9 ways you can help reduce your car insurance as costs continue to rise in 2024


January 2024

9 ways you can help reduce your car insurance as costs continue to rise in 2024

The average cost of car insurance has gone up a staggering 61% over the last 12 months according to the latest Consumer Intelligence data. This is down to inflation – many car insurance providers are finding replacement vehicles and repairs more expensive, coupled with an increase in claims so they are passing these extra costs onto consumers in the form of price increases. 

Climate change is also having an impact. A rise in extreme weather events, like flooding and damage to homes from storms, for example, can increase accidents and insurance claims, as well as damage to vehicles. As providers pay out more for claims relating to these events, car insurance premiums have risen in response. Insurance fraud is another major contributor to the increase in car insurance premiums. To combat fraudulent claims, insurance providers have invested in anti-fraud measures and passed these additional costs on to policyholders. Some anti-fraud measures include removing the right to general damages for soft tissue injuries to combat fraudulent whiplash claims, encouraging greater use of insurance data sharing and collaboration between regulatory bodies and the insurance sector as well as increasing the upper limit for small claims courts for personal injury claims from £1,000 to £5,000. The industry is also calling for the insurance industry not to settle for cash compensation and take a more robust approach when defending claims. 

With prices already increasing for households as the cost of living crisis continues to affect millions around the country, many people will be looking at ways to save money by reducing non-essential spending. Since having car insurance is a legal necessity, many of those who rely on having a car now need to find a way to insure their car without breaking the bank. 

Luckily, there are a number of options that may help consumers reduce the costs and obtain a much better deal. Take a look at 9 easy ways that could help you reduce your car insurance premium and help to combat rising premiums in 2024: 

Use a comparison site 

When it comes to choosing a new policy when you’re due to renew, you should always use a price comparison site to compare rates from multiple providers to find the best deal. Not only will it save you time but it can help save up to £506* and offer a wider range of providers. Money Expert, for example, can help you compare deals from over 100 of the UK’s top providers. Simply input your details and the comparison site does the rest, scouring a number of insurance companies to find the best deal for your needs. If you find one cheaper than your current provider is offering, you could always call them up first and see whether they can match it or offer you something better. 

As of the 1st January 2022, car insurers were banned from charging existing policy holders more for their renewal price, compared to what they would charge for new customers. This means that existing customers will be offered the same price as new customers for their insurance renewal. These rules now mean that customers could find that the best deal is their renewal price, however, it’s still worth doing your research on comparison sites and shopping around to get the best price you can. 

Check for unnecessary added extras 

Insurers are understandably keen for you to buy as many add-ons to their policies as possible, such as lost key cover, legal cover, no claims bonus protection and windscreen cover. The question to ask yourself is, do you actually need these additional levels of cover? If you deem it unlikely that you’ll lose your keys, consider opting out for this and look at extras more worthwhile such as no claims bonus protection that will actively save you money in the long run. 

Pay upfront rather than monthly

Choosing to pay for your premiums monthly by direct debit can make life easier by breaking the cost up into manageable chunks over the course of a year. However, insurers charge more for this option as you’re opted into a credit agreement, paying interest on top of the annual premium.

If you can, it’s worth paying for your insurance in full to get the very best deal. If you’re unable to pay upfront, you could also consider signing up for a 0% credit card and make smaller monthly payments until it’s paid off instead. to avoid the additional charges from your insurance providers.

Bundle your policies

Do you have other policies with any insurance providers for a pet or home, for example? If so, it might be worth calling them up and seeing whether you could save money by bundling your insurance policies with the same provider. Many insurers offer discounts for having multiple policies with them. 

Renew in good time

Insurers will ask for a start date for your insurance when you’re conducting your search. If you need cover urgently within the next few days, you may be quoted a higher premium compared to if you had looked earlier. So if you can, try to search and buy your insurance policy two to three weeks before you need it, which should help lower the price significantly. 

Add whether you work from home 

If you work from home and never travel to a place of work, it pays to make sure you declare this when buying your policy. Always ensure you don’t opt for ‘commuting’ when insurers ask how you will use your vehicle, as it’s likely this action will reduce your premium due to your car being off the road during peak times. 

Consider Black Box Insurance 

A black box uses telematics to gauge how you use your car, looking at the speed, acceleration and the time and day you drive it. It’s particularly popular with new drivers as it helps reduce insurance costs significantly whilst promoting careful driving. Some policies even reward your careful driving by lowering your monthly premiums. If the black box notices you speeding, it can also increase your premiums, so due care and attention are required if you opt for this type of insurance. However, you should also factor in the cost of the box and installation - this could easily outstrip the cost of just taking an orthodox policy if you’re a low-risk driver without a history of making a claim.

Maintain a clean driving record 

Avoid reckless driving and getting points on your licence to keep your driving record clean, as safer driving habits can lead to lower premiums. Building and protecting your no claims bonus can also help keep premiums low. A no claims bonus is accrued and added each year you don’t make a claim on your car insurance, which proves to insurers that you’re less likely to make a claim compared with someone without a no claims bonus, all else being equal. You can opt to protect your no claims bonus after five years for an extra fee. It’s well worth considering this add-on as it prevents your insurance from increasing significantly in the event of you having to make a claim in the future. 

Add a named driver

Depending on who is being added to a policy, additional driver cover can be a massive money saver. It’s a popular option with high-risk or inexperienced drivers who want to reduce the overall cost of their policy, such as young adults or the very elderly. It’s not just useful for high-risk drivers though; additional driver cover can also save money for couples and families who share their car, or those who don’t drive so frequently. For experienced drivers who want to add a high risk driver on their policy however, it can significantly increase their insurance premiums, so be aware. 

Disclaimer *51% of consumers could save £504.25 on their Car Insurance. The saving was calculated by comparing the cheapest price found with the average of the next five cheapest prices quoted by insurance providers on Seopa Ltd’s insurance comparison website. This is based on representative cost savings from September 2023 data. The savings you could achieve are dependent on your individual circumstances and how you selected your current insurance supplier.