Cheap car insurance: compare car insurance quotes

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The cost of car insurance has risen at its fastest rate ever to hit a record high, according to the Association of British Insurers – premiums are now 11% higher compared with the same time last year. With prices expected to proceed to rise, check NOW to see if you can lock in cheaply.

This guide explains the basics of car insurance, what to see out for and exposes how you can slash the cost of cover in six effortless steps. If you’re under 25, check our Youthful Drivers’ Insurance guide for more.

In this guide

Car insurance: The basics

Cheap car insurance: compare car insurance quotes.

At its most ordinary, car insurance covers you if your car is stolen or involved in a road accident. It also protects other road users if you cause harm to their vehicle or property.

The cost of insurance – your premium – is based on how much of a risk insurers perceive you to be. For example, if you are a youngster ready to hit the highway after just passing your test, or you have had more than a prang or two, you will pay more.

However, if you can prove you are not a risk by keeping accident-free and storing your car securely, you will pay much less.

How does car insurance work?

Excesses: What are they and how do they influence claims?

Not to be confused with living the high life during the festive period or a long afternoon at the local all-you-can-eat buffet, an excess – in the insurance sense – is the amount you pay towards any claims you make.

For example, if your excess is Ј250 and you have an accident that causes Ј1,000 worth of harm to your vehicle, you will pay Ј250 and the insurer will stump up the rest.

Be careful when determining your excess. The larger the excess the cheaper the premium, but a large excess may leave you out of pocket if you need to claim.

Third party, ‘third party, fire and theft’ and comprehensive: What is the difference?

As well as understanding an excess, knowing the difference in between the three main types of car insurance is a must:

Third party is the minimum level of cover you need to legally drive or even keep a vehicle that has not been SORN-ed (see Gov.uk for more). It can be the cheapest option but it covers very little, only protecting others on the road, and property like walls, homes and streetlights, from your bad driving.

So, if an accident’s your fault, third party pays for the harm you cause to another driver’s vehicle and their property and protects any passengers. It will not cover you for any harm to your own vehicle so you will be expected to pay this cost yourself.

Third party, fire and theft is an extension of third-party only insurance but also protects your vehicle if it is stolen, or if it catches fire.

Comprehensive is the widest level of cover available. If you have an accident and it was your fault you can claim the cost of repairing your car and any other harm you may cause to a third party. The cover also includes accidental harm, vandalism and usually windscreen repair.

You may be able to drive other people’s cars, albeit this is likely to only be up to the level of third-party coverage. You may also be covered to drive hire cars. These are not standard features so check with your insurer before you buy so you are clear about what is included. (See does my policy cover me to drive other vehicles? for more.)

Other vehicles: Does my policy cover me to drive them and can other people drive my car?

Obviously car insurance will cover you to drive your own vehicle (you have insured) but some comprehensive policies insure you (not the named drivers) – if you’re driving the cars of your friends and family – with their permission of course. Check with your insurer that you certainly have this extension of cover.

This is different to bicycle insurance where most specialist policies will only cover the cyclist named on the policy (however bikes insured on home contents can be lent to family members).

You may also be covered to drive hire cars too. However, if your comprehensive cover permits you to drive other vehicles this is usually only up to the level of third-party coverage – so no theft or fire harm is provided.

No-claims discounts: What are they and do they need to be protected?

As insurers like less risky policyholders, they will prize you if you’re able to go a long time without making a claim. For every year you are claim-free your insurer may give you a discount at renewal.

The more years you can go without making a claim, the larger the discount will be at renewal. For example, an insurer may give you a 30-40% discount if you can go without claiming for the very first year of your policy and then give you an extra 10% discount if you can repeat the trick in your 2nd year.

You can also pay a puny fee to protect your no-claims discount, meaning you can retain your discount even if you claim. It is worth considering, especially if you have a history of making claims. However, an accident is still likely to see your premium rise, regardless of the influence of your discount.

Going abroad: What if I want to use my car overseas?

If you drive your car outside the UK but within the EU (eg, a day journey to France) or other European countries such as Andorra, Liechtenstein, Norway and Switzerland, an EU directive means you’ll automatically get third-party only cover, even if you don’t tell your insurer.

