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Car insurance costs are at near seven-year lows – but only for those who regularly switch to get the best prices. Yet from January 2022, a rules revolution will see insurers banned from charging renewing customers more than newbies, likely meaning higher prices for those who regularly switch – so check NOW if you can save, even if not at renewal. Our tried and tested system will help you bag a cheap car insurance deal.
1-min read on finding cheap car insurance quotes
Many can save £100s by switching car insurance policy. Here's a quick lowdown if you know what you're doing and just want to find a cheap policy – alternatively, if you need a bit more help, you can read our full guide below:
1. NEVER just auto-renew – instead get quotes from comparison websites. Comparison sites don't search identical insurers, nor give identical prices, so try as many as you've time for in this order: Confused.com*, Compare The Market*, MoneySupermarket*, and Gocompare* (see how we rank 'em).
2. Get quotes from direct insurers and find exclusive MSE deals. Direct Line* doesn't appear on comparison sites, and can be competitive. You also won't find some special voucher deals – see hot deals comparisons miss.
3. Then check to see if cashback sites can beat the quotes you got above. Topcashback* gives £42 when you buy through its comparison, and Quidco* £40. But it's also worth checking if you can then up that amount by going direct to the insurer through Topcashback* and Quidco's* normal sites – here you can sometimes get up to £80 per policy.
4. See if these counter-logical savings work for you. It's worth checking if choosing comprehensive over third party, adding a responsible (often older) extra driver or tweaking your job title can save you cash.
What is car insurance?
Car insurance protects other road users if you damage their vehicle or property. And depending on the level of cover you have, it can also cover your car if it is stolen, broken into, or if you're involved in an accident.
All cars must be insured, unless not in use and off the road (for example, stored in a garage), with a statutory off road notification (Sorn) .
There are three main types of car insurance cover you can opt for:
- Third party. This is the minimum level of cover needed to drive legally, and only covers damage to someone else or their property.
- Third party, fire and theft. As above, but with additional cover in case the car gets stolen or catches ablaze.
- Comprehensive. The widest level of cover available. You get third-party, fire and theft cover, plus if you have an accident and it was your fault you can claim the cost of repairing your car (as well as any damage you cause to someone else or their property).
This isn't a straightforward answer as the cost – your premium – is based on how much of a risk insurers perceive you to be. It's about how likely the insurer thinks you'll be to make a claim – so, for example, new, young drivers will pay more than someone who can prove they've been accident-free for years.
This also extends to the type of policy. You'd naturally assume third-party cover would be cheapest because it's lesser cover, but car insurance isn't always logical.
Some insurers may see you as more responsible if you opt for comprehensive, so price you as a lower risk, giving you a wider level of cover for a smaller cost. There are no hard and fast rules here though – it's a matter of trial and error when getting quotes. But never just check third party if you're looking for the cheapest policy.
Car insurance pricing is changing in January – check NOW if you can save
From 1 January 2022, the Financial Conduct Authority, which regulates insurance, will ban car insurers from charging existing customers more at renewal than they would expect to pay when taking out a new policy with the same firm. Currently, many insurers hike renewal prices for existing customers – this is known as 'price walking'.
Price walking is where insurers increase the renewal price every year for a customer, even though there's been no change in their circumstances, risk level or vehicle. It's often called the 'loyalty penalty' and relies on inertia – the customer opting to pay the renewal cost and stay with their insurer rather than compare prices elsewhere and switch.
Banning price walking is a popular move and is good news for those who don't switch (or do switch but don't want the hassle of doing it). But it could also push up prices for savvy switchers over the coming months.
Our guess is insurers won't just cut renewal prices to match those they charge new customers. They'll drop them and crucially increase new-customer charges to meet in (or above) the middle.
Though this DOESN'T mean there won't still be savings to be made by switching policy from January. There will, as different insurers will have different prices – and new entrants will try to disrupt the market – but the savings overall will likely be smaller.
