Hundreds of websites claim to be able to find you the very cheapest car insurance; but when you get quotes they are no better than you could have got yourself by visiting comparison sites such as MoneySupermarket.com or Verycheapestcarinsurance.org.uk. Why is this?
The truth is that premiums are decided by two kinds of factors: those you can't do much about, and those you can. There is no magic wand that can change this.
Factors you can't control
- WHERE YOU LIVE: this has far more effect on a premium than most people realise and the governing factor here is the postcode. Some postcodes have a higher level of crime, of accidents, of suspected fraud than others. As a consequence, insurance rates can be much higher in these areas than the average. It is quite common for some roads to pass through more than one postcode; this is why people at one house can have to pay substantially more than others, perhaps only a few houses away.
- YOUR AGE: younger people pay far higher premiums than older ones; particularly those under 25. This is partly because they are likely to be less experienced behind the wheel, partly because younger people tend to be more impetuous than their elders, partly because the younger lifestyle leads to more out-of-normal hours driving. Coming back from a late night disco is a hazardous practice; roads are emptier so there is more temptation to drive faster, drivers can be tired and there might well be a bit of alcohol or even drugs affecting their moods and responsiveness.
- YOUR FINANCIAL STATUS: more and more insurers are checking on the credit rating of the people who approach them for quotes. Someone who is financially secure is more likely to drive a more modern car, with all it's safety enhancements; and to maintain it properly too.
- YOUR OCCUPATION: this can have a huge bearing on your premiums. at one extreme, people who are accountants, solicitors, care workers etc are more likely to be responsible people who will make sure they don't take unnecessary risks. Their premiums are likely to be very reasonable. At the other extreme, professional sports people, or those in the entertainments industry, are more likely to be driving late at night, and with a high level of adrenaline! They are also more likely to be out celebrating in the evenings, where there is always the possibility of alcohol consumption. Finally, many of them are highly paid, and they may be carrying passengers in a similar situation. This means that potential compensation claims could be very heavy in the event of an accident.
- WHERE YOU PARK YOUR CAR AT NIGHT: whether or not you have a driveway or garage available overnight is very important. A car in a locked garage is far less likely to suffer damage, theft or vandalism than one that is parked by the kerb, especially in an inner city area.
Factors you CAN control
- YOUR ACCIDENT RECORD: someone who has been involved in one or more accidents in the past is more likely, statistically, to have more in the future. It makes little difference whether or not they are fault claims: an accident is still an accident howsoever it is caused.
- YOUR CONVICTIONS RECORD: drivers who break the law are viewed as being less responsible than those without convictions, and therefore more likely to take risks.
- THE TYPE OF COVER YOU APPLY FOR: insurers are chary of those who look for third party only or even TPFT cover. They reason that their cars may not be worth very much, in which case they may not be well looked after, or routine maintenance needs may be skipped. All these factors can lead to a higher claims problem for them. Whilst it used to be the case that 3rd party or third party fire and theft cover was a lot cheaper than comprehensive cover, this is not necessarily the case nowadays: a fully comp policy can often be a lot cheaper, as well as offer better benefits.
The bottom line
- IF YOU ARE A YOUNGER DRIVER, think about getting a telematics (ie 'black box' policy, in which your premium depends on how you drive, where, and at what times of day. It could save you a lot of money. However, if you were to drive badly you could find your premiums rising or even have cover withdrawn completely; it is a double edged sword. Many people are concerned about privacy issues too; someone else will be able to track your movements accurately for all the time you was in the car; and if you lent it to someone else you may take the blame for that person's bad driving.
- If you are older with a reasonable driving record then you could compare quotes with a good price comparison site. Bear in mind though that they almost all will take a commission from each policy they sell but this differs according to the deals they have struck with individual insurance companies on their panels. Consequently, it is often possible to get completely different quotes for identical policies from the same insurers, on different comparison sites. Get quotes from several of them, and you may have a pleasant surprise.
- IF YOU HAVE SEVERAL CLAIMS OR CONVICTIONS: you may be better off talking to a specialist broker. Most insurers who appear on price comparison sites are mainly interested in insuring people with a good track record. A good broker may be able to introduce you to lesser known insurers who will take a more lenient view of a transgression or two. It's worth trying if the quotes you are getting are unreasonably high.