- Personal Finance
Car Insurance Tricks of The Trade Exposed
How To Get Cheaper Car Insurance Quotes
Note: Each and every Car insurance company has its own unique risk assessment and value factors of risk differently; therefore the usefulness of these tips will depend on the company you are getting quoted with.
I spent 2 years working within Car insurance and here are some of the tricks of the trade;
1. 3rd Party Insurance Can Sometimes Cost More Than Fully Comp Insurance.
This is particularly evident with younger drivers. Insurance companies suspect that somebody with 3rd party insurance, are likely to have a cheap car and wouldn’t be too bothered about writing it off, a lot of companies decided that these type of customers were actually costing them more money in 3rd party claims, than they were making from them.
2. Lower Mileage = Cheaper Insurance
(However putting it too low may ring alarm bells in the heads of the insurance companies), either they will believe the information is false or that the vehicle will be being left to deteriorate. Warning; If you do put a mileage much lower than your own, then the insurance company will be perfectly within their right to refuse to payout on a claim, if they can prove you have drove more than you said you would.
3. Add Additional Drivers To Your Policy
Young Drivers – Putting your parents on your policy as additional drivers will actually lower your quote; this is providing that they haven’t had any ‘Fault’ accidents (Where it is adjusted to be their fault) or any points on their license. I've seen reductions in premiums as significant as £400, simply for adding parents, who probably won't ever even use the vehicle anyway. I can only assume they do this because it shows that you have a good positive role model for driving.
4. Don't Put Your Vehicle Value Too High
Vehicle Value – Not too high, bear in mind that your vehicle has probably depreciated (Gone down) in value by often 50%+, from when it was new. However don’t put it too low (Under £1000) or else they may feel that you wouldn’t be too bothered IF you did write it off.
5. Fit an Alarm / Tracker
This is common sense, the better security device that you have, the lower the risk and the more peace of mind the insurance company has that it wont get stolen, the more peace of mind they have; the lower your premium will be. Most cars come with a standard fit alarm, make sure you're aware of this, you could buy an even better alarm and technically it will pay for itself in the reductions you will get from your insurance over the years. A tracker likewise would do the same thing.
6. Go Direct
Don’t use a comparison website – comparison websites are middle men and stick their own cut of the profit on top of the actual quote from the insurance company, if you do use a comparison site, at least got direct to the company once you have established which is cheapest for you. It is a good way to get quotes for many insurers at once, so is certainly a good ploy to at least see what the comparison sites say but as i say, if they say that 'X' insurance is the best for you; then give 'X' insurer a ring yourself.
7. Ring Call Centres
Speak to an agent in person – When you ring up and speak to a call centre agent, they will be on your side, they will want your quote to be as cheap as possible because then there’s more chance that you will purchase the policy and then they can get their commission for the sale. Call centre staff are prone to making mistakes, ones which you could profit from, if they quote you an incorrectly low price or give you a discount that they shouldn’t have, then they are legally obliged to honour it and you can take it for the price lower than it should have been. Likewise, should you do 15,000 miles a year and you tell the agent that you do between 10-15k miles a year, then they are likely to either put 10k or 12.5k, what they should really do is force you to be more precise, but often they are quite happy to put the lowest value, this will get you a cheaper policy and technically you have been 100% truthful, your mileage IS between 10-15k.
(The only exception is if they have an online promotional offer, which isn't available with the call center)
8. Tell Them That You Have Got a Cheaper Quote Elsewhere
This is like a secret password, only once they have heard this, are they actually allowed to offer a discount, they are instructed to sell the policy at original price where possible, however once you say that you have got a cheaper quote from another company, then out comes the goody bag of deals and discounts, typical discount rates are anything between 5-20% this can make a big different to what you pay.
9. Remove any Add-ons
Some websites and call centre agents, automatically put extra’s onto your policy, this is based on the psychology off initially quoting you highly and then being able to lower the price multiple times, giving you the illusion that the policy is becoming cheaper and cheaper. ‘Legal cover’ and ‘Breakdown Cover’ are not legal requirements, if you want a cheap policy then strip such things off it
10. Raise Your Voluntary Excess
An excess is the first amount of any insurance claim; that YOU yourself must pay, therefore if your claim is £500 and your voluntary excess is 200, then this means that you pay £200 towards the £500 and your insurance company pays £300. By increasing the excess that you pay, your premium will go down, you could put your excess up to the maximum (Some companies allow £1000), knowing that it would probably be not worth your while claiming, if it came to it. However this would get you a much cheaper premium.
11. Pay For It In One Big Installment
By paying direct debits over 10 or 12 monthly installments, you end up paying an extra 10% on average. Very few people will be able to afford to pay it all upfront, its worth looking into whether you can get a loan which 0% APR, or at least lower APR than the insurance company, this is particularly possible for students
12. Ring Your Current Insurer and Threaten to Leave Them
Only then will you get the best deal; they have some room for discount in order to retain their customers. This is commonly up to 10%, this is 10% off that you would not have been offered had you not have threatened to leave, it just shows that being a fussy customer pays.
13. Settle claims privately where possible
If you have had a simple small bump, it might be worth settling the cost of the repairs yourself, Your no claims bonus can be up to 70% of your premium at maximum, losing this is often not worth claiming, say you claim for £200 repairs and end up paying £100 of this yourself as part of your excess deal, then at renewal; your policy is £200 extra because you have claimed, then you have if anything lost out £100 for claiming and again and again for the next 4 years until it has expired from your policy history.
14. Have you driven a company vehicle?
If so it may be possible to get your Manager to send a letter to the insurance company so that you can prove that you’ve had no claims.
15. Do you have access to another vehicle?
If you do then your premium will actually be cheaper, this is because they feel that you are likely to do less miles in the quoted vehicle.