Rates will likely change before January, so check now while they're still cheap
Prices for car insurance are low right now compared with the past few years. Yet while the new regime officially starts in January, changing the pricing algorithms is a big job, so insurers will likely start to shift prices sooner than that.
If that's right, the clock is ticking and the cheapest prices may start to disappear within days or weeks. So everyone should check ASAP to see if they can cut costs by grabbing cheaper switchers' deals.
Cheap car insurance tricks
While annual car insurance costs are just creeping up from a seven-year low, the average annual insurance cost is still more than £400. Our top tips may save you £100s...
1. The cheapest time to get car insurance quotes is about 23 days before you need the policy to start
Your renewal notice from your insurer will show the new price for next year (and the price you paid last year). It's usually sent around 28 days before your current policy ends. If you do nothing, it'll usually automatically renew at that new price, so always have your renewal date in your diary to take action.
The cheapest time to get quotes is 23 days ahead of your renewal date – cover becomes more expensive the closer you get
Our analysis of over 70 million quotes from February 2020 to February 2021 from the four biggest comparison sites – Compare The Market, Confused.com, Gocompare and MoneySupermarket – showed a policy costs an average of £1,198 a year on renewal day. But 23 days earlier the average is just £694 a year, a MASSIVE £504 difference.
In general, the closer to your renewal date you get quotes, the more of a risk you're deemed to be (we've heard that it can show insurers you're a bit disorganised). But getting quotes too early, for example, 28+ days out, can also push the average price up – likely as fewer insurers will provide quotes that early.
It worked for these MoneySavers...
Renewed three weeks early after your tip. It's gone from a renewal price of £108/month to £51/month [saving £684/year]. Checked the comparisons later and it went back to £100. Happy. Hayley via Twitter
Just did mine (24 days early) – saved over £690 over my renewal price. Cara via Facebook
When getting insurance quotes, it's always trial and error that drives down the price, rather than logic. Plus different insurers respond in different ways, so it's just a case of trying different quotes and seeing what happens. Here's a trick to try...
Adding an extra 'responsible' driver to your policy
It may seem counter-logical, but covering an extra driver can reduce rather than increase your cost – in some cases by £100s or £1,000s. If you're a high-risk driver and you add someone who is a much lower risk as a second (or third) driver, they can bring down the average risk and you may get a cheaper policy.
It just needs to be someone who would reasonably drive your car. Here's a good example, but it can work for anyone.
As I'm a young, new driver my insurer wanted £5,000 but after adding mum and dad it dropped to £1,900. @Faevouritexox
The better the driving history and lower the risk, the more impact it should have. Adding someone with a good driving record is likely to make the most savings, but anyone who's a lower risk can help. By law, insurers can't discriminate over gender, but age, experience and driving history can make a difference.
Warning: Never add someone as the 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 could face a conviction and your insurance will likely be invalid.
An illustrator is often cheaper than an artist, an editor cheaper than a journalist, and a PA cheaper than a secretary – the job title you choose when taking out insurance can sometimes save you cash.
Have a play with our Car Insurance Job Picker tool and see if small changes to your job description could reduce your costs. Remember, never lie, as this would be considered fraudulent. If it works for you, share your success story with our forum users.
If you don't have a job, you face a potential fivefold jump in insurance costs by declaring 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 enter 'homemaker' if you're genuinely not seeking work or receiving benefits that require you to seek work. Otherwise, it's fraud.
Being on the electoral roll is not just about being registered to vote – it can also make a difference to your insurance premium.
Insurers such as Aviva, Direct Line, Churchill, Privilege, Co-op and Endsleigh have confirmed that they use the electoral roll as part of the ID-checking process to combat fraud.
Not being on the electoral roll, or having incorrect information registered, makes it more difficult for insurers to identify you, so they'll probably give you a higher quote or simply not offer cover.
