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Car insurance is an inevitable expense and can be a heavy burden on your monthly budget. Since early 2021, car insurance costs have been slightly lower due to lockdown restrictions that reduce the number of cars on the roads.
But with most of the restrictions now lifted in the UK and more people back to work, new data from MoneySuperMarket shows auto insurance premiums are rising. Even if prices are rising, the good news is that there are many ways to save on your auto insurance. Let’s examine five options that should be on your radar.
What happens to the car insurance costs?
According to insurance comparison website MoneySuperMarket, the average price of hull car insurance increased by 2.5% from £ 402 to £ 412 between July and September.
This is the first time since the last quarter of 2020 that the premiums have been increased. MoneySuperMarket attributes the surge to the reintegration of people, which means there are more cars on the streets and more claims are occurring.
Despite the increase, the average car insurance costs are still 10.4% lower than at that time last year.
Motorists in London continue to pay the highest premiums, averaging £ 595. It is followed by the North West where the average premiums are £ 489. The West Midlands ranks third with an average car insurance cost of £ 477.
On the other hand, drivers in the South West are the least likely to pay at £ 298, £ 114 less than the national average.
How Can You Lower Your Car Insurance Premiums?
Now that it’s clear why car insurance costs are increasing, let’s look at five things you can do about it.
1. Choose your car wisely
Some cars are simply cheaper to insure than others. In fact, every car in the UK belongs to one of 50 auto insurance groups. The groups are based on factors such as performance, new car value and part price.
The lower the group of your car, the cheaper the insurance. So, if you’re in the market for a new car and don’t want your insurance premiums to cost you an arm and a leg, do some research to find out what group different vehicles fall into. After that, get insurance quotes for the cars you are considering to make a decision.
2. Compare car insurance quotes from multiple providers
Don’t sign up with the first provider you come across or automatically renew your current policy.
You could be missing out on potentially cheaper and better overall deals if you don’t take the time to compare car insurance deals from different companies. It takes less time than you might think, but you can save up to £ 253 a year, according to MoneySuperMarket.
3. Bundle your policies
If you have more than one car in your household, or have life, home, or other insurance, try using the same company. Some companies reduce your premium by a significant percentage if you have multiple policies with you. If they don’t offer this to you automatically, you have the right to ask!
4. Add a higher voluntary deductible
If you can afford it, increasing the voluntary deductible can save you a good chunk of the cost of your car insurance premiums.
5. Pay annually
Your auto insurance will likely cost you more if you pay monthly due to interest fees. If you can afford it, the cheapest way to get auto insurance is by paying in advance. You can put some money aside each month so that you can afford to pay at the beginning of each new insurance term.
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About the author
Sean is a personal finance writer with a strong passion for helping others gain financial literacy and make better financial decisions. It covers everything from credit cards to savings and investments.
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