How to reduce your car insurance premium

image of a woman paying her car insurance bills

It’s a legal requirement to have car insurance.

However, this doesn’t mean you have to pay over the odds. Everything from your driving style and vehicle choice to your insurance policy and no claims history can impact what you pay.

As insurance experts – we know what influences your insurance, why it happens and how you can avoid it.

Nine ways to reduce your car insurance

1. Pick a low insurance group model

Cars are categorised by risk and assigned to something called an insurance group which influences your insurance premium cost. The lower the group, the cheaper the insurance premium.

There are a few factors that influence a car’s insurance group:

  • Average repair costs
  • Likelihood of damage
  • Car value
  • Performance
  • Part price
  • Safety
  • Security

For example, the higher value your car, the more expensive it is to fix, therefore increasing your premium cost.

Different versions of the same car can also influence premium cost. A sports version of the same model may be costlier to insure than the estate version, simply because it’s more likely to be driven in a riskier way.

Calculating insurance groups is complex, and a lot of thought, analysis and data go into it. You can find out more about car insurance groups in our car insurance groups guide.

2. Talk to your insurer

If your situation changes that could change your policy, tell your insurer as it may change your premium cost. This doesn’t always mean you’ll pay more.

For example, if you move home, your new postcode might reduce your risk category and bring your price down.

Sometimes, a quick chat with your insurer means getting you the right policy, which can get you cheaper, better cover.

Find out what you need to tell your insurance company.

3. Protect your no claims bonus

A no claims bonus (NCB) is a discount that’s applied to an insurance policy based on the number of consecutive years you’ve gone without making a claim.

You can build your NCB for up to 15 years, which gives you a significant discount. There are a few different ways to protect your NCB, check out our detailed guide on how to utilise your no claims bonus.

4. Be accurate about your mileage

Avoid overestimating how many miles you tell your insurer you drive as mileage impacts your insurance premium.

If you drive significantly fewer miles than stated, but don’t tell your insurer, you won’t benefit from a potentially lower premium cost.

However, remember that you must be honest and update your policy if you’re likely to drive more than your stated amount. Not telling your insurer can invalidate your insurance.

5. Pick the right cover

Make sure you have the right car insurance cover for your circumstance and budget.

Insurers offer multiple tiers for a reason, so avoid paying for cover you’re not using by reading over each tier option. If in doubt, call your insurer to check which level of cover is right for you.

6. Pay annually

Most monthly car insurance premiums have interest included in the price, making them more expensive than annual costs.

If you can, pay annually.

7. Increase your voluntary excess

Choosing higher excess will reduce your car insurance premium. However, make sure you can pay this excess if you need to repair your motor when claiming.

8. Take security seriously

Car thefts are unfortunately common, and thefts will impact your car insurance down the line.

Using security devices can help secure your car, plus the peace of mind is valuable.

If you’re not sure what security to prioritise, then read our guide: 10 of the best new safety features in cars

9. Consider telematics

Telematics can help drive down your insurance premium. The most well-known telematics device is a black box, but others exist.

Instead of estimating, telematics devices give real data that impacts your insurance premium. By sticking to a speed or mileage limit, you can bring down your payment. 

You can’t control every factor

There are factors that can influence your premium that are out of your control.

For example, on average, women typically pay less for their car insurance than men, despite insurance providers not discriminating based on gender.

Other factors like occupation, location and age can influence your premium. It’s important to keep this in mind when figuring out how to reduce your car insurance cost.

We update our Car Insurance Pricing Index monthly to show you the cheapest cars to insure depending on where you live, how old you are and other lifestyle factors.

Great car insurance options for the whole family