35 tips to help you lower the cost of your car insurance

If you’re looking to renew your car insurance, you’ve probably already noticed that your premium has jumped up compared to last year.

You’re not alone: car insurance prices have increased by an average of 58% in just 12 months, hitting an all-time high of £995 for a comprehensive policy in Q4 2023. What’s more, some drivers are being hit much harder than others, particularly younger drivers and those with larger or more powerful vehicles.

Even as inflation falls, car insurance costs in 2024 are projected to climb further, albeit at a slower pace of around 10%). This anticipated increase is yet another blow for drivers already struggling to keep their heads above water during the cost of living crisis.

So, what’s behind the sudden increase? And is there anything you can do to cut the cost of your premium? In this article, My Motor World take a closer look at the causes behind the recent rise and share 35 actionable tips for slashing the cost.

Why have car insurance costs gone up so much over the past year?

It’s thought that the rise has been driven by a major increase in the number of insurance claims. This increase is thought to have been exacerbated by a combination of factors, including changing driving habits after the pandemic, the damage inflicted by extreme weather and potholes, and an increase in cases of car theft, particularly for high-end vehicles.  

Not only are there more claims, but the cost of paying out on them has also risen. Inflation, supply chain issues, auto parts shortages, and the high cost of parts for electric vehicles have all increased the cost of repairs for the insurer.

The higher volume of claims also means insurers are having to spend more time and money on admin. Car insurance providers are businesses just like any other, with utility bills, rents, and wages to pay. So, they’ve felt the impact of inflation on these necessary overheads, too.

When you put all of this together, it means insurers are facing much higher costs, which they then pass on to customers in the form of higher premiums.

Who has been hit hardest?

Because of the way insurers calculate risk, certain groups and car types have seen their premiums go up by a lot more than others. So, which drivers and car types are facing the highest premiums, and why?

Why car insurance premiums have risen for SUVs and fast, powerful cars

Larger, faster, and more powerful cars tend to fetch much higher premiums, while smaller cars tend to be cheaper to insure. According to research conducted by GoCompare in 2023, cars like the Tesla Model-Y, the Mercedes-Benz GLE, and the Land Rover Defender are currently among the most expensive vehicles to insure.

These cars are likely more expensive owing to the higher cost of maintenance and repairs, which in turn pushes up the cost of the claim for the insurer. Some have also speculated that these expensive and powerful cars are also at a higher risk of being stolen.

So, which cars were the most affordable to insure? According to the GoCompare data, the cheapest cars included the Toyota iQ, the Fiat Panda, and the Suzuki Alto – all small, reasonably priced vehicles that tend to have lower running and maintenance costs.

However, there are exceptions to this pattern, with speedy roadsters like the Mazda MX-5 and Porsche Boxster both appearing in the top ten cheapest cars. It just goes to show the complex nature of car insurance pricing.

Why car insurance premiums have risen for young drivers

Younger drivers have always had the most expensive premiums, but it seems the recent rise has hit them particularly hard. Drivers under 25 have seen their premiums rise by 66%, while drivers over this age have seen an average price increase of 58%.

This is most acute for those aged 20 and under, who have seen prices rise by over £1000 in just 12 months. The average 18-year-old motorist now faces paying over £3000 to get behind the wheel of their first car (Confused.com).

The reason for this is likely to be down to an increase in claims from younger drivers. This may be a side effect of the pandemic: younger people weren’t able to drive as much during lockdown, which meant they missed out on several months’ worth of valuable driving experience. That may have fuelled an increase in accidents and claims when they got back on the road in 2022 and 2023.

35 ways to get cheaper car insurance

Getting a hefty renewal bill can be pretty frustrating, especially when so many of the factors that decide your premium are beyond your control. The good news is that whatever your situation, there are always ways to cut the cost of your car insurance – sometimes by hundreds of pounds.

We’ve shared 35 tips and tricks you can use to save money on your premium, whether it’s up for renewal right now, or later this year. We’ve also shared some big-picture tips you can follow to help save even more money on next year’s insurance, too.

How to get cheaper car insurance if your renewal isn’t due for several months

These tips take some time to implement, so they won’t be much help if you need to renew your car insurance right now. But, if your renewal is still a few months off, they could help lower the cost when the time comes.

  • Maintain a good credit score: Insurers often use credit scores to determine premiums, and comparison sites will run a soft credit check when giving quotes. A higher score can lead to lower rates.
  • Drive safely: It might sound obvious, but having a clean driving licence can significantly reduce your premium.
  • Cut back on driving: Walking or getting public transport where you can helps keep your car’s mileage down, which can lower costs.
  • Choose a car that’s affordable to insure: Insurance costs vary by car model, so if you’re thinking of getting a new car this year, research the average insurance cost and look up some quotes to see how much it will cost.  
  • Keep up with car maintenance: A well-maintained car is less likely to break down or develop a fault that may lead to an accident.
  • Take driving courses: Certain qualifications, like Pass Plus, may help lower premiums for newly qualified drivers.
  • Register to vote: Being on the electoral roll can boost your credit score and lower the cost of your premium.

How to get cheaper car insurance if your renewal is due in the next four weeks

Now’s the perfect time to start shopping for quotes! The clock is ticking, so use these tips to ensure you get the best price possible.

