How do I reduce the cost of my car and van insurance?

Car and van insurance is a bill that we just can’t avoid - if you need a car or van you have to insure it. But you don’t have to pay through the nose for it. Here I’ll talk you through some legitimate ways you may be able to reduce your premium but without scrimping on cover.

Car being polished by repairer
Accident repair costs are just one of the factors that influence the premium you pay

#1 Choose the right vehicle


Everyone knows that high performance cars demand high premiums to insure them, but car and van insurance ratings are way more complex than that these days. Consider the following when choosing your next car or van as they could make all the difference when it comes to your quotes for insurance:


1) Stick to UK models rather than grey imports. Imports tend to attract additional excesses, may have age of driver restrictions and might even need additional security like tracking devices.


2) Don‘t have more seats than you need. Yes it might be nice to have room to take all your mates out for the day, but all those extra seats are spaces for more potential claimants for bodily injury.


3) Older cars and vans aren’t always cheaper to insure as newer models are likely to have improved safety features.


4) Don’t buy a modified car or van or modify it after you’ve bought it. Younger drivers will automatically exclude themselves from a big chunk of the insurance market if you have a modified car or van. Having the money to pay for a place of your own is going to earn you more street cred than lowering your suspension and sticking a loud exhaust on your car and paying multiples of thousands of pounds to insure it.


5) Once you've found your ideal car or van, keep it for a while. You've seen the purchase date question when you've had car and van insurance quotes, haven't you? This is used to help build a picture of your experience in driving that vehicle - the more experience you have driving it the better.


#2 Shop around


The ultimate no-brainer. Comparison sites like confused.com and MoneySuperMarket.com were set up for one purpose - to let you compare both cover and price. Don’t forget to also get quotes direct from both big insurers who aren’t on comparison sites like Direct Line and NFU Mutual, but also any company that you have another insurance with, be it another car or your home insurance for example, as you may qualify for existing customer discounts that comparison sites might not trigger for you. Finally, if you’ve signed up to loyalty schemes like Sainsbury’s Nectar and Tesco Clubcard make sure you get direct quotes for Sainsbury's Bank and Tesco Bank car insurance as not only might you qualify for an extra discount but you may get a loyalty points bonus too.


Another top tip is get your quotes as far in advance as you can with the sweet spot being around 3 weeks before your renewal date. Insurers will charge different rates depending on how close your quote date is to the date you want your insurance to start, with the highest premiums often being for cover starting the same or next day. Just remember if you do get your quotes and cover in advance and something changes between now and the start date you'll need to update your policy details.


Young drivers and also those who drive reduced mileage may also benefit from choosing a telematics or 'black box' policy. By installing a device in the car or on your phone that monitors when, where and how you drive your car, you'll often be rewarded for safe or reduced driving by way of premium discounts either up front or at renewal.


#3 Make sure the right person takes out the insurance


There‘s a few things to consider when choosing who should insure the car or van:


1) Normally it’s whoever is the owner and registered keeper. A lot of insurers will treat partners and spouses as interchangeable so you could try getting quotes in both names.


2) Who has the most No Claim Discount available to use on the vehicle? Most insurers won’t let you use No Claim Discount on more than one car or van at a time, though if you have your first or another car or van with an insurer, they might give you a discount in lieu of No Claim Discount, often in the form of a second car or introductory discount.

3) Don’t ‘front’ your cover. Getting your parent to insure your car might be tempting but it can be deemed as fraud and you don’t want the consequences of that to deal with in the event of a claim. The sooner you insure your own car, in your own name, the sooner you'll start building up some all-important No Claim Discount which will pay you back in spades in the long run.


4) Years ago, younger drivers tended to find that if they added their mum or dad or another older relative to their policy, it reduced their premium. The discounts might not be as big these days, but if there's an experienced driver who you need to cover in case they borrow your car, try adding them to your quote and then removing them, to see the difference. If you end up not including them but they do later need to borrow your car, most insurers will let you add drivers on temporarily, often for a fee but sometimes for free.


