Car Insurance Doesn’t Have to Break the Bank
Car insurance is a must. But paying over the odds for it isn’t. So how do you ensure you’re not forking out too much for a motor policy? Here’s how.
The average cost of car insurance fell to £589 in the first quarter of 2025, according to the Association of British Insurers — a 5% drop from the previous quarter. However, premiums are still 23% higher than in early 2023, driven by record repair costs, rising labour charges, and more expensive vehicle parts. So, while prices are starting to ease, they remain well above historic levels — making it more important than ever to review your policy and shop around.
Car insurance is essential if you want to drive legally in the UK, but that doesn’t mean you should pay more than you have to. And despite a competitive market with hundreds of providers, many drivers still end up overpaying.
Whether you're buying a new policy or approaching renewal, this guide will show you how to cut costs without compromising on protection.
1. Check the Premium Before Buying a Car
If you’re thinking of getting yourself a new car, check what its insurance premium is likely to be first. People have bought their dream machine before and then discovered they can’t really afford to insure it. Most people check out fuel consumption on their next vehicle before buying it so why not do the same with the insurance? You could find yourself having to cancel the vehicle purchase or, worse, sell it straight away. Either way, that’s going to be money down the drain.
2. Compare Cover Options and Prices
When looking for a quote for a new (to you) car, explore the different cover options available. Cover can vary widely. Fortunately, there are several price comparison websites that will help you decide what is a reasonable price for the cover you need. Armed with that, you can contact a shortlist of providers to negotiate for the best price. They all want your business after all.
3. Always Be Honest with Insurers
It might be tempting to omit to tell your cover provider something that might increase a premium but don’t go there. If you have to make a claim, the insurer will make all sorts of checks before paying and if they discover that you had an undeclared speeding fine or have modified the car without declaring it, they simply won’t pay out. You will be left with a potentially huge damages bill that could so easily have been avoided.
4. Don’t Accept Automatic Renewals
Many insurers will contact their customer at renewal time and say ‘we’ll automatically renew your cover, you don’t have to do a thing’. That all sounds convenient, but it might not be saving you any money. The premium could have gone up and even if you notice this, you might think it’s not worth the bother of calling up about it. So do it — call your insurer and let them know you’ve found cheaper quotes elsewhere. They might be prepared to come down a bit to keep you as a client.
5. Be Ready to Switch Providers
Insurance companies often count on customers ignoring price increases or sticking with the same policy out of convenience. But if you notice your premium has gone up, don’t hesitate to challenge it. Call your provider, highlight cheaper quotes you’ve found elsewhere, and let them know you're willing to switch.
Changing insurers is usually quick and straightforward, and if the savings are significant, switching is well worth it.
6. Consider a Telematics (Black Box) Policy
A telematics policy often referred to as a black box could be a great money-saving option, especially if you’re a new or young driver. A small device is fitted to your car to monitor driving behaviour, such as speed, braking, and time of travel. Insurers use this data to assess risk, which can help lower your car insurance premium if you drive safely.
Some drivers feel uneasy about being monitored, likening it to a ‘Big Brother’ setup. However, if you’re confident in your driving habits and want to be rewarded for them, telematics insurance could be well worth considering.
7. Install a Dash Cam
Likewise, dash cams can attract discounts from cover providers, although not all insurers do this. The dash cam (dashboard camera) video records the road and traffic around you, and these are liked by many insurers. They can help to prove you weren’t at fault in the event of an accident which could save your insurer from having to pay for damages to you or someone else. They are becoming increasingly popular, especially with high mileage drivers.
8. Park Off-Road if You Can
One of the questions you will be asked when applying for car insurance is ‘where will the vehicle be parked at night?’. If you answer ‘on the street’ you will almost certainly pay more than if the car was tucked away somewhere safer where there’s less chance of it being damaged, stolen or struck by another vehicle. Clear out your garage and keep your car in there or at least try to ensure it's parked on your land overnight such as on a driveway.
9. Remove Unnecessary Extras
Added into many policies will be an array of items of cover that you might not need. These include European driving cover, additional driver cover, legal expenses, personal accident, lost keys and use of a courtesy car. You might consider some or all of these items unnecessary for your particular lifestyle, so get them removed. The insurer is more than happy for you to have them there, so they won’t suggest it. You’ll find the premium lowering as each item comes off.
10. Buy Your Policy Early
Although this is not an exact science, studies have found that being organised and getting your premium sorted and paid for in advance of its renewal day can actually lower the price. Starting the process of buying new insurance three weeks early not only gives you a greater choice of insurers, but the premium will likely be cheaper too. Experts think this might be down to insurers preferring to deal with organised people rather than last-minute ‘rushers’. Also, if you’ve left it late you’ll have less time to shop around and might have to take the first thing offered.
Bonus Tip: Check the Car’s History Before You Insure It
Before looking into the insurance associated with any used car you wish to purchase, it’s essential to get a full car history check. A MotorCheck report, available for just £9.99, can uncover issues like outstanding finance, mileage discrepancies, theft records, and MOT history.
These factors may not only affect your buying decision but could also impact your ability to get insured or make a successful claim later. While it won’t directly reduce your premium, a history check helps you avoid costly surprises, making it a smart move for anyone looking to get real value from their next car insurance policy.
Whether you're a new driver or a seasoned motorist, these practical tips can help you cut costs and get better value from your next car insurance policy. Getting the best value doesn’t mean settling for less cover — it means making smart, informed choices. Follow these tips, run a history check before buying any used car, and review your policy before it renews to stay protected without overpaying. For even more useful insights, don’t miss the FAQs below.
FAQs on Car Insurance Savings
Still have questions? Check out these frequently asked ones below.
How can I get cheaper car insurance in the UK?
You can reduce the cost of car insurance in the UK by comparing quotes from multiple providers, selecting only the level of cover you truly need, and removing any optional extras you won’t use. Choosing a telematics policy, driving safely, and starting your search a few weeks before your renewal date can also result in cheaper premiums.
Does paying annually save money on car insurance?
Paying for car insurance in one annual payment is generally cheaper than paying monthly. Monthly instalments usually include interest or finance charges, which means the total cost over the year will be higher than if you pay in full upfront.
What is the cheapest type of car to insure?
The cheapest cars to insure typically have small engine sizes (under 1.4 litres), are fuel efficient, have low repair costs, and strong safety ratings. Vehicles with lower power output and basic features tend to fall into the lower insurance groups, making them more affordable to cover especially for first-time or younger drivers.
Does a dash cam lower car insurance premiums?
Installing a dash cam in your car may help lower your car insurance premium. While not all insurers offer discounts, having video footage from a dash cam can support your case in an accident, reduce the risk of disputed claims, and make you a more attractive policyholder to some providers.
How early should I buy insurance to get the best price?
To get the best price on car insurance, it's advisable to buy or renew your policy around three weeks in advance. Drivers who plan ahead are often seen as lower risk, and quotes tend to be more competitive compared to last-minute buyers who may face higher premiums.
What factors increase your car insurance premium?
Car insurance premiums can increase for several reasons, including having recent accidents or driving convictions such as speeding points. Modifying your vehicle, living in an area with higher crime or accident rates, and driving high annual mileage can also raise your costs. Additionally, certain job titles and professions are viewed as higher risk by insurers and may result in higher quotes.
Can new drivers reduce their car insurance cost?
New drivers can reduce the cost of car insurance by choosing vehicles in low insurance groups with small engine sizes, opting for telematics (black box) policies, and adding an experienced named driver to their policy. Avoiding unnecessary extras and shopping around early before the policy start date can also help bring premiums down.
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