If you're not already on the electoral roll, it's straightforward to do. See our Electoral roll guide for more information, including the all-important how to get on it.
If you have more than one car in your immediate family or household, this could be for you. For some people, discounts for adding multiple cars could save £100s, or even £1,000s in some cases, but for others it could actually be more expensive.
To help, our dedicated Multicar insurance guide explains when to get a multicar policy, how they work and how to get one – even if you have different start dates for each car.
After you've checked the price of separate cover, it's worth checking if you can save by combining them.
We only know of one policy which currently offers home and car insurance on one policy – see Admiral MultiCover. However other insurers offer a discount on new policies to their existing customers. For example, Direct Line*, Aviva* and Churchill all offer discounts on your car insurance if you have another policy with them.
What if my home and car policies have different renewal dates?
For Direct Line, Aviva and Churchill, different renewal dates don't matter as each car and your home will have its own policy and policy number. The insurer will just give you a discount for each policy you purchase – as long as you let it know you're already an existing customer.
With Admiral, although you'll be given a total price to pay, this will factor in the different start dates. So your cover with your existing insurer will remain in place until it renews, at which point you can cancel it and the Admiral policy will take over. You'll get an 'annual equivalent price', as if all were insured for a full year, to help you compare against other providers.
A monthly payment plan for your insurance is essentially a high-interest loan, and can vary from under 20%, to over 40% APR.
For example, if your premium is £1,000 and you want to pay monthly, you could pay £95/mth, which is £1,140/year (£140 more) at an average APR of 25%
So pay in full, or if you can't afford it, use a credit card with a lower interest 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 – though the fee is usually less than the interest charged on monthly instalments.
8. Saving from switching is not just for those at renewal – though you may need to factor in cancellation fees
Many assume switching is only for those at renewal. It's not – you can actually switch at any time. This is important when prices are rising, or if you're someone who recently auto-renewed without doing comparisons to see if you can cut costs. However, if you are thinking of switching mid-year, there are a few things to be aware of:
- If you cancel a policy mid-year and you paid upfront, you'll usually get a pro-rata refund for the rest of the year, providing you haven't claimed. If you pay monthly, you'll just stop paying the old insurer and start paying the new one.
- There will normally be a cancellation fee of about £50 (check what your insurer charges), so your savings from switching should outweigh this to make it worth it. The longer you've got to go on your policy, the more likely you'll be better off switching.
- You won't earn the current year's no-claims bonus if you switch so you'll need to be making a substantial saving to make this work.
If it makes financial sense for you to switch mid-year, call the old insurer to tell it you're cancelling. Ask if it has a notice period, as this will dictate the date you want the new policy to start. Then buy the new policy. Make sure the dates align so that one ends on one day, and the other policy starts on the next day to ensure there's no time when you're uninsured.
Switching mid-year can save £100s, as it did for Andy and Miriam...
You gave us the confidence to challenge our car insurance mid-policy as we were paying £40 a month. Now we're paying £16. Andy
In November my insurance was £1,200. Now, with a little help from turning 25, I have done a mid-year price check and it's £230! Miriam
- If you cancel a policy mid-year and you paid upfront, you'll usually get a pro-rata refund for the rest of the year, providing you haven't claimed. If you pay monthly, you'll just stop paying the old insurer and start paying the new one.
Find the cheapest car insurance quotes
So now you know the basics of car insurance, here are the steps you need to follow to ensure you find the cheapest price possible.
Warning! Changing details between quotes could invalidate your insurance: Small tweaks to your mileage or job title are likely to be okay, but no matter how tempted you are to say someone else is the main driver, or to pretend you have no points, or to underestimate your mileage deliberately to get a cheaper premium – don't. You must be completely honest or it could invalidate your insurance and even lead to prosecution.
Comparison sites are technically insurance marketplaces, as they are allowed to negotiate their own prices with insurers (as long as they don't cost more than going direct).
