The cost of running a car is higher than you think - road tax, fuel or EV charging, insurance, servicing, maintenance, parking and road charges all add up.
You can save money on most of those costs, including car insurance, which is an average of £729 per annum, according to the latest data from Compare the Market.
The good news is that insurance costs are gradually starting to fall, but it's still a large amount to find every year - especially if you're a young, less experienced driver or you drive a more expensive car.
© GettyInsurance companies take into account a wide variety of factors when calculating premiums, and the amount quoted is influenced by some factors beyond your control, such as age, location, gender and occupation.
Thankfully, there’s still plenty you can do to bring down the cost of car insurance. Here are our Top 12 tips for reducing your annual premium.
1. Shop around for cheaper quotes
One of the best ways to save money on motor insurance is by shopping around and comparing quotes from different insurers. It's possible to make savings of hundreds of pounds if you use comparison sites such as Confused.com, Go.Compare, Uswitch and Compare the Market before renewing your cover.
Armed with your new quote, go back to your existing insurer and give them the opportunity to match it. If they can't, then it's a no-brainer if it's from a reputable company and the same level of cover is on offer.
2. Steer clear of auto-renewal
Unless you have specifically asked otherwise, it's more than likely that your car insurance policy will automatically renew. Simply letting your insurance renew may seem like an easy option, but it means you’re not getting the best deal available.
Make a note of your policy’s renewal date and start searching for quotes well in advance. According to Money Saving Expert Martin Lewis, the best time to get quotes is between 18 to 28 days before you want the new policy to start - and 26 days is the "sweet spot".
© Getty3. Keep your driving licence clean
Drive sensibly and obey the rules of the road. The safer you are as a driver, the lower your car insurance. If you get caught speeding or commit some other motoring offence, penalty points will be added to your licence and insurers are likely to charge you more for your policy.
4. Add an experienced driver to your policy
Sometimes, adding another driver to your car insurance policy can help bring your premiums down - especially if you're younger. Consider adding a parent or partner as a named driver, as long as they have a good driving history and clean licence. However, only add another driver to your policy if they’re going to use your car.
5. Protect your no-claims discount
If you don’t make a claim on your car insurance, you’ll be rewarded at renewal with a no-claims bonus, also known as a no-claims discount (NCD). The more years you drive without making a claim, the bigger the discount on your premium. If you have minor damage, it could be cheaper to pay for the repairs yourself, rather than making a claim and losing your valuable NCD.
That said, you must notify your insurance provider of any accident, even if it’s minor, and that you’re covering the cost yourself.
© Getty6. Consider a higher excess
Voluntary excess is the amount you agree to pay towards the cost of a claim before your insurance covers the rest. If you are willing to increase your excess, this can help reduce your premium. However, it's really important to make sure you can afford to pay the total excess, should you need to claim.
7. Bundle up your car and home insurance
Some insurance providers also offer discounts if you package your car and home insurance together. These policies also simplify things because you will have a single renewal date and all-in-one payments. If you'd rather keep things separate, then consider a multi-car insurance policy if you have more than one car in your household. Multi-car policies should work out cheaper than individual policies.
8. Choose the correct mileage
It stands to reason that the fewer miles your drive, the less time you're on the road, which means there are fewer chances of you having an accident. A lower annual mileage can help keep insurance costs down, so don't just round up to 10,000 miles, if you only do 6,000 miles a year.
Check your previous MOTs or service receipts for your average yearly mileage and declare a more accurate mileage with a smaller buffer. However, you must be honest about your annual mileage, because an inaccuracy could invalidate a claim.
9. Think carefully about your job title
Insurance experts at Quotezone say the wording of specific job titles can often affect the overall premium price. Surprisingly, healthcare assistants, warehouse workers and chefs face some of the steepest car insurance premiums in the UK. Working in hospitals, care homes and clinics, healthcare assistants work long shifts with high levels of stress, and they might have to travel between different healthcare settings.
Quotezone suggests trying "Care Worker" or "Care Assistant", instead of "Healthcare Assistant", as a job title. Remember, you must be honest about your job title and ensure that the one you choose accurately reflects your occupation.
10. Pay upfront
When you take out a new car insurance policy, you're likely to be given the option to pay for the whole year upfront or pay a monthly premium. Paying monthly instalments is a great way to spread the cost, but it can mean paying interest on the full amount. Double-check whether interest is added when paying monthly. If so, and you can pay the whole amount upfront, it will save you money in the long run.
© Toyota11. Choose a cheaper car to insure
The car you drive will have a big impact on your insurance. Broadly speaking, the smaller the car, the smaller the engine and the more safety features, the lower the insurance group, and the cheaper the insurance. Before buying a car, check which insurance group it is (1 to 50). For example, a little Toyota Aygo X is Group 5 or 6, while a Volkswagen Golf GTI is likely to be Group 32.
12. Consider a 'black box' policy
A telematics or 'black box' motor insurance policy involves installing a tiny device in your car that monitors your driving habits. It is designed to reward those who drive carefully.
These policies tend to be aimed towards younger motorists, because they give them the opportunity to reduce their high premiums. Telematics devices monitor your speed, how aggressively you accelerate and brake, and whether you are on the road at "dangerous" times (eg the early hours of the morning).