5) One thing that is still common with insurance companies is discounts for adding your spouse (wife/husband) or partner (typically they need to live at your address to qualify as a 'partner') as a named driver, creating an 'Insured and Spouse' or 'Insured and Partner' policy. As your spouse/partner is likely to have a financial interest in the vehicle (as well as being at risk of being in major trouble with you if they prang it!), they're more likely to take care when driving it, reducing the risk of a claim and therefore the insurer rewards you with a discount. That said, if their driving history isn't as good as yours, this might cancel out the discount or even increase the premium more.


#4 Be honest but don’t be afraid of trying variations on some of your details


When you get your insurance quotes, you’re likely to be asked a ton of questions and it’s important that you always take care to accurately represent your details. However, some variations on your answers could result in cheaper premiums whilst still being an accurate description of your details. For example, we know there are currently around 149,000 people bravely serving in the UK armed forces, but when we tested quotes using ‘H.M. Forces’ as the occupation, we often found that genuine variations such as ‘Soldier’ or ‘Naval Officer’ returned cheaper premiums. The key to remember here is that as long as your answer is still true, it’s valid to state it on your insurance quote.


One thing you need to be sure to get right is your estimated annual mileage and what you'll be using the car for. Don't just put 10,000 miles a year because you think that's average - chances are 10,000 miles is nowhere near what you're doing. Open the calculator app on your phone and add up what you do in a normal week going to work, where you study, shopping, day trips out etc and times it by 52. Add a 10% buffer and use this as your 'up to' figure. If you're using your car in relation to your job make sure you're including the miles for that too, and selecting the appropriate business use option on your quotes. If you end up not doing as many miles as you thought, some insurers will give you a partial refund for the unused miles.

#5 Don’t assume less cover means less cost


When you’re comparing quotes, start with Comprehensive cover. Whilst your old banger might not be worth repairing in your eyes, the fact that you’re looking to insure it for accidental damage says something about you to insurers that they might reward you with a cheaper premium for: this person might not be a higher risk driver who is just trying to reduce their costs by sacrificing cover. It might sound counter-intuitive but premiums are driven by statistics and this has been true for a while.

#6 Multi-car policies may save you money


If you have several cars yourself, or there’s a few others in your household, a multi-car policy may work for you. Tying multiple policies in with a single insurer might give you additional discounts to sweeten the deal but you may have to give up some flexibility if you later buy a car the insurer won’t cover or one of you moves out of the family home.

#7 Don’t pay your premium in instalments (if you can avoid it)


The interest or instalment rate charged to pay monthly can be eye-watering. Insurers will often do a full credit check on you and you’ll enter a formal credit agreement to pay monthly. If you’re happy to do that, why just accept the insurer offer of that high APR? You may be quids in by taking out a loan of your own or even a money transfer on your credit card and paying the insurer in full up front. This way, even if you haven’t managed to secure cheap car insurance you’re not then paying an extra penalty on top. You can check what 0% money transfer cards you might be eligible for before you apply by checking your credit profile for free with ClearScore.

If you're worried about paying for a full year of cover as you know you might need to cancel part way through the year, the rules for refunds should be the same regardless of your payment method. Insurers will also often ask during your quote how you normally pay for your policy. If you're able to answer 'yearly' or 'annually' on your quote you may be rewarded with a cheaper premium next time you're getting quotes.


#8 Make sure you use your correct name


What a stupid thing to say, right? Chances are when you're getting quotes you're going to be credit checked. Better credit scores can result in premium discounts so make sure you do everything within your power to help the insurers connect to your credit file, so use your full name on your quotes if that's what is on your bank and credit accounts.


#9 Don't be afraid of haggling


Once you've done your comparisons, don't be afraid to challenge your existing insurer to make you a better offer. Tell them what you've been offered elsewhere and see what they come back with. They might not offer anything, but you won't know if you don't ask.


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