Cheapest car insurance in the UK

What affects the cost of car insurance?

There are a number of factors that make car insurance more expensive for one person than another. These can include:

• Your age. Younger, less experienced drivers typically face much higher premiums than those in their 30s, 40s, 50s and 60s. Premiums can start to rise again once you turn 70.
• The make and model of your car. If you drive a car that’s valuable, powerful, or both, you can expect to pay more for car insurance than someone who drives an affordable runabout.
• Where you live. Living in a high-traffic, higher-crime urban environment will typically cost you more than if you live in a more rural setting.
• Your average yearly mileage. The more time you spend on the road, the greater your chances of being involved in an accident. If you’re a low-mileage driver, you’ll pay less for car insurance.
• Your driving history. If you’ve recently committed a driving offence or made a car insurance claim, insurers will assume you’re more likely to have similar issues in the future, and charge you accordingly.
• The type of car insurance policy you buy. There are 3 levels to choose from: third party, third party fire and theft, and comprehensive.
• The provider you choose. Different insurers have different appetites for different types of risk. One insurer could cost hundreds – or even thousands – of pounds more for equivalent cover for the same person. So you should always shop around.

What’s the cheapest type of car insurance policy?

That’s a simple question…with a less simple answer.

As we’ve mentioned above, there are 3 main levels of car insurance

• Third party insurance. This is the minimum legal requirement to drive a car on public roads in the UK. It only covers damage to other people’s cars or property.
• Third party fire and theft insurance. As well as third party cover, this also offers financial protection if your car is fire-damaged or stolen.
• Fully comprehensive insurance. This includes everything that third party, fire and theft insurance covers, plus accidental damage to your own car.

Based on the above, you might understandably assume that third party cover is always cheapest, and comprehensive cover is always the most expensive. But, in practice, that isn’t always the case. Historically, third party cover has been the first choice of higher-risk drivers who are looking to cut costs. The result has been that many insurers have increased costs for third party cover, making it more expensive than even comprehensive cover for some drivers. So we suggest getting quotes for all 3 types of car insurance. You may find you can get a comprehensive policy for less than third party cover.

Who are the cheapest car insurance providers?

The cheapest insurance for you depends on what you’re looking for in a policy, plus other factors such as your driving record, location, age and car. The cheapest car insurance company for one driver might not be the same one for another.

How can I get cheaper car insurance rates?

There are many ways to lower your insurance premiums such as:

• Shop around to compare price. Switch car insurance instead of automatically renewing, especially if you’ve been through any big life changes such as getting married or moving house.
• Only pay for the cover you need. Resist adding optional extras unless you’re certain you need them. Legal expenses insurance and a courtesy car could both be extras you could live without, for example.
• Try a higher excess. Consider raising your excess, which is the amount you have to pay when making a claim before you get reimbursed. A higher excess means lower premiums.
• Build up your no-claims discount. The more years you drive without making a claim, the bigger the no-claims bonus you’ll get on your premiums. In some cases, it might be worth covering costs yourself rather than claiming for relatively minor repairs, to protect your no-claims history.
• Choose your car wisely. High-powered, luxury and expensive vehicles cost more to cover, so stay away from them if you want to save money on insurance. A cheaper car in a lower insurance group will not only save you money at the point of purchase, but will continue costing you less for its entire life.
• Pay annually. If the annual cost of your car insurance is too much to pay all at once, many insurers will let you pay your premium in instalments throughout the year. While it may save you from paying a lump sum, paying monthly typically costs more overall once interest is added.
• Reduce your mileage. You could get a low mileage discount if you reduce the miles you drive. Carpool or take public transport if you can, or plan your errands for one trip per day instead of taking lots of little trips.
• Check for offers and discounts. Cashback sites such as Quidco and TopCashback often offer money back if you buy car insurance through them. You’ll have to wait at least a few months to get the cashback, though. We suggest picking the best policy for you without cashback and seeing if you can get a little extra bonus, rather than basing your decision on how much cashback you can get. You might also be able to get a discount if you’re a member of a motoring club.

Do price comparison sites offer the cheapest cover?

Maybe! You need to bear a couple of things in mind though.

1. Different price comparison sites might have different arrangements with different insurance providers. So it’s usually worth checking at least a couple of price comparison sites to make sure you see the very best deals.
2. Some insurers choose not to feature on price comparison sites. These include Direct Line and NFU Mutual, as well as insurance broker Adrian Flux and a range of other specialist insurers that cater to specific insurance needs.

Price comparison sites usually cover the majority of the market. So if your insurance needs are fairly straightforward and you’re short on time, you’ll probably get a decent deal via a price comparison site. But if you want to guarantee the cheapest quote, or if you have more niche requirements (a classic or high-end car, or a driving history that makes you harder to insure, for example), then you may need to put a bit more legwork into getting the cheapest insurance.

Do I have to switch provider to get cheaper car insurance?

Not necessarily. If you’re happy with your insurer but aren’t happy with its renewal premium, you can try negotiating for a better deal.

It will almost certainly help to shop around and see what competitors are offering first. Having evidence that you can find a better deal elsewhere is more likely to persuade your insurer that they need to fight to keep your business.