Therefore it's not just that different insurers will appear on different comparison sites, it's also that different sites can have different prices for the same insurer. So it's best to use at least two, and more if you've time, to maximise your chance of getting the cheapest quote.
Below is our current order of which to try (see how we pick our order explanation for why), though the difference in order is small, so if any of their perks really appeal (see below), as long as you're trying a couple, go for those you like most.
Do note that comparison sites use a soft search of your credit file to return quotes, though this has no impact on your ability to get credit in future.
|Try as many as you can, in this order...|
Official perk info: ONE out of a... £20 Halfords voucher | £20 Domino's voucher | £20 Lidl Plus coupon | 12 IMO 'triple foam' car washes.
Official perk info: Meerkat Movies and Meals. A year's 2for1 on cinema tickets and meals on selected days of the week.
MSE perk analysis: For those who'd use it, and go to the flicks and restaurants, this perk can be worth £100s. However, instead you could grab other perks as you can use our trick to get Meerkat Movies and Meals for £1 for a year.
See our full Compare The Market perk analysis.
|Official perk info: Combination of up to £150 of car repair and servicing vouchers, for example, £30 off MOTs, £5 off wheel alignment work.
MSE perk analysis: Likely better for older cars that need more work. We analysed the value of these vouchers compared with getting work done with alternative garages and found they would be worth up to £70/year (though this may vary depending on prices at your local garage). See our full MoneySupermarket perk analysis.
||Official perk info: £250 'free' excess cover.
MSE perk analysis: Gives good peace of mind, but few will use the free excess in any given year. We value it at roughly £35 a year as that's a typical cost to buy a similar amount of excess cover. See our full Gocompare perk analysis.
|Then, to boost chances of finding a cheap quote further, try...|
|Quotezone* – it's another comparison site, and may have cheaper quotes.|
|Direct Line* – an insurer, rather than a comparison, but you won't find its quotes on any comparisons, so it's worth trying in case it's cheaper for you.|
If you've had a string of claims or accidents, you have a medical condition that affects your driving, or you've four or more points on your licence, you may find it hard to get an affordable quote from a comparison site. Some may find it hard to get cover at all.
If no or few insurers are quoting on the sites above, or premiums are coming back too high, consider enlisting the help of a broker. Search the British Insurance Brokers' Association website to find someone who can help.
Here we list special deals which you won't find on comparison sites. We're not saying they win every time, but they're worth checking. For deals with vouchers, factor in the voucher as a discount, and see if that price beats your best comparison site quote.
|£60 Amazon, Love2Shop or M&S voucher. Admiral car insurance newbies getting a new quote and buying a policy via our link by 11.59pm on 11 December 2021 will receive an email about 90 days after the purchase date. This will tell you how to choose and activate your voucher.|
|£60 credit of 'free' miles. This is a 'pay-by-miles' policy (see how it works) which could be a good bet if you drive less than 7,000 miles each year. Via our link, newbies aged 25-78 can get a £60 credit when buying a policy by 11.59pm on 15 December 2021. Note it won't work if you've got a quote or purchased a policy after using a comparison site where By Miles appears in your results.|
|Multicover policy - where you have your car and home insurance with the same company|
|£90 Amazon, Love2Shop or M&S voucher. Admiral home and car insurance newbies getting a new quote and buying a MultiCover policy – insuring your home, contents and car(s) – via our link by 11.59pm on 11 December 2021 will receive an email around 90 days after the purchase date. This will detail how to choose and activate your voucher.|
If you use cashback sites, you'll know that if you get your car insurance via them they will get a 'lead fee' for sending you on to the insurer. Once they're paid the fee by the insurer, they then share it with you.
This can beat going to the comparison sites above, but do check your quote through a cashback site isn't more expensive – and it's best to think of the cashback as a bonus, rather than 100% guaranteed as sometimes the deal isn't tracked or the cash paid out. These are the two routes to try...
