There’s a powerhouse system to sever car insurance costs, its record result is 96p a year for fully comprehensive cover. First harness every web comparison service in the correct order, massively increasing the number of quotes, then grab hidden cashback on top. This is a step-by-step guide on how to do it.
You needn’t be at renewal either, provided you haven't claimed, most policies can be cancelled with a refund; a few do charge penalties, but you’re still likely to save more than their cost. See: Renewals
Courtesy of five TV. Originally from It Pays To Watch!
Ten Second Summary
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Lower your risk category See Step 1 |
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Combine comparison sites for the best search See Step 2 Top 4: MSP*, GoCompare*, Confused*, CompareTM* |
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Get cashback and haggle See Step 3 |
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Bookmark next years renewal See Step 4 |
Step 1: Ensure you're getting the correct cover
Insurance premiums (the name of payments made to insurance companies) depend on the insurer, the level of cover and how risky you're perceived to be. Therefore start by defining your cover and ensuring you’re as low a risk as possible.
Full information on this, including whether to go for Comprehensive or Third Party insurance and picking an excess level, are in the special additional Car Insurance: picking your policy article.
Beware monthly payment plans
Beware 'pay monthly' options - usually the insurer actually just loans you the annual cost and then charges interest at hideous rates on top. So either pay in full, 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.)
Tweaking your job description to save money
Insurers decide prices depending on historic risk assessments, and your occupation plays an important part in this. To help we’ve built a fun tool to show the riskiest jobs and see if small tweaks to you job description could save you cash.
Step 2: Correctly combine comparison sites
Comparison sites zip your details to hosts of insurers' and brokers' websites, scraping their data off the screens to report back the cheapest. So be aware they often feed your personal details to insurers (see what insurers may do).
Yet screenscrapers don't all compare the same sites, so the best strategy's to combine them. We've analysed the order that gets you the max. quotes in the min. time (see how the order's picked).
Using the two top comparison sites, you’ll cover 69% of the full search…
Using M'supermkt gives you 54% of the full combined search.
One of the longest running sites, its big strength is its consistently wide range of coverage although it no longer includes the ability to compare quote features. It’s important to double check the voluntary excess too as the default is a high £500.
Average time taken: 5 mins
Quotes returned: 80 from providers searched
Add feedback/read others: M'supermarket Car Ins
Brokers
60
Direct Insurers
37
Using GoCompare gives you 53%
of the full combined search.
GoCompare also has wide coverage, and the added feature of a nifty compare and customise system once you've got your quotes. The marketing follow up is not very clear though, so select the 'please click here' link on the final page if you don't want to be contacted.
Average time taken: 5 mins
Quotes returned: 71 from providers searched
Add feedback/read others: GoCompare Car Ins
Brokers
66
Direct Insurers
29
4 mins
Confused adds 6% more providers to the full combined search above... Total so far 75%
A slightly quicker search and a good number of quotes for modified cars makes this third choice. Although you may get follow up phone calls and emails as there is no overall marketing opt out.
Average quotes returned: 60 from providers searched
Add your feedback/read others: Confused Car Ins
Brokers
53
Direct Insurers
31
Additional Benefit
9
more brokers
2
more insurers
4 mins
Comparethemarket adds 8% more providers to the full combined search above...Total so far 83%
Also good for modified cars and the inclusion of some insurers the others miss. There is a high £500 default voluntary excess to watch out for though, lower it on the quote screen if you want.
Average quotes returned: 41 from the providers searched
Add your feedback/read others: Comparethemarket Car Ins
Brokers
35
Insurers
31
Additional Benefit
0
more brokers
14
more insurers
5 mins each
Searching further sites to those above adds 30 more providers to the coverage... Total so far 100%
If you still haven’t found a deal you’re happy with or want to push the envelope there are many more options to try.
A couple of insurer's, Direct Line* and Aviva*, refuse to be included by any comparison site and can be competitive so it's worth checking these separately.
These other comparison sites between them will add thirty further providers; QuoteZone*, Beatthatquote (via The Independent), MoneyExpert*, Tesco Compare*, Uswitch*. Though there are still more standalone insurers out there.
