Looking for the cheapest car insurance?

Why you should compare quotes on multiple comparison sites.

Most drivers who want to buy cheap car insurance go to a price comparison site like paythroughthenose.co.uk or moneysupermarket.com and select the cheapest policy, or the one that best suits their needs. The overwhelming majority however only visit one site. This is a mistake because sometimes prices for identical policies can differ from one site to another, because each of them have different commission deals with different insurers. This means that very often you might save a great deal of money by looking at multiple car insurance price comparison sites.

Tests show that there is no one major site which is any cheaper overall than the rest. It is just that prices quoted by individual insurers vary; sites may have cheaper prices for one insurance company, but dear prices for another.

Should you buy third-party only car insurance?

There was a time when third party cover was automatically much cheaper than comprehensive. However, insurers found that motorists that bought the cheaper insurance tended to be involved in more, and more expensive, accidents and so they increase the prices. It is now quite common to find little or no difference between 3rd party cover and comprehensive, and sometimes the latter is even cheaper! So, if you are looking for the lowest possible prices, get quotes for fully comprehensive insurance as well.

Insurance is all about risk

All an insurer is interested in when working out the premium is the odds on whether or not the customer will be involved in a claim, and if so how much that claim is likely to be. There are various factors that they use to calculate this risk; some of which you can alter, and some of which you cannot.

Important factors that you cannot alter include the area that you live in, your occupation, your age and your driving experience. You can, however, reduce their expose by paying a larger excess; this is the amount which you have to pay towards any claim before the insurance company has to pay anything. Excesses are usually comprised of two parts; the compulsory one and a voluntary one. Usually, the higher your voluntary one is, the lower your premium. Do bear in mind however that you may have to pay this excess at very short notice, and so it is very important that you pick a sum that you can comfortably afford.

Should you even make a claim in the event of an accident?

If you bear in mind that the average cost of a claim in the United Kingdom has been calculated to be approximately £1600, is clear that if your excesses add up to, say, £500, the insurance company will pay an average of £1100 towards the cost of the claim. If you were paying a very low premium of, say, £300 a year the increased amount that you would have to pay in the future may be less than this sum, in which case it would be worth making claim. If, however, you were a young driver paying a four figure sum every year it might well be worth your while paying the cost of the claim yourself, and avoid losing your no claims bonus.

However; you are under an obligation to inform the insurer of any accidents that you are involved in, whether you pay for these yourself or not! Since the insurer is interested in the future possibility of your making a claim, and since any accident increases that possibility, it is likely that your premium will increase whether you actually claim from your insurer or not! Do you, then, stay quiet about the accident, and pay for it yourself? That is a question that only you yourself can answer!

Cheapest is not always best

You may well find that when you compare quotations some of the insurers that offer the lowest prices are companies that you have never heard of. This is because the majority of companies on price comparison sites are not actually insurers themselves, but brokers. This means that not only the price comparison site will take a commission from the sale of your premium, the broker will take one as well, leaving a much smaller sum available to the insurance company! All companies offering car insurance in the United Kingdom have to be authorised and regulated by the Financial Conduct Authority which operates a compensation scheme in the unlikely event of any of these companies going bust. Also, many of these little-known companies are, of course, well run ethical concerns that will not give you any problems in the event of a claim. Some however are not so well run and you may find difficulties in actually contacting these companies. You should therefore take the wise precaution of locking up online reviews of any company you are going to have financial dealings with, and find out what other people's experiences with them have been.

Beware the hidden extras

If you change your address, or your job, or where you are your car at night, or any other factor which may affect your insurance risk, you are obliged to inform the insurer as soon as is reasonably possible. In most cases you will find that a fee will be charged for them to simply record this information. We have seen fees in excess of £100 being charged for this quick and easy service, while other insurers have charged nothing at all. Before buying any policy, regardless of the reputation of the insurer, you should check all the documentation very carefully and make sure that there are no hidden surprises in there, which may cost you a lot of money in the future!

Pay upfront if possible

Many people who are short of money (and quite a few who are not) preferred to pay for their insurance on a monthly basis. Do bear in mind however that some of the lowest cost insurers will not accept deferred payments, or may do so only if a high deposit is provided. You are almost certainly going to have to pay interest and perhaps other charges too; often these will depend upon your own credit rating and if you are, for instance, a young driver this could create a much heavier burden on you. If possible, always pay for your insurance in one single payment; if your circumstances mean that you cannot do this you may be well advised to try and raise the money in a different way, rather than face excessive charges.