- Route 1: Use cashback sites' own comparisons. There's a version of Confused.com's comparison on cashback sites Topcashback* and Quidco*, where you'll get £42 and £40 respectively if you buy a policy through them. (You don't get the standard Confused perks, as this is a rebranded version of the comparison.)
Yet as we say above, do keep an eye on the quotes you get as you may not get exactly the same prices as you would from Confused's comparison. We did a sample in MSE Towers for car insurance and nine of 17 people got the same price from both cashback site comparisons as Confused, while three got it cheaper and five found it more costly via the cashback site comparisons.
The easiest way to do it is to look at the quotes you get, then take off £42 from Topcashback's cheapest (£40 from Quidco's cheapest), and see which works out cheapest for you.
- Route 2: Find your cheapest insurer then go via a cashback site. This may be more lucrative. Once you know your cheapest insurer, check what cashback you'll get going to it via Quidco* and Topcashback*. You could get up to £80 for a new car insurance policy.
But be careful not to let the cashback tail wag the dog. Choose the right insurer first, then look for cashback. Don't look for the biggest cashback then choose the insurer.
Again, make sure you check the price you're getting through this route is the same as the prices you found from the comparisons you've already done. If it's more expensive, see if the cashback offsets the rise. If not, go with the quotes you got above.
Our Top cashback sites guide has full information on how these sites work.
The current record's 96p for a year's car insurance from someone who went through a cashback site. This is an extreme example, but let us know if it's worked for you or if you've beaten this record.
Step 4: Once you've found the cheapest quote, try to haggle a bigger discount with your existing insurer
Haggling is not a must – especially if you want to try a new provider – but if you're looking to renew with your current insurer it's well worth contacting it to negotiate.
Once you've followed the steps above and got the overall cheapest price, give your insurer a call or use its online chat to see if will beat or match it. Usually it's as simple as asking, but if you're not getting any luck, see our Car and home insurance haggling guide for top tips.
Once you've found the cheapest quotes, there are a few things to check...
Double-check the quotes. Click through to the insurance provider's own website to read the quote thoroughly, as some comparison sites make a few assumptions to speed up searches.
Check the insurance company is registered with the Financial Conduct Authority (FCA). The insurer will usually say it is but always check on the FCA register.
Check if the policy is suitable for your needs and whether you need any add-ons. There are always extras to choose from, so make sure that the policy you've picked only includes the ones you want.
Courtesy car If you couldn't survive without a car if it needed to be fixed, it's best to opt for a policy that has a courtesy car as standard or a cheap add on. Always check what sort of car you might get, how long you could have it for and if you'd get a courtesy car if your car's stolen or written off. Breakdown policy Many insurers include this as an incentive for you to buy, but check the cover carefully as it's likely to be a basic policy (in other words, it usually won't include home start, or onward travel to your destination). It's often possible to upgrade the cover but check if the upgrade price is cheaper than buying a separate standalone car breakdown policy. Protected no-claims discount This usually means you can make a claim and not lose your discount next time you renew (if you stay with your existing insurer). However, do note that protecting your no-claims discount does NOT guarantee your premium won't go up. Legal costs cover This helps recover costs or losses you incur as a result of a claim where you weren't at fault. For example, the excess you have to pay, potentially claiming for a loss of earnings or personal injury following an accident where the other driver's at fault. Key cover This does what it says on the tin – it covers the cost of new keys, for example, if yours have been lost or stolen. Before committing, check if your car breakdown policy already covers you for this.
How to complain about your insurance provider
The insurance industry doesn't always have the best customer-service reputation, and while a provider may be good for some, it can be hell for others.
Common problems include claims either not being paid out on time or at all, unfair charges for changing address, drivers, car or exclusions being hidden in small print. It's always worth trying to call your provider first, but, if not, then try…
Car insurance FAQs
Before getting a policy
Obviously car insurance covers you to drive your own vehicle (that 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 definitely have this extension of cover.