If your provider can’t match the price for like-for-like cover from another insurer, but you don’t really want to leave, you could ask if it will instead throw in some optional extras that you’d find valuable.

If that doesn’t work either, then you may have no choice but to switch car insurer to save money. Just make sure to cancel any autorenewal with your current provider. Set up your new policy to start as soon as your old one ends.

How can I get cheap car insurance as a young driver?

One of the unfortunate realities of car insurance is that younger drivers tend to pay more for car insurance than older drivers. That’s because statistically, younger drivers are more likely to be involved in an accident, and insurers see this group to typically be a higher risk.

That said, there are ways to get a good deal on car insurance as a young driver, including:

• Choose your car wisely. High-powered vehicles cost more to cover, so stay away from them if you want to save money on insurance. A cheaper car in a lower insurance group will not only save you money at the point of purchase, but will continue costing you less for its entire life.
• Add low-risk drivers to your policy. You could see lower premiums by adding an older and experienced driver to your policy as a named driver.
• Improve your driving skills. Taking an advanced driving course could get you a safe driver discount with some insurers, as well as reducing your risk of needing to make a costly claim.
• Avoid monthly payments. If the annual cost of your car insurance is too much to pay all at once, many insurers will let you pay your premium in instalments throughout the year. While it may save you from paying a lump sum, the interest that insurers add to monthly payments means it typically costs more overall.

What car insurance traps should I look out for to keep costs down?

If you’re looking to keep car insurance costs down, there are a few things that could trip you up. Don’t risk falling foul of any of these.

• Auto-renewal. This is where your insurer sets up your policy to roll on year after year, taking payment using the same method you used to pay initially. It’s a useful practice to avoid you driving uninsured, but it could cost you dear if your renewal premium is higher than you could get from a competitor. Don’t blindly renew your policy each year. Always get quotes from multiple providers, and switch if it’ll save you money.
• Prioritising price over quality of cover. Price is obviously an important factor when shopping for cheap car insurance, but don’t choose a policy based on price alone. Compare the features, benefits and limits of several policies on the market. Make sure any policy that looks like a total steal isn’t skimping on features that you would find essential.
• Not knowing how your coverage works. Assuming you’re covered for something could come back to bite you if you need to claim and discover you’re not. Check the fine print on your policy before signing up to check exclusions and cover limits.
• Setting a sky-high excess. You can save money by selecting a higher excess in return for cheaper premiums. But if your excess is too high, it may make it too expensive for you to ever make a claim. Set your excess to a level that you can afford if you need to claim.
• Letting uninsured drivers behind your wheel. Only let drivers who are specifically named on your policy, or who have their own policy on your car, get behind the wheel of your car. Even if they have an insurance policy on their own car that covers them to drive other cars, this will probably only be on a third party basis. This means that damage to your car wouldn’t be covered in an accident.
• Making lots of small claims. Every claim you make is likely to drive up future premiums. If the cost of repairing damage isn’t too much higher than your excess, it could be worth getting it fixed yourself rather than going through your insurer. You’ll still need to tell your insurer about the damage (or risk invalidating your insurance), and your premium may still go up a bit as a result, but probably not as much as if you had put in a claim.

Bottom line

The car insurance policy that works for you won’t necessarily work for someone else. And because of this, it’s important you consider your insurance options carefully.

Some factors that affect your car insurance are outside of your control, but there are also factors you can influence. Driving safely, reducing your mileage if possible, paying annually, and shopping around annually, can all help make your car insurance cheaper.

Ultimately, remember that “cheapest” doesn’t always mean “best”. Ppting for the very cheapest cover could mean you forfeit protection in key areas.

Frequently asked questions

• Do I have to get car insurance?

  Yes. To drive legally in the UK – or even to park on a public road – you must have at least third party car insurance.

• Do I have to tell my insurer if I have an accident?

  Yes. Unfortunately, even if you don’t make a claim, simply having had an accident may be enough to push next year’s premiums up. But don’t be tempted to keep schtum about any incidents to prevent this happening. If you don’t tell your insurer about events that affect your insurance risk, it could invalidate your car insurance policy and cost you dearly if you need to claim. Relevant events include accidents, moving house, picking up a speeding ticket, or even changing jobs.

• Will my insurer put my rates up if my circumstances change?

  Maybe, maybe not. Most car insurance policies have a clause that requires you to tell your insurer about key changes in your circumstances. This might include getting married, moving house, changing jobs, or changing the number of miles you drive each year. Depending on the change, you may need to pay an admin fee. The change may also affect your premiums. You could end up paying more if the change increases your risk. If you move to a higher-risk area, for example. But on the plus side, changes that reduce your risk could reduce your premiums and get you a rebate.

Written by

Ceri Stanaway

Writer

Ceri Stanaway is a researcher, writer and editor with more than 15 years’ experience, including a long stint at independent publisher Which?. She’s helped people find the best products and services, and avoid the pitfalls, across topics ranging from broadband to insurance. Outside of work, you can often find her sampling the fares in local cafes. See full bio