How you can save more than £600 on your car insurance

"The past two years have seen the biggest-ever rises in premiums as insurers struggled to close a widening gap between premium income and claims costs," says Simon Douglas, the director of AA Insurance.

"Although historically costs had been rising, premiums had not and, at the end of 2009, for every £100 taken in premiums £123 was being paid out."

That gap has now been closed but it means we're all facing much steeper car insurance premiums. So what can you do to keep your premiums as low as possible?

1. Switch your insurance provider

One in four drivers automatically renew their car insurance with their existing provider each year. But spending a few minutes comparing premiums with other providers can save you a lot of money. This leads to an average annual saving of £348, according to research by

Saving: £348

2. Think about your job title

When you are applying for car insurance try entering a few different versions of your job title.

Insurance firms use your job title as one of their risk factors when working out your premium and just a small change can save you a fortune.

For example, if I shop for insurance for a small hatchback I can get a rate of £420 for the year if I say I'm a journalist but if I say I'm an editor it can drop to £395. Both job titles are correct so this is entirely fair and legal.

Saving: £25

3. Add a driver

This may seem counter-intuitive but if the second driver is older and/or has a clean licence it can cut your premiums.

In the case of Graeme Lambert a 29-year-old journalist from Dunstable, adding his 26-year-old girlfriend to his policy cut his premium by £200 as she had a clean license and her profession as a teacher was seen as low-risk by the insurer.

Saving: £200

4. Pay up front

If you choose to pay for your insurance in monthly instalments you'll pay for the privilege. The insurer is extending you credit by allowing you to do this so it will add to the overall cost to reflect this.

For example, a quote for a small hatchback is £490 if I pay for the year in full but it rises to £530 if I pay monthly. So it's far better to pay the whole premium upfront. If you can't afford to do this, consider paying on a 0% credit card and paying it off each month – that way you can spread the cost without paying a penalty.

Saving: £40

5. Haggle

Car insurance is one of the few remaining areas in life where you can haggle. If you want to stick with your current insurer but want to reduce your costs give them a call and quote the cheapest premium you can find on the web.

Most car insurance sales people have a standard discount they can give without having to get authorisation and another discount they can use if they clear it with their supervisor. Just be prepared to cut and run if they won't match the price.

Saving: Depends on your negotiations skills

Your Comments

I drive a 1996 Jaguar XJ6. Most people think this car would be expensive to insure but in fact I pay only £154.00 per year!

The reason is that Jaguars over 5 years old can be classified as 'Classic Cars' and so qualify for much cheaper insurance.

Also there is no messing about with NCB etc.

I save money on car insurance the traditional way: I am 52, and I have a clean licence (issued in 1985 so now clean for 26 years), and a maximum no-claims bonus.

Not bouncing the car off other road users does help to keep the premiums down :-)

Interesting reading but, having just looked into insurance for a used car on 3rd party, I noticed a slight anomaly in as much as the cheapest insurance offer was £244.33 but if you decide to pay by direct debit the premium rockets to £350.90.
I couldn’t do the math in my head so up comes “calc” and I started playing with the figures; it turns out that if you don’t have the spare money in the bank to pay the premium in one go but know you will have enough to cover the outlay monthly, YOU WILL pay an additional 43.5% above the original cost just to ease the strain on your already tight income.
The amount will differ between companies and types of insurance, you will have to pay the additional cost for your convenience. There does not seem to be a legitimate reason other than to make sure the company gets its pound of flesh either way.
Somehow, do the math. If you have access to a computer and a spreadsheet, create your own “go Compare” document and when you decide to insure your car with a broker, find out why they are charging you upwards of 40% for the privilege of using a bank at no cost to them.

The car insurance is one of those things that eat a lot of money but are necessary. Most insurance companies have amazing offers like my local car insurance Ireland provider, but do not be fooled, none of these companies sell anything that is not in their benefit.

Car insureance companies provide so many different type of covers that a normal user confuse and buy those policies aslo which is not at all useful for him. Very few people knows the concept of multi car insrance, multii car insurance is itself a cost cutting technique in insurance premiums. By multi car insurance you can enjoy same policies for all your car with benifited rates. Also for more detailed information about the cost cuting methods for premium rates you may cunsult your insrance broker, he is the one who knows all the pro and cons related to respective policies. To know more benifits of a insurance broker  this blog is worth a look.