You may also be covered to drive hire cars too. However, if your comprehensive cover allows you to drive other vehicles, this is usually only up to the level of third-party coverage – so no theft or fire damage cover is provided.
If you're the generous sort, you can add other drivers to your policy – known as named drivers – and they'll be covered to drive your car. Even if you're not generous, adding a second responsible driver can also help lower the cost of your cover.
Nothing. One is called no-claims discount and the other is no-claims bonus.
Insurers like less-risky policyholders and will reward you if you're able to go a long time without making a claim. So for every year you're claim-free your insurer usually gives you a discount at renewal.
The more years you can go without making a claim, the larger the discount will be at renewal. For instance, an insurer may give you a 30-40% discount if you can go without claiming for the first year of your policy and then give you an extra 10% discount if you can repeat the trick in your second year.
The more changes you make to your car, barring security ones, the more you're charged. Always tell your insurer about any modifications and whether you made them or not, or it may invalidate your policy (a modification is anything that isn't part of the standard vehicle specification, including factory-fitted optional extras such as alloy wheels).
The exception to this rule is if you've a classic car needing insurance – in this instance, insurers accept modifications as a natural part of classic car ownership and don't penalise you with higher premiums.
Even more savings are there for the taking if you can protect your vehicle by securing it. Fitting an alarm or immobiliser (especially one approved by Thatcham) will reduce the bill substantially.
Comparison sites always assume you own the car you're trying to insure. However, many people drive a car owned by their employer, but have to insure and tax it themselves.
This means comparison sites, while useful for benchmarking prices, don't do the trick. First, try a couple of specialists, then see how prices from the comparisons stack up.
The only insurer we could find that gives quotes online for vehicles owned by companies is LV*.
Go through the quote process and it'll ask who owns the car. The quote you get will be based on this. This by no means translates to LV being the cheapest choice – but it's useful to get an idea of what you should be paying. Give us your feedback on LV.
Whether you just want to temporarily insure your own car, are borrowing a friend's car for the weekend or need to hire a vehicle to move house, it's possible to get temporary insurance for one to 28 days (or for a month via LV).
Most insurers will cover drivers between the ages of 18 and 75 but some set the minimum age at 21. You may also find it difficult to find cover if you have many points on your licence or a long history of claims.
Insure Daily*, Tempcover.com*, Confused.com* and the RAC offer policies.
If you are looking to insure your own car then Flow, from big insurer LV, is worth considering. Cover can be arranged for a month at a time.
It's not just a case of keeping your hands at 10 and two and shifting smoothly through the gears. Insurers will take the following into account:
- The time of day or night you drive (11pm to 5am may cost more)
- Your speed (stick to the limit!)
- Gentle braking reactions (hard and sharp stopping is NOT good)
- Gentle acceleration and cornering (don't treat your local roads like Silverstone)
Telematics providers will charge you more if you speed or start cornering like Sebastian Vettel. In addition, you won't earn rewards if you don't drive responsibly. With insurance so expensive, any money back on your cover should be an incentive in itself.
While your insurer will be following your driving closely, there are relatively few restrictions on when and where you drive. However, some insurers, such as Co-op*, have curfews in place, meaning driving at certain times (usually between 11pm and 5am) could result in a fine or an increase in premiums.
How do insurers rate you on a telematics policy?
Telematics prices your premiums depending on how you drive. A device inside your car monitors your actions behind the wheel, so the better you drive, the less you pay for cover.
Telematics policies have more aliases than a rap group. If you're looking at 'black box', 'smart box', 'pay-as-you-drive' or 'usage-based' insurance then you're looking at a telematics policy.
It works! Forumite vic.star said: "I'm with Insure The Box, a telematics insurer. I paid £980 for my first year (I was 21 when I took out the policy) compared to the cheapest on comparison sites of £1,400!"