If you extend your journey, you’re likely to have to pay extra – possibly around Ј15-Ј30 more.

Don’t leave behind about breakdown cover. See our utter Breakdown Guide for more.

Buying car insurance

Applying for a quote: How fair do I have to be?

You have to be downright fair when you’re applying for a car insurance quote.

Car insurance is expensive but no matter how tempted you are to say someone else is the main driver, or to pretend you have no points on your licence, never lie.

It can invalidate your insurance and can even lead to prosecution. However, being specific rather than vague about your job (some jobs are considered riskier than others) can help you cut costs. See our car insurance job picker for more.

Got a car but hardly drive it: Do I still need insurance?

Even if you’re only driving your car every now and then it must be insured. The Continuous Insurance Enforcement scheme, which came into force in January 2011, means all cars must be covered – unless they’re not in use and off the road. It aims to crack down on uninsured drivers by matching up the database of cars on the road with insured drivers.

The only way out is to apply for a Statutory Off Road Notification (SORN), announcing your car will never be driven. See Gov.uk for more.

Mileage: What influence does it have on my insurance?

The less you drive, the cheaper your insurance may be. Where possible, attempt to reduce your mileage. This may sound trite, but actually the real key is incorporating the extra insurance cost when you make long journeys, not just the cost of petrol compared to taking the bus or train (see the Cheap Trains guide).

Many simply get a quote for Ten,000 miles per year; MoneySavers have reported that Five,000 brings the cheapest quote – but we haven’t tested this. If you use your car for business travel, always proclaim this rather than just including the business miles as private trips, or the policy may be void.

Accidents: Do I need to tell my insurer if I have a prang but don’t claim?

If you have an accident and harm someone else’s car but determine to cover the costs yourself, rigorously speaking you should still tell your insurer about it.

If you do have an accident and your insurer subsequently finds out about it, it could result in higher premiums regardless as the insurer will consider you more of a risk.

In addition, a problem may arise if you have a 2nd accident and it is found to be related to work undertaken for the very first. If this does happen it would most likely result in non-payment of the claim, rather than cancellation of your insurance or being reported for fraud, but could still end up costing you Ј1,000s.

Switch in circumstances: Do I need to notify my insurer?

If any of your circumstances switch it is significant that you tell your insurer. If you don’t and then attempt to claim, even for an unrelated issue, your entire policy may be invalid.

You should tell your insurer about any switch, even if it’s just your address. This is crucial as it reduces potential problems in the event of a claim. Attempting to get insurance after you’ve had a policy cancelled is very difficult and expensive.

A switch in circumstances includes moving jobs, as insurers believe this can affect your risk. You may also save on insurance if you’re in a stable relationship – for example, living with a playmate rather than listed as single.

And see out for modifications too. For example, putting a tow bar on to your car to pull a caravan or trailer counts as a modification, so it’s vital to let your insurer know you’ve got one. Most car insurance policies don’t cover fastening a trailer as standard so double-check – some may charge you a slightly higher premium.

Youthful drivers: I’m under 25, is there a way I can cut my insurance premiums?

The cost of car insurance for under-25s is pulling down swift but it’s still eye-watering for some. The average price for a 17-22 year-old is Ј1,436. But there are many ways to help cut this cost, including getting specialist youthful drivers’ insurance. For more information see our Youthful Drivers’ Insurance guide.

Now you know the basics of car insurance, go after our step-by-step guide to slashing the cost of your premium, commencing with ten car cover need-to-knows.

Ten ways to cut car insurance costs

Did you know the average driver faces an annual insurance premium of Ј633 with drivers junior than twenty five paying over Ј1,400 for cover? Here are our top ten car insurance cost-cutting tips that can save you Ј100s.

Don’t assume third party is the cheapest

You would expect third-party cover to be the cheapest because it is the lesser cover, just covering the person you bump into and their car. Yet don’t expect car insurance to be logical.

With some insurers the mere fact you have selected comprehensive, which includes your car too as well as fire and theft, means you’ll be assessed as a lower risk (based on actuarial history, which is what an insurer will hold about a particular age group or address, for example, on which they base their premiums).

This can outweigh the fact you get more cover, and make your policy cheaper.

