Get cheaper car insurance. Tips from

Get Cheaper Car Insurance

From years of messing around with insurance companies in different countries, here's what I've learned about trying to get a better deal. It might help you. It might hinder you. Hopefully there's at least one nugget of information in here that you didn't know about though. I'll add more items to this page as time permits as well as any good ideas from readers.

1. Don't lie

Don't even be economical with the truth. It might result in a cheaper insurance quote now, but if you ever need to make a claim and they discover that your 1.6 litre car actually has a 2.0 litre engine, your insurance will be voided and that'll be all she wrote. It's a lot more difficult to lie about the car now though as most insurance companies require the VIN before they'll quote you. Even so, lying about occupation, address - any of the other influencing factors could ultimately end up very badly, because if you lie well enough, you'll be slapped with a fraud charge as well as having to pay for your accident and resulting claim. That Would Be Bad.

2. Beware the deductible.

Your deductible has a huge bearing on how much you pay for your car insurance. It's the amount below which the insurance company won't pay out. For example a £250 / $500 deductible means that any claim below that value is your responsibility. For any claim higher than that value, you pay the deductible and the insurance company pays the rest.
A higher deductible means more out-of-pocket expense in the event of a claim but cheaper insurance. Conversely a lower deductible means less out-of-pocket expense in the event of a claim but more expensive insurance. This is because the lower deductible is putting more cost responsibility on the insurance company. So weigh up your options and if you think you can afford to cover a £500 / $1000 claim out of your own cash, put that in as the deductible and your premium will plummet.

3. Don't hammer the phones or web for quotes.

Sure you want to compare car insurance quotes but each time you phone a company up or apply through their website to get a quote, they will ding your credit report with a query. Too many queries and your credit score goes down. As little as this should matter to the cost of your insurance, if your credit score goes down, your car insurance goes up. To compare quotes without affecting your credit rating, you can use a car insurance comparison website as these compare quotes from a panel of insurance companies in a single search.

4. Just because you're renewing doesn't mean it's the cheapest.

Check your premium with a couple of other companies each time you come to renew. Don't assume your current premium is still the cheapest. More often than not, the same company will gently increase existing customer's premiums to cover the cost of discounted offers for first-time-buyers. Call your insurer and you might be able to talk about moving to a different company; often you'll be put through to a customer retention specialist who will have access to better deals than the first-tier phone operators. From there you might have a bargaining chip. Be careful though - if they call your bluff, you might price yourself out of the market.

5. Do you live in the same place - for insurance purposes I mean?

Ask about address re-regioning, re-zoning or re-allocation. Companies often re-allocate their risk boundaries and consequently their customer's addresses. They typically won't tell you if the premium has changed unless you ask. Of course this could also mean your car insurance has gone up, not down.

6. Multiple policies gives multiple discounts

Most insurance companies will give you additional discounts if you have more than one policy with them. For example if you have your home and car insured with them, both will be discounted by some amount. You need to do some homework here because if you find cheaper car insurance quotes elsewhere and move to another company, any discount you were getting on your home insurance will vanish and that premium will go up. Did you save enough with the new car insurance company to cover the increased premium for your house at the old one?

7. Web vs. bricks and mortar

If you ignore insurance brokers, there are two types of insurance company. Traditional bricks-and-mortar companies are those who have big offices and locations all over the country / world where you can actually go and talk to someone face-to-face. Web companies are those who have call centres and one central office where you can only ever speak to someone on the phone. They both have their advantages and disadvantages. Web companies don't have to pay for buildings all over the place so their fixed costs are lower which can translate into discounts. Bricks-and-mortar companies have offices where you can go and beat your fist on a desk in front of someone, but those assets cost more. When shopping around, consider both types - you really shouldn't always go for one or the other. In some cases, bricks-and-mortar can be cheaper for one type of insurance and more expensive for another. Cue the next tip:

8. When multiple policies DON'T give multiple discounts

Insurance is a strange business. I used to have my house, car and bike insurance all with one company. When we got a second car, they wanted nearly double the premium for it. I shopped around and ended up with a web insurance company. Figuring they had a good deal, I asked about my motorbike and for that they were three times more expensive than the old lot. Long story short - car and house are with the new company. Bike is still with the old company. I've no idea why there are such discrepancies but it always pays to shop around.

9. Modified car doesn't necessarily mean high premiums

Typically, if you modify anything on your car, most insurance companies will jack the rate up. At the time of writing there was at least one insurer in the UK who had seen the light. Adrian Flux Insurance were quoted in Max Power magazine in 2008 as giving slightly lower premiums to people with heavily modified cars. Their rationale? If you've poured money into your ride to customise it, there's a good chance you're going to take more care of it than Joe Average with his crappy Vauxhall Astra / Geo Metro (delete depending on country). In July 2009 they confirmed this with statistics showing that modified car drivers are 20% less likely to be in an accident.

10. Alarms and physical locks

In England, discounts are still given on car insurance if you have a Thatcham-approved alarm fitted. This is an alarm system tested by the Thatcham labs to determine its effectiveness. The problem is that most people are oblivious to car alarms going off now. At most, they're a deterrant. The truth of the matter is that if you have a desirable car, an organised gang can have it on a boat out of the country before you even know it's gone. This happens a lot to high end Mercedes, Rolls Royce, Range Rovers and Bentleys. Cars will be targetted, and when the opportunity arises, they'll be lifted using a lift truck and then transferred to a lead-lined shipping container on the back of a truck close by. That will take it to the nearest docks, stuff it on a cargo ship and it'll be gone. The lead lining is to soundproof the container as well as to cut off any tracking radio signal from an advanced alarm system.
Of course if you're driving around in a Ford Mondeo, you probably don't have to worry about this happening to you.
Crook locks, The Club and various other physical locks are a good idea if you remember to use them. It's no good having one of these lying in the passenger footwell - it won't protect you from anything down there. Most insurance companies don't recognise these as discountable items though. So whilst they're good visual deterrants, they won't get you cheap car insurance. (Because the insurance company can't guarantee that you will use it).

11. Protect your no-claims discount

Still an almost unheard-of idea in America, no-claims discount takes a percentage off your insurance each year, normally to a maximum of 60% based on never making a claim. If you get to full no-claims, you can then pay an extra amount each year to guarantee that discount even if you make a claim. In America, no-claims doesn't exist. There are so many fees and charges to cover lawyers fees that it's almost impossible for them to give no-claims discounts. For example, 70% of my annual car insurance bill in America doesn't cover me or the car, it covers me against being sued by someone for splashing them with a puddle or throttling them with a seatbelt.

12. New or used?

It sounds obvious but this one is often overlooked: there is a very tangible difference between new and used when it comes to insurance prices. Do you really need this year's model? What does it have that you can't live without, that last year's model was missing? Sometimes people get so stuck in the 'new car' train of thought that they forget about the followon costs. Not only is it almost always cheaper to buy a used vehicle, but because it's used, the car will attract a cheaper insurance premium. In addition, there's a lot to be said for used cars - the original owner has taken the hit on depreciation, the first couple of services should have been done, and the engine and gearbox will be loosening up nicely as everything beds in. I know VWs and Audis used to be a great example of this - they only really ever got into their stride after about 30,000 miles or so. I've not owned one recently so I don't know how much that's changed, but my most recent properly new car - a Honda - still feels 'tight' after 10,000 miles.