The black box feeds data back to your insurer, which takes this into account to reward you; if you can prove you're more Driving Miss Daisy than Fast & Furious, you can get money back on your premiums, high-street shopping vouchers or better prices at renewal.
Be careful when deciding your excess. The larger the excess, the cheaper the premium usually is, but a large excess may leave you out of pocket if you need to claim.
The excess is the amount you pay towards any claims you make. Say your excess is £250 and you have an accident that causes £1,000 worth of damage to your vehicle, you pay £250 and the insurer stumps up the rest.
A few insurers will substantially reduce premiums for a £1,000 excess, so try this when getting quotes. The downside is having to shell out this amount in the event of a claim.
Insurers use this information to help them calculate your premium. The less you drive, the cheaper your insurance, so while you always need to give a genuine estimate to avoid committing fraud, it makes it doubly important not to overestimate as you'll also end up overpaying.
The best method is to look at how much you've driven in the past using accurate data, and if your driving habits haven't changed, put the same figures down. If they have, change the figure accordingly. The easiest ways to find out your history is by looking back at old MOT certificates or service documents where your mileage would have been recorded – just compare one year with the next for how far you've driven.
Managing your policy
If any of your circumstances change it's important to tell your insurer. If you don't and then try to claim, even for an unrelated issue, your whole policy may be invalid.
You should tell your insurer about any change, even if it's just your address. This is crucial as it reduces potential problems in the event of a claim. Trying to get insurance after you've had a policy cancelled is very difficult and expensive.
A change 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 instance, living with a partner rather than being listed as single.
And watch out for modifications. For example, putting a tow bar on 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 attaching a trailer as standard so double-check – some may charge you a slightly higher premium.
This depends on your insurer. Many let you make the changes online (such as Admiral, Axa and Direct Line), but not all (such as Age Co, Hastings Direct and LV).
You'll usually be charged for altering a policy, such as decreasing your mileage, adding or removing an additional driver or removing an 'added extra' such as key cover.
The fee you'll pay (and for which changes) will vary by insurer, but are typically between £10 and £30. You'll usually find changes made online are cheaper than calling.
If you're making a temporary change (such as a short-term reduction in mileage), bear in mind you may need to pay another fee to reverse the changes – so make sure you've calculated the admin fees against the savings you could make.
If you have an accident and damage someone else's car but decide to cover the costs yourself, strictly 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 second accident and it is found to be related to work undertaken for the first. If this does happen it would most likely result in the claim not being paid, rather than cancellation of your insurance or being reported for fraud, but could still end up costing you £1,000s.
Insurance is all about risk, so the more chance providers think you have of claiming, the more they charge. So driving more, or having riskier drivers on your policy, will likely mean you pay more.
So reducing your estimated mileage can result in savings, though for any mid-policy changes you'll usually have to pay a £10-£30 admin fee, so you'd need to factor that in.
As an example, in our tests of 80+ quotes, the average saving dropping from 15,000 to 3,000 miles a year was £155/year – though this is just £13 saved if you've a month left on your policy. Similarly, dropping from 8,000 miles a year to 6,000 only saved an average £24 over the year – just £2/month.
It's potentially a bit of a faff, so you'll need to have many months left on your policy to make it worth it. The alternative is to look for a new policy, as big changes can mean another insurer is cheaper, and you may have been overpaying anyway.
A few insurers let you cancel online, but for most you'll need to call. If you're cancelling just before renewal, there'll be no charge.
If you're partway through an annual policy, there's often an admin fee of about £50 to pay. However, you should be entitled to a part refund of the policy premium if you've paid upfront for an annual policy, provided you haven't claimed since it started. If you pay monthly, your insurer is likely to tell you to cancel your direct debit.
Note that if you're switching insurers mid-policy you won't earn any no-claims bonus for the part of the year with your current insurer, so you'll usually need to be making a substantial saving to make this work.
Clever ways to calculate your finances