Premiums for car insurance vary considerably as they are dependent upon a number of factors one of which is a statistical assessment of how much of a risk you pose. The greater the perceived risk of you having your vehicle stolen or being involved in an accident the more likely it will be that your insurance provider will have to pay out for a claim. Another factor that is taken into consideration is the type of vehicle you drive. In general, someone who drives an expensive car with a powerful engine will pay higher premiums than an individual who drives a less expensive, and less powerful car. Finally, an experienced driver is deemed to pose a lower risk so will pay less than a newly qualified driver.
According to recent data car insurance premiums have increased by around 11.8 percent over the past year. In addition to the factors mentioned above insurance providers will base your quote upon where you live, your age, and your gender.
Older drivers are viewed by insurers as being less likely to have an accident whilst driving as they are more experienced, whilst younger drivers are considered as being more likely to have an accident behind the wheel due to a lack of experience.
Your location also plays an important role in the eyes of insurers. If you live in an area where the crime rate is high then subsequently your insurance premium will be higher to take into account the increased risk of your vehicle being stolen or vandalised. By taking all of these factors into consideration you can save a substantial amount on the cost of your car insurance policy.
If cost is an important consideration then start by thinking about the type of cover that you require. Third party car insurance tends to be the cheapest as if you do make a claim the insurer is only liable for paying out for any damage caused to a third party or to their property. This type of cover can be suitable for those drivers whose vehicle has little monetary value as it does not offer cover against damage to themselves or their own vehicle, or fire and theft. If the vehicle is of reasonably high value though this type of insurance can be a false economy as if an accident were to occur you would have to pay yourself to repair or replace your vehicle.
Another way in which you can keep your premiums to a minimum is to make improvements to your security. If you keep your car in a locked garage overnight, and fit steering wheel locks and immobilisers insurance providers will appreciate that your vehicle is less likely to be damaged or stolen and they will factor this into the equation when determining how much you will need to pay.
You can opt for a higher voluntary excess as this will generally result in a lower premium as your insurance provider will be left with a smaller amount to pay out in the event of an incident occurring. It is, however, important to make sure that you do not set the excess at a level higher than you can comfortably afford as you will have to pay this amount in full in the event of a claim.
Most insurers will offer you a discount for every year that you drive without making a claim. This is usually set at 30 percent after one year, increasing to 70 percent after five years, and is known as a no claims discount.
For younger, inexperienced drivers car insurance premiums are notoriously high. However, there are two main ways in which you can lower your premiums if you are new behind the wheel. Some insurers will agree to lower the cost of car insurance if you take a young drivers advanced driving course. These types of courses teach new drivers additional skills not covered in the existing practical and theory tests such as how to drive on the motorway.
If you are an inexperienced driver you could also consider adding a more experienced driver to your policy in an effort to cut costs. The theory behind this is that having another driver on the policy means that you are likely to spend less time driving, and that a more experienced driver is not as likely to be involved in an accident. However, you must be careful not to name the more experienced driver as the main driver. This practice is known as ‘fronting’ and is liable to lead to an appearance in court!
It can be tempting to opt to pay for your car insurance by monthly Direct Debit. However, many insurance providers charge interest if you choose to spread the cost in this way so it can result in you paying more for your insurance in the longer term; be sure to check thoroughly the terms and conditions of your policy before taking out your cover.
There are a number of different ways to save money on your car insurance. Make sure that you shop around for the best deals, think carefully about whether you need many of the extra benefits that are offered to you, and take the necessary steps to ensure the safety of your vehicle, and your passengers, at all times.