Last year we saw car insurance premiums rise by a massive 14% with experts expecting a similar rise in 2017.
For most people this will mean an additional £50 – £100 on top of their annual premiums. However, for young drivers this increase could be significantly higher – and it’s easy to see why. This could have even more impact if they have car loans.
20% of drivers crash within their first 12 months of unsupervised driving. This spells huge risk to insurance providers who will ultimately have to pay-out when an incident happens. Newly qualified 17 year olds you can expect their first year premiums to exceed £2,000 a year!
The national average fully comprehensive cover is now £462 a year, according to the Association of British Insurers (ABI).
But just because prices are rising, this doesn’t mean you should settle for the first quote you’re given. There are several ways you can combat these rising costs. Here’s just a few:
1. Compare and save
Shopping around for your car insurance is a must. Some of the larger comparison sites will allow you to compare costs from over 100 insurers in a matter of minutes.
Each comparison site will have different panel of insurers. To maximise your savings we recommend using all major sites including Compare The Market, Confused, Money Supermarket and Go Compare.
In addition, there are a handful of insurers that don’t feature on any comparison sites. It’s always worth getting quotes off these directly too.
If there are multiple cars in your household, it may also be worth checking the multicar providers like Admiral.
Once you find a cheaper quote, go back to your current provider to check if they’ll match it. Providers will often be keen to keep you on-board, especially if you have a clean driving history.
2. Protect your no claims bonus
Having a lengthy no claims bonus is the most effective way of cutting your insurance premiums. This is why it’s so important to protect your no claims.
Adding no claims protection may add a few pounds to your annual premium but this is a small price to pay in the long-run.
3. Pay annually if possible
Paying your car insurance monthly adds significant amounts to your premium. Insurance providers will charge the equivalent of around 35% APR for those paying monthly. This can mean an extra £100 on top of your premiums.
If possible always pay your insurance premiums annually. Borrowing on a low interest loan or credit card may be worth considering if you don’t have the savings readily available.
4. Increase your voluntary excess
Your voluntary excess is the amount you agree to pay up-front for repairs in the event of an accident. Increasing your voluntary excess will bring down your annual premiums.
Be wary of the amount you agree to pay though – especially if your car is low-value.
5. Use your car less
Having a lower annual mileage can equate to a healthy saving. Don’t be tempted to drop you estimated mileage too much though as this could invalidate a claim.
For example, if you say that you only do 5,000 miles a year and the current mileage on your car is 50,000. However, you’re involved in an accident 6 months later and your mileage is up to 60,000 this could invalidate your claim as you’re essentially driving outside of your insured mileage.
It’s also worth checking your usage. Avoiding using your car for commuting or business purposes can bring down your premium significantly.
These are just a few of the ways you can combat the rising cost of your car insurance premiums.
Ultimately, your premiums will mainly be defined by your age, gender and postcode. If you’re young and live in a built-up area you can expect your premiums to be high.
What’s important is that you drive safely and build up your no claims bonus. You’ll be surprised how much your premiums will go down, just by being a more experienced driver.