Additional Benefit
15
more brokers
15
more insurers
Once you've found the cheapest
Once you’ve found the cheapest from the screenscrapers; there are two important checks to make:
Double check the quotes
Click through to the insurance provider's own website to double check the quotes, as to speed up searches some comparison sites make a few assumptions (see what to check).
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Examine the policy's coverage
Check whether it's suitable. So if you want "free car hire" if your car is being fixed, is it included? Plus while you’re there it's worth playing with the policy details to see if you can finesse the price down; look at the excess, and whether adding drivers cuts the cost (see hints and tips article).
This tool by Find* allows you to check the coverage of two different polices side by side.
Specialist cover inc. young driver, provisional & multi-car
If you’re looking for specific cover, the mass nature of comparison sites may not find the very best results. These additional notes should help you cut further chunks off.
(click to expand)
As a first port of call young drivers should always follow the same system, using the comparison services and trying to get cashback. However, if that hasn't cut costs there are further options which may help.
- Pay-As-You Go insurance
There are a couple of policies that use GPS or tracking devices that look at when and where you drive. If you're a low use driver these can cut costs.
Coverbox's* Pay As You Drive cover varies the price per mile according to the time of the day or night you drive. It is currently offering some drivers under 30 a £50 cashback and price match* deal (details will be on your quote if your qualify). A free GPS tracking device is fitted to your car so it can be tracked if stolen and you can monitor when and where you drive on a secure internet site
More Than's Drive Time, Tel 0800 294 8911, (for 18-25 year olds who don't often drive between 11pm and 6am) and i-kube (for 17-25 year olds who don't often drive between 11pm and 5am) base their price on when you drive. There's an extra fee for driving outside the set hours making the cost prohibative if you do so.
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Specific Young Driver Policies
Swinton's Young Driver is worth checking out as it's a bespoke policy, yet just because it's specialist doesn't mean it will automatically be cheaper.
As a more radical alternative YoungMarmalade* is worth a look. Here you get the insurance policy alongside low risk new or nearly new cars on a 2 to 5 year hire purchase or personal contract plan. This can bring the insurance cost down dramatically but obviously you're buying a car at the same time, do the numbers very carefully with this. - Provisional licence insurance
If you're a learner, it often means being added to parents or friends car insurance as an additional driver which can up the cost, and put no claims bonuses at risk. However it is possible to get specific policies just for the provisional driver which protect this, such as ProvisionalMarmalade*. Endsleigh can also quote for learner drivers. - Don’t ‘front’ on your insurance it’s illegal
Young car owners who list parents as the main driver to cut insurance costs are doing what’s called ‘fronting’ and it’s ILLEGAL. It invalidates insurance and can lead to prosecution so don't do it.
However one easy trick to cut costs is to add a good SECOND driver to your policy, even if they’re not going to use the car. It doesn’t always work, so it's a case of trial and error on quotes.
(click to expand)
If you've two or more vehicles between friends or family members in your household (Vans can be included in this but Bikes usually aren't), some providers offer discounts if you insure them all together.
Comparison sites don’t have the technology to do these searches, so you need to compare manually.
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First use comparisons for each car separately
The discounts are usually around 10%, so often it's likely just finding the cheapest standalone insurer will win anway, so always do a comparison first, then try the deals below to compare.
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Get all cars on one policy
Cover two cars and Admiral* will give a 10% discount, cover four or five and you could get a 23% discount. All cars will then be covered on one policy so the renewal date will be aligned to end at the same time.
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Separate policies but still get the discount
Other insurers allow cars to have separate policies but give a discount as long as the vehicles are in the same household. Privilege* give 10% off (until 6 Oct it also has a further 10% introductory discount), Direct Line* 10% off and Aviva* 5% off.
While they say they give reductions, neither Tesco* or Churchill* (who also cover named drivers on another Churchill policy) say how much the discount will be, so check before you buy.
Other tricks to cut the cost
If you aren't a young driver, but still want to look for an even better deal, try some of the following...
