Five ways to slash the cost of your car insurance
With more people driving uninsured to save money, here are some useful tips to reduce your car insurance premium.
Ever wondered why your car insurance premium seems to rise every year, despite the fact your number of years of No Claims Discount (NCD) has increased?
Well you can point the finger of blame - in part at least - to the increasing number of uninsured drivers on our roads.
900k uninsured drivers
According to the Motor Insurer's Bureau (MIB) a shocking 900,000 drivers under the age of 30 are currently driving uninsured, of which 600,000 are aged between 21 and 29.
But while the typical uninsured driver is male, and aged between 17 and 29, a surprising 15% of uninsured drivers fall into the 40-49 age range.
Labelled the "squeezed generation", it's believed that these drivers are feeling the financial pinch particularly badly - due to having to juggle household expenses, raising children and caring for elderly parents - and some clearly choose to forgo car insurance to save money. But is this an acceptable excuse?
Insurance rises
So who pays out when an uninsured driver has an accident? Well the MIB enables compensation to be recovered by victims of uninsured drivers (or drivers who fail to stop), which in 2008 cost them a shocking £380 million. And the total cost of uninsured driving in the UK is estimated at a whopping £500 million.
And while you may think this has nothing to do with you, you may be surprised to learn that the MIB is funded by UK motorists. So every law-abiding driver is currently paying a £30 levy on their car insurance policy to cover these costs. Ouch!
Stay insured
Clearly something needs to be done as not only is driving uninsured unbelievably dangerous, it's costing the responsible drivers money too (which we can ill afford!).
Indeed, according to recent research, uninsured drivers kill three people and injure 460 others each week, with a quarter of these accidents caused by young people.
And with feeble penalties slapped on uninsured drivers when caught (ranging from fines to eight points on their driving licence), the law clearly isn't proving a strong enough deterrent.
Unbelievably, the MIB reckons that one in ten 18-34 year-old drivers claims to be unaware that car insurance is a legal requirement. Really? If this is the case, should insurance not become an integral part of the driving test?
I gave my local driving test centre a ring to find out. They revealed that the legal requirement for drivers to have valid car insurance does come up in the theory test. What's more, all drivers taking their practical test must sign a form stating that the car they will drive is insured. Can young drivers really claim such ignorance?
So what can we do to encourage everyone to stay insured?
Well, we can use a few tricks to make car insurance more affordable. The MIB has the following recommendations:
How to slash the cost of your car insurance
1. Increase your excess
By increasing your voluntary excess on your insurance policy you can reduce the premium significantly. This will make it more affordable, but be warned, it will increase your costs should you need to claim.
2. Choose appropriate cover
Match the cover you take to your vehicle. There's little point forking out for expensive comprehensive insurance for a car worth very little. Look into third party, fire and theft cover instead which can be far more affordable.
3. Advanced driving course
You may not realise this but by taking an advanced driving course and joining the Institute of Advance Motorists (IAM) you can reduce the cost of your insurance premiums significantly. And while the course can cost £150+ the good news is that a number of councils support the scheme and will offer bursaries to cover 50% of the costs!
4. Pay as you Drive insurance
Finally, if your annual mileage is pretty low, find out if you could save by choosing a Pay As You Drive insurance policy instead.
And for even more tips on how to slash the cost of your car insurance, read 12 tips to drive down your car insurance costs.
So it's clear something needs to be done to enforce the legal requirement of having car insurance - perhaps this could be achieved through more severe penalties for those who are caught. But while insurance can be expensive, hopefully by following some of these tips, you can make it a bit more affordable.
More: Video: Beating your renewal quote is nothing to shout about |Car insurance for the short term
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"Clearly something needs to be done as not only is driving uninsured unbelievably dangerous, it's costing the responsible drivers money too (which we can ill afford!)." Well, not really. Earlier in the article it is carefully explained that 10% of drivers are uninsured, and any problems they cause are automatically paid out by the MIB. So no problem there then. Imagine we drove out the uninsuredness. Or almost. Insurance companies would then pay lawyers to fight cases and avid the levy. Money for innocent victims or for lawyers? Mmm, tough choice. (I don't think.) Whilst the level is 10% the levy is paid and everyone gets on with life. But drive it down to 2% or 1% and there'll be weaselling all over the place, and innocent victims (let's remember them, folks) will be the losers. Having the industry support the problems it causes is the right solution. But of course this micro-managing government has come up with a better idea. There is to be a new department set up which will easily supply insurance details to authorised parties . Uninsured cars will be seized and crushed. And another two thousand civil servants in a far province (Labour heartland, might one guess?) will have jobs for life producing no economic value. On a lighter note: when I see the ads claiming £200 saving over last year's premiums, am I alone in thinking that doesn't make the driver smart this year it means they were stupid last year!!!
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Jay. I understand your comments would be quite common sense and had I not had an insight in to this world I'd assume the same. However, there is a database for both tax, insurance and MOT all available, however and linked to vehicles. However there are such things as trade policies, that are usually in force for businesses. They buy a policy for say £50k for arguments sake that insures the driver and not the vehicles (like most personal cars). How this works then is that when Police, ANPR or any other person/authority checks on the registration of the vehicle. It shows no insurance, when actually the car is covered through the driver and the trade policy. Essentially it's so that a company with lots of drivers don't have to put names on and off each car they own and run. Causes some problems for the authorities though.
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Mr Pound - I have been thinking for some time that a possible answer to huge premiums for young drivers might be to reduce the premiums to an affordable level but make the excess huge. This should hopefully pencourage safer driving as wel as making insurance affordable. What do you think?
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20 November 2009