What kinds of things affect the cost of my car insurance?


March 2018

What kinds of things affect the cost of my car insurance?

Car insurance is one of those things you can’t get around - if you want to drive a car you’re going to need some form of insurance. However, if you’re not careful, getting the right cover can end up being pretty expensive.

Insurers will look at a variety of factors before giving you a quote, some of which are things that you cant change (like your age), but some of them you can. We’ve put together a list of some of the main things that will affect the cost of your cover, so that you don’t face any nasty surprises when you take out a new policy.


One of the first bits of information that you will be asked to disclose is the post code of your home address. Insurance companies will have a database with information regarding the frequency of accidents as well as car related crime in your area. If you live in an area with a high frequency of road accidents and high levels of car related crime, the cost of your policy will increase accordingly.


How old you are will be another big factor in how much you pay for car insurance. It is generally considered that drivers between the ages of 17-25 are responsible for a disproportionately high amount of accidents, and therefore if you fall into that demographic you are likely to pay more than someone older. Insurers will also look at how long you’ve been driving as another factor so although your age will play a large part in increasing the cost of your insurance, years on the road will help drive it down somewhat.


How much you might be expected to claim for if your car is damaged or stolen will be a huge factor in working out the cost of insuring it. Certain cars are more sturdy and durable than others and some have very expensive or hard to source parts, for example. All of this will come into play when assessing it for insurance. How desirable (and therefore susceptible to theft) the car is will also come into play to - a new flashy sports car might by flagged as a risk by an insurer and therefore warrant a higher premium.


Leading on from the value of a car many companies will look at how powerful your car is as this will affect both how fast it can go, increasing the chances of a crash. , This is especially likely to increase your monthly cost by quite a large amount if you are a young, inexperienced driver.

How you use the car

If you work in a job that requires a lot of driving, then the chances are your insurance cost could more due to the higher chance of you being in an accident. If you drive through neighbourhoods that have a higher risk of accidents or park in an area that has a higher risk of crime as part of your work, this can also affect the cost.

Credit Score

Although not directly related to your driving ability or the car you own, studies have shown that those with lower credit score are deemed more likely to put in a higher number of claims as well as a bigger chance of committing insurance fraud. Having a poor credit rating isn’t as likely to affect your monthly insurance cost as some of the other factors but some insurers will take it into account.

Type of insurance

There are various different types of insurance you can buy, and different optional extras you can add that will affect the cost, but broadly, cover comes in three forms:

Third Party: This is the most basic (and cheapest) level of car insurance you can get, and only pays out for repairs to others’ vehicles or property that you damage as a result of your driving – you’ll need to pay out yourself for any repairs to your own vehicle..

Third Party, Fire & Theft: This option is generally more costly than basic third-party cover and will offer additional coverage to yourself if your car is the victim of theft or attempted theft, or is damaged in a fire.

Fully Comprehensive: There are different to levels of what is covered here, varying from insurer to insurer, but generally comprehensive covers any damage done both to yourself and a third party’s property. This will generally be the most expensive insurance available, but this is not always the case so its always worth shopping around.

No claims bonus

This will be one of the biggest factors that insures will look at when calculating how much your car insurance will cost. A no claims bonus one of the most straightforward indicators of how safe a driver is, and the discount you’ll get for not claiming will increase year-on-year as a result. .

Ways to make your car insurance cheaper:

There are a few different ways that you can make sure your car insurance doesn’t cost too much.

Black Box

Having a black box, or telematics device, installed can really drive down your costs. Black boxes report up to date details of your driving performance back to your insurer. Many insurers will offer you a cheaper policy based on various conditions which can be monitored by the black box.

Increase your excess

If you raise the lump sum that you will have to pay to cover and accident, then you will generally pay less each month. You must find a middle ground here, as if your excess is too high on an inexpensive car it can become a false economy and you could end up severely out of pocket if you do have an accident.

Protect your no claims bonus

It may seem like the most logical decision to claim on a crash, but it’s worth thinking about how much this claim will affect the cost of your car insurance in the future. In some situations, it’s worth shouldering the cost for repairs of some minor damage to your car in order to preserve your no claims bonus and save you money in the long run

Shop around

There a plenty of deals available on the internet and the worst mistake you can make is jumping into bed with the first policy that you find. Have a shop around and scout out a few options, considering reviews, excess levels and extra features before making a choice.

Be honest

Although it may seem like a smart idea to leave out small details that might push your cost up, if you’re found to have been remiss when you come to make a claim, your policy will be invalidated. So, although you might save a few quid in the short term, if you do have an accident it will cost you big time.