- Guarantee to beat your renewal by 10%
If the comparison services above haven’t found a policy cheaper than your existing quote, First Direct says it will beat new customer's renewal quote from their previous insurer by at least 10%, providing your annual premium is over £200 for comprehensive or £120 for non-comprehensive.
- Temporary Car Insurance
It's possible to get temporary insurance for 1 to 28 days, such as to to drive a friends car protecting their policy and no claims. Budget's Temporary Insurance, Insure Daily, TempCover.com* and RAC are amongst some of the available policies.
Quick Q&A
There are two commonly asked questions:
- What's the difference between a screenscraper and a broker?
Brokers and screenscrapers may seem like they’re doing a similar job, as each search a number of different insurers; yet they’re radically different beasts. My favourite analogy for this is to compare it to searching for the cheapest loaf of bread.
Individual insurers are like bakers, your choice is simply to buy its cheapest loaf that suits. Brokers are like supermarkets; they stock a range of bakers' loaves and the price charged depends on their relationships with suppliers. Screenscrapers are like sending someone round supermarkets and bakers to note all their prices. - What happens if my insurer goes bust?
Insurance providers are covered by the same government-backed Financial Services Compensation Scheme (FSCS) as banks, meaning if they go into default, you’re protected.
In the unlikely event it happened, the FSCS will try and find another provider to take over or issue a substitute policy. However, if you’ve ongoing claims, or need to claim before a new insurer is found, the FSCS should ensure you're covered. For more see the Insurance section of the Savings Safety guide.
Step 3: Grab Hidden Cashback and Haggle
By now you’ll know the cheapest available provider, yet you may be able to cut the cost even further.
The top cashback deals
Once you know who your cheapest provider is, you need to check there aren’t any hidden cashback deals, these can be as high as £120. If your second or third cheapest quotes weren’t too much more expensive see if cashback’s available for them too and find the overall winner.
The step-by-step list below takes you through a variety of options to improve your deal.
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Step 1: Check cashback websites
These sites carry paid links from some retailers and financial services providers; in other words if you click through them and get a product they get paid. They then give you some of this cash which means you get the same product, but a cut of its revenue.
Yet be warned, until it's in your bank account, this cashback is never 100% guaranteed, and getting the right policy is always paramount. Therefore never simply choose based only on cashback, see it as a potential added bonus once you’ve picked the right cover.
Those new to cashback sites, should ensure they read the Top Cashback Sites guide for pros and cons before using them. Otherwise use the Cashback Sites Maximiser tool to find the highest payer for each insurer.
Though beware if you've used comparison sites first, the cashback site may not track unless you clear your computers cookies. Further information on deleting or controlling cookies is available at AboutCookies.
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Step 2: Get £25 cashback via comparison sites
If cashback sites don't list your insurer then MoneyExpert* and Independent Compare both pay £25 cashback for polices purchased via their respective sites.
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Step 3: Check special deals
If you can’t get cashback it’s worth noting a few companies have special deals not mentioned by comparison services. These currently include:
The AA: The AA* is offering a £15 discount to those buying its car insurance when they get a no obligation home insurance quote by phone. Get a car quote online first then call up 0800 197 7178 to buy the policy and you should get this discount, although we've been told it could be stopped at any time.
Beatthatquote, via Argos: Argos (which uses the Beatthatquote comparison) is giving a £30 giftcard for buying insurance via its site.
Confused: There are two offers (one only can be given per policy) for buying via Confused, although you need to get a quote via its partner sites: 1000 Nectar points (worth £10); £20 Matalan voucher for Matalan reward card holders. The Matalan card is free but you need to buy the policy in one transactions, eg not save the quote to come back later.
Direct Line: Direct Line* has a '8 weeks free insurance' offer, equivalent to about 15% off, until 3 Jan 2010.
Hastings Direct: Buy insurance directly from Hastings Direct* before 31 Oct 09 and you'll get a £30 fuel voucher. Alternatively call 0800 220 462 and quote code JUICE to get a £10 fuel voucher each month for 10 months.
RAC: The RAC is giving existing breakdown customers £30 cashback.
TescoCompare: Buy your car insurance via TescoCompare* and you'll get a free lost key recovery service for 1 year (RRP £9.99). Read the terms and conditions.
