UK HOUSEHOLDS should pay their annual car insurance premium in advance to save as much money as possible.
According to data from comparison site comparethemarket.com, customers could save up to £59 each year by paying their annual car insurance premiums in one lump sum instead of making regular monthly payments.
He said the average cost of car insurance paid monthly is currently £752 – but that drops to £693 if you can afford to pay for a year up front, a savings of almost £60.
The reason it’s more expensive to pay in monthly installments is that you’re paying interest on the full amount because it’s actually a type of loan.
The cost of car insurance has increased in recent months due to soaring used car prices and shortages of reimbursed parts.
That means it’s more important than ever to cut costs where you can.
Alex Hasty, director of comparethemarket.com, said: “As the cost of living and bills continue to rise, many families across the UK are feeling financially squeezed.
“While it may seem easier to make small monthly payments, if you’re able to pay for your car insurance policy annually, it could lead to some useful savings.”
There are other ways to lower your car insurance premium.
Shop around and don’t auto-renew
Renewal quotes will rarely be the best deal, so it’s best to search annually.
Don’t try just one comparison website, as each will offer different deals.
The main companies are Confused.com, Compare The Market, MoneySupermarket and Gocompare.
According to MoneySavingExpert, the best time to get a quote is 23 days before the policy starts.
You could save up to £504 by following the so-called 23-day rule.
Adjust your job title
Adjusting your job title could save you hundreds on the price of your policy.
For example, saying you work on software rather than computer games can save you £100.
But don’t lie about your job because it could invalidate your insurance if you have to make a claim.
Add an experienced driver to your policy
It may seem counter-intuitive, but adding another person to your policy can cut costs.
A young driver, for example, may see their premiums drop if they add a parent as a named driver.
Make sure the main driver of the policy is the one that drives it most often – otherwise it’s called ‘fronting’, an illegal practice that could land you a hefty fine.
Use cashback sites
Quidco and TopCashback can earn you money when you take out a policy.
It is always worth checking to see if any offers are available.
You will need to click on the insurer or the comparison website from the cashback site to be eligible.
When we checked, you could get up to £36 cashback from GoCompare if you went through Topcashback, and up to £33 through MoneySuperMarket.
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