My auto renew quote was Ј210 for 3rd party only. I went to a comparison site and got comprehensive breakdown cover & free car hire with the same company for Ј40 less. Forumite DobbieSloan

Should I get third party or comprehensive cover?

Third-party cover is generally most suitable for those:

With cars worth less than Ј1,000
Aged under twenty five (however also read Car Insurance for Youthfull Drivers)
Without a no-claims bonus
Living in a high-risk area

Comprehensive is a good idea if your car is worth more than Ј1,500, and is more significant the more valuable your car is. Many insurers will only suggest comprehensive cover for cars over a certain value anyway.

A responsible 2nd or 3rd driver can cut costs

It may seem counter logical, but covering an extra driver can reduce rather than increase your cost – in some cases by Ј100s or Ј1,000s. Here are seven quick tips on how to do it most effectively…

Car insurance is all about risk. That’s why it can work. If you’re a high-risk driver and you add someone who is a much lower risk as a 2nd (and/or 3rd) driver, they can bring down the average risk and you may get a cheaper policy.

This isn’t just for youthful drivers. While it works well for youthful drivers (see our Youthful Drivers’ Car Insurance guide) as they are automatically seen as a high risk and know many people, like their parents, who may be lower risk, it can work for anyone. But of course, it’s especially powerful for those with costlier insurance.

The better the driving history and lower the risk, the more influence it should have. Those with a good driving record are likely to help make the most savings, but anyone who’s a lower risk can help. By law insurers can’t discriminate over gender, but age, driving practice and history can make a difference.

This is about trial and error, not logic. Your mum may increase the cost, your brother may cut it, or vice versa. It’s just a question of attempting different quotes and witnessing what happens.

Different insurers react in different ways. One may cut your costs adding your uncle, another may increase it. A quick way to check is by varying quotes on comparison sites – it’s effortless to do, see our top comparison sites list below.

The 2nd driver should be someone who would reasonably drive your car. So don’t add Lewis Hamilton, unless you happen to be his brother (and even then racing drivers are likely a very high risk so I wouldn’t bother) – but your mum, son, best mate or gran should be OK – as long as they would drive the car.

Never add someone as main driver if they’re not. This is known in the industry as ‘fronting’ and is fraud. If you do it and are caught, you can face a criminal conviction and your insurance will likely be invalid.

Here are some successes to get you commenced.

As a youthful fresh driver my insurer wished Ј5,000 but after adding mum and dad it dropped to Ј1,900. @Faevouritexox

Took your advice and added my mum to my car insurance and saved Ј500 #mumstheword. @mazzyb5

Tweak your job description – some save Ј100s

Another quick win is tweaking your job description (legitimately of course). An illustrator is often cheaper than an artist, an editor than a journalist, a PA than a secretary.

Have a play with our Car Insurance Job Picker contraption and see if petite switches to your job description could save you cash. Reminisce, never lie as this will be considered fraudulent. If it worked for you, share your success stories with our forum users.

Thank you @MartinSLewis after rewording my job occupation on car insurance I have managed to save Ј400. @JenStaCreations

I did this too thanks to @MartinSLewis from creative director to marketing manager = saved Ј300+ Crazy world isn’t it? @fabsternation

What if I’m unemployed?

If you don’t have a job, you face a potential fivefold leap in insurance costs by proclaiming you’re unemployed. The same hikes don’t apply to homemakers (housewives/househusbands). If that’s you, say so to avoid a hike in costs.

However, only inject homemaker if you’re genuinely not seeking work or receiving benefits which require you to seek work. Otherwise, it’s fraud. Read the utter MSE News story: Unemployed walloped with high insurance.

Beware paying monthly

A monthly payment plan for your insurance is essentially a high-interest loan. For example, if your premium is Ј1,000 and want to pay monthly, you could pay Ј95/month, which is Ј1,140/year (Ј140 more) at a massive APR of 25%.

So either pay in utter, or if you can’t afford it, use a credit card with a lower APR rate (or better still, a 0% credit card for spending, ensuring your repayments are big enough to clear it within a year).

If paying by credit card, check if the insurer or provider charges a fee for doing so – tho’ the fee is usually less than the interest charged on monthly instalments.