additional 10% when taking out a new policy.

Improve security: Simple things like installing alarms, immobilizers and locking wheel nuts could lower your premium, but it’s important to consider whether the money spent on these security measures is cheaper than the money you would save on your car insurance.

Pay attention to add-ons and see if it’s cheaper to buy them as separate products: Auto insurance top-ups can include things like key cover, legal assistance, breakdown cover, courtesy car cover, personal accident cover, windshield cover and the protected no-claims bonus.

Consider if you really need these add-ons in the first place, for example, do you already have breakdown cover in place? If you feel you need them, shop around to see if you can get them separately for less than the cost of a car insurance package.

Pay attention to additional drivers on your policy: Adding an extra driver to your policy can lower your premiums, if they’re experienced, or raise them if they’ve just passed their test.

But it is imperative that you always be honest about the identity of the main driver of the car, as failure to do so is called fronting and is illegal, and it could also invalidate your cover.

Consider a telematics policy: A telematics (black box) policy helps you tailor your insurance costs based on how, when and how long you travel.

There might be certain restrictions on how you use your car with a black box, for example, curfews or mileage caps. But if you prove you’re a safe, sensible driver, you could see your costs go down.

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