Written by: Andy Townsend
Head of Marketplace Distribution, Consumer
2nd September 2022
Many of us face the challenge of figuring out how to save money on car insurance every year. Happily, there are several ways you can get quick savings on your policy.
Cheap car insurance may seem unattainable because of factors out of your control, such as how old your vehicle is , where you park your car overnight, and your driving experience. When it comes to insurance premiums, age is also a key factor. Younger drivers typically pay more for insurance because many providers view their lack of experience as a risk.
But, whatever your circumstances, there are money-saving options available, including black box insurance. But It’s important to be honest and accurate when obtaining insurance quotes because giving false information is an extremely serious matter and could invalidate your policy. Don’t be tempted to lie to get a cheaper premium.
Shopping around is crucial if you’re looking for cheaper car insurance. You can also benefit from immediate savings on your insurance by reviewing your cover and cutting the extras you don’t need or buying a car that’s cheaper to insure and has more affordable road tax.
In this guide, we’ve pulled together our top tips on how to get cheap car insurance, so you can get the best deal for your needs and enjoy even more savings.
Your car is one of the most significant rating factors when it comes to your insurance premium. If you're in the market for a new vehicle, you should think about the cost of insurance before making a purchase.
The Group Rating Panel, which includes members of the Association of British Insurers and Lloyd’s Market Association, sets 50 car insurance groups in the UK.
Your vehicle will fall into one of these groups. It’s worth noting different insurers may also have their own methods for determining car insurance groups.
Generally, the higher the car insurance group, the more it costs to insure your vehicle — so if you want lower insurance premiums, you should think about whether it's time to change your car.
If you’re planning on buying a new vehicle, you should work out what cars have cheaper tax and insurance. For a more affordable insurance policy, start by paying attention to the car insurance group. You can find this information using sites like Cuvva.com. You might also want to consider the car’s running costs too.
Car insurance policies can be expensive, and many drivers prefer to spread the cost into affordable monthly payments. But, generally, paying monthly can be more expensive. This is because you enter into a credit agreement and are typically charged interest when you pay for your car insurance monthly.
Annual payments can help lower the cost of your insurance, as it means you’re not paying interest each month. While it’s not possible for every driver to pay upfront in a lump sum, you should consider how much you are likely to save.
If there are multiple cars in your household, it’s a good idea to explore multi-car discounts that could offer further savings.
Multi-car policies can vary between providers. You may save money if you insure all your cars with the same insurer. Alternatively, you can combine your car insurance policies by insuring multiple vehicles under one multi-car policy. With a multi-car policy, you could also benefit from extra discounts and save time by having just one renewal date to manage.
There are many different add-ons and optional extras available on your car insurance policy, and they can vary by insurer. These extras offer cover benefits but will cost you more.
Some insurers and comparison sites may automatically add extras to your insurance quotation, increasing the price. Make sure to closely review your cover before agreeing to an insurance renewal or a new policy.
You might find legal cover, no-claims bonus protection and breakdown cover among the optional extras on offer. Although these add-ons are practical, they are not always necessary.
It’s important to choose a car insurance policy that suits your needs, so remember to carefully consider whether you need each optional extra before adding them to your policy.
Voluntary excess is the amount you volunteer to pay in the event of an accident. You decide how much voluntary excess you're willing to pay, and increasing the amount is one way to reduce the cost of your insurance.
When you receive a car insurance quote, think about how changing the voluntary excess affects the price, and then choose an amount that you're comfortable with.
If you file a claim, you must pay both the voluntary and compulsory excess — so consider the affordability of your combined excesses in the event of an accident and make sure your savings are worth paying the higher amount.
How much time you spend on the road can affect your insurance. Overestimating the miles you drive can increase your insurance costs unnecessarily.
It's worthwhile doing a calculation to make sure you've not misjudged your mileage. A quick way to do this is to use Google Maps to estimate your regular commuting mileage or a mileage calculator tool.
Once you’ve estimated your daily number of miles, you can convert it into an approximate yearly total using the table below.
| Miles you drive in a day (approx.) | Miles you drive in a week (approx.) | Miles you drive in a year (approx.) |
| 3 | 21 | 1,500 |
| 5 | 35 | 2,000 |
| 10 | 70 | 4,000 |
| 15 | 105 | 6,000 |
| 20 | 140 | 7,500 |
| 25 | 175 | 9,500 |
| 30 | 210 | 11,000 |
| 35 | 245 |
13,000 |
If you reduce your annual mileage, perhaps by cutting back on trips or taking other modes of transport, you could see a drop in your insurance premium. If you do use other modes of transport you still need to account for the costs these incur as it might not be cheaper for you in the long run.
Remember that providing the correct information when requesting an insurance quote is critical; otherwise, your premium may be inaccurate and you may not have a valid policy.
Adding a named driver means that another person can drive your car and you'll both be covered if something goes wrong. With a comprehensive insurance policy, the named driver will have the same cover when driving your vehicle.
Adding a named driver may lower the cost of your insurance, according to Moneysupermarket.com. The insurer might assume that you will spend less time driving. This reduces your chances of being in an accident and filing a claim, resulting in lower car insurance quotes.
There will usually be a fee to pay when adjusting your policy mid-term, but you might benefit from a large reduction to your premium.
If you are a new or young driver, you may find that the cheapest policies include a black box device.
A black box (also known as a telematics device) can be a great way to keep your premiums down. Insurers use black boxes to reward safe drivers, regardless of age or experience. After the device is fitted to your car, the black box will track your driving — from the time of day you’re driving to your mileage and how well you apply the brakes.
For example, if you’re a new and careful driver, you could save money with black box insurance by driving at safer times, reducing your journeys, and braking more smoothly.
Some insurance providers will reward you for evidence that shows you are a careful driver, such as additional driving qualifications.
Extra driving courses will be an expense, so it may not always be a cost-effective option.
But for new or younger drivers, premiums tend to be higher due to lack of experience, so taking additional courses may help lower your car insurance premiums. You’ll also gain the added benefit of improving your motoring skills.
Looking for even more savings? If you’re set on buying a new car, you could save money by negotiating with the car salesperson. Find out more in our guide to haggling for a used car.
If you’re looking for ways to finance your next car purchase, read our ultimate guide to financing a used car.
If you’re considering a personal loan, find out more about our car loans. At Shawbrook, we believe in doing things differently. When you apply for a personal loan quote with us, if you’re eligible, we’ll provide you with a guaranteed, personalised rate without impacting your credit score. This gives you the opportunity to shop around and find the right rate for you.
All loans are subject to status. The interest rate offered will vary depending on our assessment of your financial circumstances and your chosen loan amount. Terms and conditions apply.
Check out our other articles to help with purchasing and financing a used car.
Read our latest blogs and guides for more helpful tips for managing your finances