  • Renew early: Car insurance costs rise the closer you get to your renewal date. According to Money Saving Expert, the ideal time to renew is around 20–26 days before your premium expires, as this is when you’ll get the cheapest quotes.
  • Shop around: Most policies run for 12 months, and your insurer will contact you with a renewal quote around a month before the policy expires. If you haven’t opted out of auto-renewal, the policy will renew on the date stated in the offer at the quoted price. However, you can usually get a better deal elsewhere, so it’s always worth shopping around.
  • Use price comparison tools: Comparison sites are great for quickly comparing different deals, but be sure to try a few different tools, as they may return very different results.
  • …but don’t rely on comparison sites alone: Some insurers, including Direct Line or NFU Mutual, have opted out of appearing on comparison sites. So, be sure to explore every option before making a final decision.
  • Search using incognito or private mode, and clear your cache and cookies: This may help prevent insurance companies and comparison sites from tracking your activity and hiking prices in response.

How to get cheaper car insurance if your renewal is due now

While it’s always better to renew your policy a few weeks before it expires, there are still lots of things you can do to cut the cost if you’re buying last minute, including:

  • Check for discounts: Some insurers might offer discounts for key workers or other groups.
  • Pay annually: Paying your premium in full annually can reduce overall costs compared to monthly payments. If paying in full isn’t an option for you, look closely at the credit options offered by the insurer and watch out for hidden fees and charges — you may be better off finding cheaper credit elsewhere and spreading the cost that way.  
  • Go paperless: Some insurers will offer a discount as an incentive to ditch paper statements.
  • Go online only: Some insurers offer self-service online-only policies that you manage yourself via an app or website, rather than through customer service agents. This can cut costs for the insurer — and for you.
  • Bundle policies: Combining care insurance with other policies from the same insurer, like home or contents insurance, can net you an overall discount.
  • Increase deductibles: Increasing the excess usually lowers the premium, but make sure you can cover the cost if you need to make a claim.
  • Tweak your job title: Making a small change to the wording of your job title can make a huge difference to your premium. Try using MoneySavingExpert’s insurance job title tool to see how much you could save. Just remember to be honest and choose a title that is close to your actual role.
  • Store your car in a garage: Keeping your car inside a garage rather than on the street can lower your premium, so if you have one, use it.
  • …or a driveway: Parking within the boundaries of your home, rather than on the street, can cut the cost dramatically.
  • Adjust the estimated annual mileage: Very low mileages may increase the premium because they suggest to the insurer you aren’t getting much driving experience, while very high mileages can increase it. Try adjusting the mileage to see if it changes the result and try to find the sweet spot. But remember to be honest — don’t massively under- or overestimate your mileage, as this may invalidate the policy. 
  • Negotiate directly with the insurer: When your insurer offers a renewal quote, contact them directly to see if you can negotiate a better deal.
  • Add or remove drivers: As counter-intuitive as it might seem, adding other experienced drivers in your household to the policy can bring down the overall price, especially for younger drivers.  
  • Consider telematics: It might not be right for everyone, but some drivers can save a lot by consenting to have a telematics device installed on their vehicle — especially younger or newly qualified drivers.
  • Check cashback sites: While it’s not strictly a discount, you could get money back on your car insurance by using an affiliate site that offers cashback.

What to do after renewing your car insurance to sabe money next year

After the ink has dried on your new policy, it can be tempting to put it away and forget about it for another year. But, before you do, there are a few things to bear in mind to set you in good stead for next year’s renewal.

  • Re-evaluate regularly: Review and adjust your coverage as your circumstances change. Certain life events — like turning 26, moving to a new area, getting married, or landing a promotion at work — could all have an impact on your policy.
  • Add extra security: Installing anti-theft devices can reduce the risk of loss for the insurer, lowering your premium.
  • Avoid gaps in coverage: Maintaining continuous insurance coverage can qualify you for lower rates (and not to mention, it’s the law).
  • Avoid major car mods: Don’t make any modifications that could render your car uninsurable or increase the premium. Even seemingly small modifications, like adding tinted windows, can have a big impact on your policy, so do your research and think carefully before committing to any modifications. Even just adding specialised paintwork could increase your premium by as much as 15%!
  • Get your car serviced regularly and keep it maintained: Failing to carry out necessary repairs in a timely fashion could void your insurance. Regular maintenance will also make your car safer, reducing the risk of having to make a claim or disclose an incident to your insurer.
  • Get your MOT certificate on time: Not only is this the law, but it’s also a requirement for keeping your car insurance policy valid.
  • Keep shopping after renewal: You are entitled to switch to another insurer mid-way through your contract — you don’t need to wait until the renewal period. And, if you can bag a better deal elsewhere, you will be entitled to a refund on any remaining months on your policy. However, bear in mind there will normally be a cancellation fee to pay, and you can lose your no-claims discount for that year, so factor this into your calculations to make sure switching is worthwhile.  
  • Protect your no-claims discount: Even one year without a claim can significantly decrease costs, with the average driver’s car insurance bill falling by £745 after one year of NCD. So, drive safely and try to protect it!
  • Follow the news: While prices are expected to stabilise in mid-2024, there’s no guarantee that another price hike isn’t on the way next year. So, keep an eye on the latest news to see when prices are rising or falling. This way, you can lock in a good deal before the opportunity passes.

While steep price hikes can be frustrating, these 35 tips should help you hold on to more of your hard-earned cash next time your renewal is due.

My Motor World is one of the UK’s most trusted car parts retailers, offering over 70,000 products for a huge range of makes and models.

Once the second-largest chain of motoring stores in Britain, Motor World has been a fixture on UK high streets for over 25 years. And, the brand is now offering the same great shopping experience online.