10 tips to beat rising car insurance costs

Car insurance premiums have risen by record amounts, so take a look at these top tips to help keep the costs down...

Recent research from the AA has revealed that car insurance premiums have soared by a record 40.5% during the past year and the average comprehensive policy now costs £703.79.

Third party, fire and theft cover has seen even larger hikes, rising by 57.1% over the past 12 months, and now stands at an average of £1,098.

The increases come on the back of rising fraud and increased personal injury costs.

So if your car insurance is soon up for renewal, here are some top tips for fighting back against rising premiums.

Shop around

No surprises here - but the first thing you should do is to shop around for car insurance policies. Prices can vary considerably, so it really is worth doing. In fact, shopping around could save you an average of £300 each year, according to the AA. 

And it's really easy to do - just take a look at our online comparison tool where you can compare a wide range of policies and see what works out cheapest for you.

Increase your excess

The excess is how much you have to pay out when you make a claim. When you apply for your insurance, you'll be asked how much voluntary excess you would like - in other words, how much you want to pay on top of your compulsory excess.

The higher the voluntary excess you pay, the less you're likely to have to pay for your car insurance premium - so it's certainly worth thinking about.

Keep it secure

Keeping your car in a secure place can help to reduce your car insurance premiums. So if you have a garage or driveway, make sure you use it and state that you are doing so on your application. It's also worth adding an immobiliser, alarm and tracker to your car as this will reduce the risk of it being stolen, and therefore bring your premium down.

Avoid paying monthly

If you decide to pay for your car insurance in monthly instalments, rather than in one go, you're likely to end up paying around 10% to 20% more. So you're much better off paying the full amount upfront.

If you think you will struggle to do this, it's worth paying with a 0% on new purchases credit card. The Tesco Clubcard Credit Card, for example, offers an interest-free period on purchases for 13 months - so you'll have more than a year to pay off your balance without worrying about paying interest. Just make sure you do pay off the balance in full by the time the 13 month period is up - otherwise you'll be hit with an interest rate of 16.9%.

Add a driver

If you're a younger, less experienced driver, it can be a good idea to add an older driver to your policy as this can bring down the cost. That said, you need to be aware of fronting - in other words, when you put a fake 'front' on a car insurance policy you've taken out in order to bring down your premiums.

An example of this is if you insure a car in your own name and then add your teenage son as a named driver to the policy, but your son is actually the main or only driver. This is illegal. You can read more about this in This lie could cost you thousands.

Consider your needs

If your car is getting on a bit and really isn't worth much, it can work out cheaper to simply get the bare minimum of cover for your car. This is called third party cover and only covers your liability to others - so you won't be covered for any damage to yourself or your vehicle. (So only choose this option if you're happy to take this risk.)

Meanwhile, third party, fire and theft will give you third party cover, as well as cover to pay for repairs or a replacement of your car if it's stolen or destroyed by fire.

Comprehensive cover, on the other hand, is more expensive, but will provide cover for any damage caused to your car, and other cars that might be damaged by your vehicle if you have an accident, as well as injury to yourself or others.

Go the extra mile

If you want to bring down your premiums even further, you could take an advanced driving course. Taking the Pass Plus training course could shave as much as 30% off your car insurance premium because it's designed to help new drivers become safer and more confident. Although the course is aimed towards new drivers, you can take the course at any time.

Bear in mind however, that you will have to pay around £140 to £150 (the cost depends on where you live, the instructor or driving school you use and how long it takes to complete the training), but many local councils support the scheme and will subsidise the cost.

Protect your no-claims bonus

If you haven't claimed on your car insurance for a year, you'll earn a no-claims bonus which can help to bring your premium down. So successfully managing to build this up each year can be well worth it.

Once you've reached five years, you could save as much as 65% on your car insurance! What's more, at this stage, you can also choose to protect your no-claims bonus.

Should you decide to do this, your premium will increase slightly, but you're likely to save money in the long-run. That's because this protection allows you to make at least one claim (usually two) before losing your bonus. So it's definitely worth considering.

Modifications

Try to avoid modifying your car - adding spoilers, alloy wheels, or boosting the engine size is likely to increase your premium. And in some cases, they could void your policy. So avoid tinkering with your car too much.

Pay as you go

If you don't drive your car on a regular basis, you could consider a pay-as-you-drive insurance policy. How much you pay will depend on how often you drive and at what time of day. You can find out more about this in How to save money on your car insurance.

This is a classic article that has recently been updated.

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