3 min read
13th December 2018

What Affects Your Car Insurance Premiums?

What Affects Your Car Insurance Premiums?

The cost of car insurance can vary widely, but it is a non-negotiable cost if you want to drive; as the law requires you to have at least “Third Party” insurance to drive a car on the UK roads.

Below we will list the main points that help determine your insurance cost so that you can understand how the
premium is made up to enable you to get the best deal for your car insurance.

Your car insurance premium depends on:

  • Your car: Cheaper premiums are available for some cars, not just because they are cheaper to replace, but also because they are statistically less likely to be involved in an accident. What are the cheapest cars to insure?
  • Age: For example, younger drivers typically pay higher premiums, because this demographic tends to get in more accidents.
  • Address: London, Manchester and Bradford are the worst areas in Britain for vandalism, car crime and road safety – with a staggering 1 in 3 Londoners having suffered car vandalism while parked up in their home area. Click here to read more
  • Your driving record: If you have a poor driving history (accidents/penalty points), this will affect your premium and you may be best looking for a specialist insurer. To compare quotes for major or minor convictions, from DR10 to SP30 convictions please click here
  • When you drive: The times you drive can also affect your premium. Driving late at night or to and from work, can also bump up your insurance costs, so if you don’t use your car to commute ensure you tell insurers before they issue a quote.
  • Usage: Check you have estimated the correct annual mileage – you can now find the previous year’s mileage on MOT certificates if you don’t want to track your weekly usage to project it forward for the year. Important: Never lie about your mileage in order to get cheaper insurance, if you make a claim and your mileage doesn’t match, your insurer may not pay out.
  • Car modifications: Car modifications of any kind could result in a premium increase.
  • Optional extras

How can you reduce your car insurance premium?

  • Check your policy excesses. Most policies will have two separate excess amounts.
    1. Compulsory excess: This is set by the insurer and is part of the policy.
    2. Voluntary excess: This is one that the driver may set themselves which is in addition to the compulsory excess. This normally results in a reduced premium to the driver as the excess would now be higher if a claim is made. For example, if the Compulsory excess is £100 and you set the voluntary excess at £250 then the insurer would not pay any claims unless they were over £350. Meaning you as the insured are responsible for the first £350 of any claim.
  • Don’t make any car modifications: Car modifications of any kind could result in a premium increase, so it may be good idea for a driver to check with their insurer before adding any modifications to their car.
  • Breakdown: Check comparison sites to see if you can get the breakdown covercheaper as a separate policy . Also check if you have cover for this elsewhere, some bank accounts automatically include breakdown cover for your car.
  • Be a good driver: Drivers that avoid making claims may benefit from a no claims discount. The no-claims discount may often be transferred to a new insurance provider if a driver finds a better deal elsewhere.
  • Pay your premium annually rather than monthly: Policies that are paid monthly are normally more expensive as companies charge more for these policies to cover additional costs in administering monthly premiums.
  • Loss key insurance - You can take out a separate insurance for your car keys, which if you lose your keys will not affect your no claims bonus or have an excess to pay. Get a quote for key insurance.
  • Use a comparison site : Compare car insurance quotes or click here to compare quotes from 100+ UK insurance providers in one go.

Via having a panel of providers, you can also compare insurance by clicking the links below for a wide range of vehicles including:

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