The average price motorists are paying for car insurance now stands at a five-year low, but there are ways to further drive down the cost of cover.


The average price paid for comprehensive motor insurance between April and June this year was £430, according to the Association of British Insurers, its lowest level since 2016. The trade body said that the fall in part reflects insurers passing on cost savings from fewer claims settled during lockdowns, with fewer vehicles on the roads.

Despite costs being lower generally, car insurance premiums can still be a significant monthly outgoing for many people, especially younger drivers. Here, we look at some of the ways to keep car insurance bills to a minimum.

Shop around at renewal

Don’t just automatically accept your insurer’s renewal quote without checking to see if you can find a cheaper policy elsewhere. The cost of cover can vary widely from insurer to insurer, so you might be able to make substantial savings by moving to a different provider. Never leave it until the last minute to start looking for a new policy either – it’s usually a good idea to begin your search at least 25 days before your current policy is due to finish as costs tend to rise the nearer you get to the start date.

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Pay premiums annually rather than monthly

Most people pay their car insurance premiums in monthly instalments, but it is usually cheaper to pay for your cover annually if you can afford to. This is because if you pay monthly, you’ll be charged interest on the amount you’ve got left to pay, which pushes up the cost of your policy.

Choose a car from a cheaper insurance group

If you’re planning to buy a new set of wheels soon, make sure you think carefully about which model you go for, as this can have a big impact on the cost of your insurance premiums.

A spokesman for said: “The cost of your car insurance is based on a whole host of factors, many of which we can’t control, such as our address or our job. However, the car we are insuring plays a big role in determining the cost of our cover. The price of your cover will be partially based on what group your vehicle comes from. Group 1 vehicles, which include the Ford KA, Volkswagen Polo Match Evo or the Skoda Fabia SE for example, are some of the cheapest vehicles to insure.”

It's also a good idea to make as few changes as possible to your car once you’ve bought it, as any changes could bump up the cost of cover. Ryan Fulthorpe, motoring expert at GoCompare, said: “The more modifications you make to a car, the more attractive it will be to thieves so where possible, keep to the manufacturer’s fittings and you will save on your premiums.”

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Remember claims will increase the cost of cover

If you need to make a claim, be prepared for steeper premiums the following year. The annual cost of insurance increases to an average of £844 if a driver has made an insurance claim in the past year, according to research by Comparethemarket, compared to a typical premium of £660 for a driver who hasn’t made any claims in the past five years.

Dan Hutson, head of motor insurance at Comparethemarket said: “If you’ve had an accident you don’t have to claim on your insurance. However, you do need to tell your insurer about the incident, even if you were not at fault. It may be tempting to keep quiet, especially if you think it might save you from a price hike. But if your insurer finds out later from the other driver or another party, then they could refuse to honour your policy for failing to report it. Any increase in your premium will usually be much cheaper than the thousands of pounds it could cost to cover any repairs from an accident out of your own pocket.”


Research from Comparethemarket can be viewed here