Driving in the UK is an expensive business. Apart from the cost of buying and maintaining a car, you have to tax and fuel it and ensure it's roadworthy. You also have to insure it.
Driving on British roads without cover is a criminal offence and you could, in theory, be imprisoned if you're caught. You're more likely to be fined and banned from driving though.
There are estimated to be over one million uninsured drivers on British roads, adding a fortune to the cost of those drivers who do abide by the law, and the police regularly have crackdowns on those who fail to pay up. Remember that even if you do have insurance, it's invalid if you don't have an up to date MOT certificate or the car is legally unroadworthy.
Cover types
There are broadly two types of car insurance for 'average' drivers – those who use their car for social and family reasons and who drive to and from work – fully comprehensive or third party cover.
Third party is a basic insurance that doesn't cover your vehicle if it is damaged. The insurance is there to cover any liability if you are involved in an accident – the repairs to the other driver's car, legal bills and any compensation you have to pay. If you want to fix your car, it's down to you. Most third party products have fire and theft cover too, so if your car is stolen or burnt (often as the result of a theft) then you will get some payout.
Fully comprehensive does what it says on the tin – if your car is damaged then the insurance will pay out, even if the damage is your fault. This is much more expensive, but provides much greater peace of mind.
How cover is priced
Car insurance is expensive, there's no getting around it. Repairing or replacing a car is a costly business for insurers, and the increasing numbers of liability claims for compensation add to the bill.
The cost of your policy will depend on a number of factors. The age and location of the drivers is number one – younger drivers proportionately have more accidents so attract higher premiums. And if you live in an area where car crime is more common, that will be reflected in the policy.
Then there's the type of car – the more valuable, the greater the liability to the insurer. And if it has a large engine, which makes it more powerful, it has greater capacity to do more damage, so the liability is higher.
Your driving history is another factor. If you have held a licence for several years with a blameless record, you'll pay less. Any points on your licence and you'll be hit and a recent ban will really cost you.
No claims
If you've had claims-free car insurance, you'll be assigned a no-claims bonus. Normally, this is recorded as a number of years of no claims – the more years you have, the better. For each year of no-claims, the insurer will knock a percentage off the cost of your premium, which could cut the cost of insurance by half.
No claims bonuses are transferable, so you don't need to stay with the same insurer to take advantage of them. Shopping around will save you a fortune.
Cutting costs
The easiest way of making your insurance cheaper is to shop around. It's a competitive market, and with plenty of providers keen on getting your business a few minutes effort could save you hundreds.
You can just phone around a number of providers to see what deal you can get, but thankfully there's a quicker way to do it. Price comparison sites will allow you to put in your details and get quotes from hundreds of insurers at the click of a button – see HERE for how easy it is.
If you plan on paying your premium monthly, check that the insurer doesn't charge interest on the cost. Some providers charge in excess of 20 per cent for people looking to pay monthly, which really will hit you in the pocket.
You can get reduced premiums if you don't use the car all that often – reduced mileage policies cost considerably less.
There are some more specific schemes that reduce premiums. One insurer has trialled pay as you go schemes, where your cost rises for every mile you drive. Another is fitting tracker devices to the cars of young drivers and applying the premium on the basis that they don't drive late at night. If they do need to do so, a one of charge is debited from their bank account. This product has proved amazingly popular, so much so that there is a waiting list for trackers to be fitted.
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