The Big List of Money Saving Ideas: Car Insurance

This post is part of Money Watch’s Big List of Money Saving Ideas.

For many, car insurance is seen as a grudge purchase – something we know we must have, but do not really want to shell out for. It’s important that we get the right cover when purchasing car insurance, but there are ways in which you can keep the costs down. Here are my top tips:

  • Drive a smaller/ older / less powerful car – probably the most obvious way to save money on your car insurance is by driving a cheaper, older or less powerful motor. It’s also a good idea to avoid making any modifications to your car.
  • Park your car in a garage – if you’re lucky enough to have a garage (and not one filled with old paint tins, kids toys, garden tools etc), then insurers generally make it cheaper for you if you park your car locked in there overnight – on average you can save around 5% by doing this. But of course, it’s important not to lie about keeping your car in a garage, if you actually park it on your drive or on the road. In the event of a claim, it might be crucial that you haven’t lied on the application in order to get a payout.
  • Limit your mileage – doing less miles per year will probably see your premiums decrease.
  • Pay upfront – insurers charge you a premium for paying be Direct Debit – effectively loaning you the money, which you pay off monthly with a little bit of interest. Paying the insurance in one lump sum will avoid this.
  • Pay a larger excess – if you commit to paying a higher excess should you have an accident, your premiums are likely to be lowered.
  • Install a car alarm – buying a good car alarm can reduce your insurance costs by up to 8%.
  • Shop around at renewal – a common way to ensure you’re getting the best deal on any type of insurance is to shop around. Insurers will often give you a great rate for the first year to entice you to use them – after that they’ll gradually increase their premiums, counting on you automatically renewing your policy, as so many people do. You should receive a letter from them just before renewal detailing your premiums for the coming year. Use this as your prompt to get quoting on sites such as, and the all new Also, look out for those insurers who do not feature on the comparison sites, and get online quotes or give them a call. Play them off against each other to drive your premiums down.

One final thing to consider is the drivers you have named on the policy. In some cases it can actually lower your premiums by putting a more experienced, older driver on the policy. However, sometimes it is best to keep as many other people off the policy as possible. When getting your car insurance quotes, why not try out a few different scenarios and see how the premium differs?

Do you have any further tips for saving money on car insurance? If so, leave them in the comments.

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