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How to reduce car insurance in the UK: 11 simple steps

Whether you’re a young driver or somebody with many years of experience, we’re all looking for cheaper car insurance. Here are eleven steps to reduce your insurance premium and possibly save hundreds.

simple ways to reduce car insurance cost

How to reduce your car insurance costs

Quite rightly, car insurance is not a product that drivers can choose to do without. Because of this, it means that companies can charge you a fortune. As I’m sure many of you are aware, due to a change in legislation, our policies have increased in cost over the last few years.

If you only take one piece of information from this post, then remember this. NEVER, and I mean NEVER automatically renew your car insurance. Nearly every insurance company will automatically renew your contract for “your convenience”. Loosely translated, this means they hope you can’t be bothered to change, so they’ll charge you extra. Even if you think your renewal price is reasonable, check around.

Black box insurance

If you’re a new driver, a good way to reduce your motor insurance premium is by installing a black box into your car. This gives your insurer the ability to monitor your driving more closely and they can see how good a driver you really are. And if you’re trustworthy, your car insurance will come down.

Of course, drive recklessly and expect to receive a higher premium. 

Opt for a smaller engine

Many people believe that the cost of your car insurance is related to the value of your car. However, in most cases, it depends on the car’s performance. The faster a car is, the higher the insurance group is and the higher your car insurance premium will be.

If you can, try choosing a car with a smaller engine. The slower the car is, the cheaper your policy should be, as insurance companies think you are less likely to drive at high speed everywhere. Plus, your car will be less desirable to thieves.

Also worth reading

If you’re considering selling a car, which car buying companies pay the most?

Choose the right level of cover

If you’re new to car insurance, you may not be aware that there are 3 different levels of cover available. As you ask for a quote, you will be asked if you want the following cover:

  • Third party
  • Third party fire and theft
  • Fully comprehensive

Third party

Third party is the bare minimum you need to drive on UK roads. If you were to have an accident caused by you, your insurance company would pay out to anybody else that may have been involved and your passengers. The only person that wouldn’t receive anything is you. That would mean you would have to pay for any repairs to your car. Of course, if another person were at fault, you would receive compensation.

Third party fire and theft

This cover offers the same level as above, except you will also receive compensation if your vehicle is stolen or damaged by fire.

Fully comprehensive

This provides far more protection than the above and you should be covered for most eventualities. However, different companies’ policies protect against different events, so you need to read through them before accepting.

Which policy you should choose depends on your circumstances. Most people assume that third party insurance will always be the cheapest, but this isn’t always the case.

If you have a car worth several thousand pounds, you should always look at taking out comprehensive insurance, otherwise, one accident could see you lose the lot. But if your car is only worth £100, then third party might be worth considering.

Compare prices

As I mentioned above, never accept the renewal price from your car insurance company. It’s very rare for them to offer you the most competitive price.

Visit as many comparison websites as you can to get a car insurance quote. Usually, it will take around 15 minutes for each. If you’ve used the site before and none of your details has changed, it could take less than 5. Make sure you have all your details on hand – such as vehicle details (obviously) and any previous accidents you may have had – including dates. Not putting these in could cause your insurance to be invalid, leading to a whole world of pain!

Also, remember to check cashback sites too. Be warned though that I have been given a quote by a company and found that they offered cashback for £50. So I then went for a quote through the cashback site, only to find it £50 more expensive!

Once you have price, you can go back to the company that you have your car insurance policy with and negotiate. They’ll often offer you a far better deal.

A company worth visiting for quotes:

Be quick

Sort out your new cover as soon as you can. Usually, you can arrange it up to a month in advance. Believe it or not, the sooner you renew, the cheaper your quote will be. Now I don’t know why this is, but over the last three years, I have tested this out. The closer you get to your renewal date, the more your insurance will be. Don’t believe me? Try it out.

Add another driver

Adding another driver to your policy, especially if you’re a younger driver, can reduce car insurance costs. Of course, this does depend on the other driver, as somebody with a poor driving history will have a negative effect. However, when you’re on a comparison site, try adding a named driver to see if your price comes down.

Get the mileage right

getting the right mileage

Because I was never sure, I wrote down that I covered 10,000 miles a year in my car. I thought that it was better to be safe than sorry. However, I discovered that I was driving only around 6,000 miles a year, so I was paying for more than I needed. If you’re unsure how many miles you drive, check your MOT certificates as they should have the mileage of your car every year.

Increase your voluntary excess

The excess is the amount you pay out if you have to claim in the event of an accident. It will reduce car insurance costs if you increase the excess you pay. And if the accident is not your fault, you can usually reclaim the excess.

Try a different job title

I have a friend who works for Border Force. Customs Officer quotes came back cheaper when inputting what she did for a living than if she wrote Border Force. This article shows how much of a difference job titles can make.

Pay upfront

If possible, try not to pay monthly. Insurance companies tend to charge you extra if you pay in instalments and the APR isn’t low. It may even be cheaper to pay with a credit card if you can pay the balance off within a couple of months.

Breakdown cover? No thanks

You’ll probably notice that most insurance companies now offer the option to tick a box to take out breakdown cover. Of course, they won’t usually provide the cover themselves, but a third party will. This means that the third party will offer the insurance company a nice little fee for their effort. And because they pay this fee, you usually end up paying more.

The cheapest quote I have found is £26 from an insurance company, but this is very rare. Expect to pay anything between £40 and £60. Taking out breakdown cover is usually cheaper if you find it yourself.

So, head to the comparison sites listed above and see how much you can save.


Do I keep my no claims discount if there’s a gap in my policy?

This depends on the length of the gap and your insurance provider. Some companies will allow you to have a gap of up to 2 years, whilst others, 3. You will need to check with providers to see their current policies.

Can I cancel my car insurance after an accident?

You can, but you will not be entitled to any refund for the remaining months you have left to run.

Which car insurance is the cheapest?

Unfortunately, there is no correct answer to this. It really depends on your individual circumstances. What may be cheaper for a neighbour, may not be cheaper for you.

What car insurance do I need to deliver food?

Standard insurance will not cover you. Instead, you will need to have Hire & Reward (H&R) insurance in place.

Will car insurance cover engine failure?

This depends on the fault, but generally, car insurance will only cover a fault with an engine if it was due to an accident.