How much should I be paying for car insurance?

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If you are a motorist, car insurance is a must. A lack of insurance can result in up to eight penalty points on your driver’s license. But how much should you pay to insure your car?

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Car Insurance: How Much Do I Have To Pay?

The amount of car insurance you can expect depends on several variables. Let’s take a closer look at them.

1. Your age

New drivers, especially younger drivers who have just passed their exams, are considered to be most at risk of being involved in an accident. As a result, car insurance premiums are higher for new drivers than for drivers with years of experience.

2. Where do you live

While it may seem a little unfair, where you live can have a huge impact on your premium.

If you live in a large urban area, where the number of drivers is higher and the roads are busier, your premiums are likely to be higher than in rural areas. If your area has a high crime rate, this can also lead to higher car insurance prices.

3. Beliefs about driving a car

When you have points on your driver’s license, many insurers see you as a higher risk and price your premium accordingly. Remember that points will remain on your record and will affect your rewards for between four and eleven years, depending on the offense.

4. Your job

What you do for a living can also affect the cost of your car insurance. The more time you travel for work, the higher your premiums. As a result, comedians and professional athletes are typically the types of occupations facing higher insurance costs. On the other hand, teachers and doctors are likely to be treated much more cheaply.

5. Your right to a no-claims discount

If you collect accident-free driving for years, your no-claims discount increases. The longer your claim, the more likely it is that you will have access to a cheaper car insurance deal. Many insurers offer you insurance for your no-claims bonus for a fee, even if you are involved in an accident.

6. The value of your car

It almost goes without saying that if you drive a Mini you are likely to pay less than someone behind the wheel of a Ferrari. Remember that any changes you make to your vehicle must be declared and will likely increase your premium.

7. Where you keep your car overnight

This is the question insurers ask to calculate the likelihood that your vehicle will be damaged while parking. If you park your car in a public parking lot overnight, you will likely pay more for your car insurance than someone who keeps their engine in a locked garage.

Which car insurance do I need?

What type of coverage you have is up to you. Let’s take a look at the three main types.

Third party coverage covers the cost of damage to other vehicles if you are involved in an accident. It also covers any personal injury to those involved, but not you yourself.

Third party fire and theft The insurance coverage is the same but also pays off if your car is stolen or damaged in a fire.

Full The insurance covers pretty much everything, including repairs to your own car after an accident, even if you are at fault. The fully comprehensive insurance also covers personal injury.

Unsurprisingly, the higher the coverage, the higher the premium. This means that a comprehensive policy almost always costs the most. For a more detailed breakdown, see our guide to the different types of car insurance in the UK.

How can I reduce car insurance costs?

The above list outlines some of the key variables that can affect the price of your auto insurance. But there are things you can do to lower the cost of insuring your vehicle.

First, many insurance companies bundle their policies with additional extras such as breakdown protection, legal assistance, key protection and a replacement vehicle in the event of an accident. While these may have value to some, for a cheaper deal, consider removing them when you don’t need them.

It can also be worthwhile to play with the voluntary excess. In the event of a claim, you pay this in addition to the compulsory deductibles from your insurer. If you increase your voluntary deductible, you will likely get a cheaper deal, so weigh the risk.

You should avoid the automatic renewal of your policy. Loyalty just doesn’t pay off in the auto insurance market. While insurers will no longer be able to bill existing customers than new customers from 2022, it is almost always worthwhile to carry out a market comparison in order to get the cheapest offer. To do this, use the services of a comparison website such as MoneySuperMarket.

If you have the time, it’s worth checking out other comparison sites as well, as car insurance prices can vary. The full list can be found on our auto insurance page.

To further reduce the cost of your car insurance and get more tips, check out our article on three tricks to get cheaper car insurance.

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About the author

Karl Talbot

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