Haggle
The car insurance market is very competitive and companies are desparate to retain business. Therefore once you've got your overall cheapest price get on the phone and try to haggle. There's often massive price flexibility, but be fully armed with the screenscraper's cheapest quotes and any available cashback first.
The first port of call should be your existing insurer, after all if it can beat or even match the best quote it saves the hassle of switching policy. If that doesn't work and you're still in the mood, take it to a broker. For more haggling hints and tips read the full Haggle On The High Street guide.
Step 4: Remember next year
Apply for cover from your existing insurer as a new customer and it’s likely you’ll be given a cheaper price. This is because car insurers like any company will happily profit from apathy if they can. It’s for this reason renewal notifications are sent as near to renewal as possible; as then you’re pressured for time and less likely to try and find a cheaper price.
To avoid being forced to decide quickly, diarise a warning six weeks before your renewal date, so there’s plenty of time to sort out a new provider. Alternatively use the free Tart Alert which sends a reminder text or email.
Get paid to be a mystery shopper
You could also sign up to Consumer Intelligence, a consumer research company, who pays several hundred people a month near renewal, up to £50 to carry out comparisons – and importantly you do not need to buy insurance from any of the companies you’ve contacted. See the It's a Mystery forum thread for full details.
This technique often produces huge savings. Those who normally just accept their insurers renewal regularly see £100s shaved off the cost. And significant numbers of MoneySavers report getting deals for under £100. If it happens to you, or you make a massive saving, please report it in the car insurance super deals thread.
The Record... 96p for a year’s fully comprehensive cover
In October 2009, civil servant and grandmother Barbara Wakerell smashed the old £14 record for using this car insurance system (see MSE News: 96p car insurance).
Policy Price: For Barbara the cheapest was £120.96 from Swinton Insurance for a fully comprenhensive policy, with protected no claims bonus, and including a courtesy car.
Insurer cashback: The company had its own £70 cashback promo on.
Cashback site: She then got a further £50 via using a cashback site.
Glossary
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LINKS THAT HELP THIS SITE (all have a * in above article)
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AA, Admiral, Aviva, Compare the market, Confused.com, Coverbox, Direct Line, Find, GoCompare, Hastings Direct, MoneyExpert, Moneysupermarket, Privilege, Provisional Marmalade, Quotezone, TempCover, Tesco, TescoCompare, Uswitch, Young Marmalade
Explanation (of * links)
Important FSA Note. Referring people to insurers or insurance intermediaries can in some circumstances require FSA authorisation. For this reason, Martin Lewis of Shepherd's Studios, Rockley Road, Shepherd's Bush, London W14 0DA is authorised and regulated by the Financial Services Authority.How this site is funded. Two types of contacts are listed. The first help MoneySavingExpert.com stay ad-free and free to use, as they're ’affiliated links' which invisibly take you via commercial price comparison services like Moneysupermarket or Find, which then pay this site per click. This is up to £15 if after doing a comparison you choose to apply for a mortgage or 0.1% of the mortgage, if you complete through Charcol. This in no way impacts any editorial decisions (what we write). Nor does it cost you anything or change the product. The second type don't help, but are listed so you can choose.
You shouldn't notice any difference, the links don't impact the product at all and the editorial line (the things I write) is NEVER impacted by the revenue. If it isn't possible to get an affiliate link for the best product, it is still included in exactly the same way. For more details read how this site is financed.
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No * Link Available: AboutCookies, Beatthatquote (via Argos), Beatthatquote (via The Independent), Budget, Endsleigh, First Direct, i-kube, Insure Daily, Matalan, Nectar, RAC, Switon
Duplicate links of the * links above for the sake of tranparency, but this version doesn't help MoneySavingExpert.com:
AA, Admiral, Aviva, Compare the market, Confused.com, Coverbox, Direct Line, Find, GoCompare, Hastings Direct, MoneyExpert, Moneysupermarket, Privilege, Provisional Marmalade, Quotezone, TempCover, Tesco, TescoCompare, Uswitch, Young Marmalade
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