Hacks for saving money on your car insurance
Rules making insurance prices clearer for consumers
In April 2018 new rules came into force for insurers. These rules mean that insurers must provide the cost of the previous year as well as the renewal. This way it is clearer for consumers to see just how big the hike is.
The Association of British Insurers (ABI) and the British Insurance Brokers’ Association (BIBA) have published new Guiding Principles and Action Points for members to ensure customers who don’t switch every year are offered a fairer deal. However, does this go far enough?
Vunerable customers and insurance
Vulnerable customers in particular are still likely to be hit. Those who don’t have Internet access, those who don’t know they can switch etc. Will they continue to accept the hike? More needs to be done to educate consumers that they can switch. And more needs to be done to make insurers reward loyalty. As I’ve said many times about other sectors, telecoms in particular, it needs a company to take a risk for a couple of years. Say it will invest in customer service, training and take a hit by not hiking prices and gain the loyalty and spread the message through word of mouth (and social media etc!)
The ABI and BIBA has said it wants members to provide all the information about switching in their correspondence but will it happen? They need to do more to encourage companies to do right by their customers.
Don’t auto renew your insurance
Most people still aren’t aware that they should not just let their car insurance renew. Just like house and buildings every year, it is rare that your renewal will be cheaper than starting afresh. I have just taken out my car insurance, and, (after recovering from the jaw drop of seeing how much my car has gone down in value!) thought I’d give you some figures just to show you the importance of shopping around and not just using comparison websites. These are all quotes from today 11th October 2017.
|1st Central renewal quote||£505.00|
|1st Central renewal online chat||£490.00 (when stopping auto renewal online chat)|
|1st Central direct on website||£473.95|
|Moneysupermarket.com (1st Central cheapest)||£503.31|
|Confused.com (AA cheapest)||£393.91|
|Comparethemeerkat (MoreThan cheapest)||£385.12|
|MoreThan direct on website||£382.28|
|AA direct on website||£348.31|
|AA through Topcashback||£348.31 (minus £40 paid to Topcashback account)|
A saving of £196.69 (39%) of the renewal price. It is such a boring way to spend half an hour of your life, it really is! But! How can you not do it when it saves this sort of money?
Update 28/05/21 FCA stops insurance companies’ loyalty penalty Insurance companies will no longer be allowed to auto renew at a higher cost than it would be for a new customer. However, see the article you can still get cheaper!
Cashback on insurance
Topcashback* is a great cashback site. Go there before buying anything. Sign up and whenever you shop check Topcashback first. If the store is listed click on the link and get cashback. Don’t rely on this though as there may be terms and conditions that you miss (such as using vouchers) negating the cashback. Other big cashback sites include Kidstart* (where the cashback goes to your nominated child’s bank account), Quidco* and Free fivers*. Others that I’ve not used are Imutual, Give or take and there are others. It is worth signing up to a few as they all have different traders, % cashback and offers on at various times. Time consuming but worth it more often than not! £40 for taking an extra five minutes is quite a nice hourly rate (if only I could do it all hours!)
17 top tips for saving money on motor insurance
- Last year, using a cashback site wasn’t cheaper, somehow in the system it knew! So don’t think that after getting your cheapest quote you always get the cashback from the same price. Clear your cookies which may help!
- Don’t completely disregard your renewal quote as most companies are nearly always open to haggling. I’ve yet to hear of anyone failing when they do this.
- I only went direct to the cheapest offer on each of the comparison websites
- Some providers are only able to produce a certain number of quotations per customer, and after the limit has been reached, they will no longer be able to produce quotations online on some sites so don’t make hundreds of tweaks!
- Bizarre as it may sound, it can be cheaper to add someone to your policy. Particularly useful for a first year or a young driver, if they add a more experienced driver it can bring the average down whilst helping the main driver build up no claims.
- You can always try changing your job title. I’ve heard of people getting cheaper quotes when changing “builder” to “construction” etc., but to be perfectly honest I’ve never seen a difference and of course it does still have to describe the job! But it may work with some insurers so do try it.
- Save your details on the comparison websites so if you keep the car you don’t have to waste your time filling it all out again.
- When researching for insurance for learner drivers get an idea fir how much it will go up when they pass their test!
- It is possible to get a discount for multi car cover, even when renewals are at different dates. But really watch out for the renewal quotes! Some may give a discount for a second car.
- Make sure you are on the electoral roll. Some companies use it to check for ID purposes to reduce fraud, if they can’t find you they may not give a quote
- Look at deals that may work out cheaper if you switch your contents and building insurance same provider and visa versa.
- Check the additional add ons. Do you already have breakdown cover, is something already covered by your bank, travel or house insurance? And can you get them cheaper elsewhere. I use Tesco clubcard points for RAC cover for example.
- Pay up front rather than in instalments if you can as this is always cheaper.
- Adding a more experienced driver to your policy can reduce the premium.
- Check the excess, think about how much you could afford to pay and go with that, the difference between £50 and £100 excess can reduce the amount significantly.
- Don’t leave until the last minute, compare prices about 3 weeks before the renewal date and make sure you cancel any auto renewal! The price increases the nearer to the renewal date.
- Third party isn’t always the cheapest, so check fully comprehensive too. Some insurers will assess you as a safer driver for doing so.
Bonus tips for saving money on your car insurance!
After doing the quote and post I asked some fellow money bloggers for tips that I hadn’t thought of and now I wonder if I could have got it reduced even further!
Katy from KatyKicker wrote about saving money on insurance and provides lots of tips, one being a really really good point! Check the policy! When you go through comparison websites check like for like, windscreen cover, legal cover, replacement car etc. And consider asking your current provider for a loyalty discount rather than just quoting competitors’ prices.
I never go for all the legal cover. But Emma from TheMoneyWhisperer has written about how to get free legal protection from Freemotorlegal and I’ve just signed up! Then Lee from Freemotorlegal wrote a guest post Why Motor Legal Protection is a rip off and the free alternative
Emily from A Thrify Fox says she had an automated email thingy from confused.com telling her that Admiral was the cheapest for her.
Now this is a little known secret and is brilliant! Emma from Mumssavvysavings wrote a post about Reducing the cost of learning to drive. In it she says that she got insurance from a company that they pay for 28 days of insurance and it is only used on any days they choose within three months. Superb!
Further links and resources
Do Morethan just comparison websites for insurance quotes! A couple of years ago I picked up on the differences in prices between a standard quote and a quote going through a cashback site…. I complained, obviously. No laws broken but still got the refund of the difference 🙂 Also just double check the quotes. Sometimes the cheapest quote is for 10 months!
If you need help with a complaint re insurance or anything else see Top 20 Tips How to Complain!
For much more advice, guidance, templates, consumer laws and information GET THE BOOK! How To Complain: The ESSENTIAL Consumer Guide to Getting REFUNDS, Redress and RESULTS!
Loyalty penalty to stop announced 28/01/21
* referral links