From beep beep to cheap cheap: Compare the best car insurance

What is car insurance?

Car insurance offers financial protection if your car is damaged, stolen or involved in an accident. You pay an upfront premium and, in exchange, your insurer will cover the majority of costs to put unexpected problems right.

In the UK, you can’t legally drive without having at least third-party car insurance. This pays out if you damage someone else’s car or injure someone in an accident that was your fault, but it won’t cover damage to or theft of your own car. There are 2 higher levels of cover: third-party, fire and theft and comprehensive. We’ve set out in detail what you get and don’t get with each type of cover below.

Contrary to what you might expect, comprehensive cover can be the cheapest of the 3. That’s because, historically, higher-risk drivers have tended to opt for third-party cover to try and keep costs down. Ironically, this has pushed up the cost of this type of cover. So, even if you’re looking to keep costs to a minimum, it’s worth comparing quotes for all 3 types. You might be pleasantly surprised.

How to compare car insurance

1. Shop around every year. In the past, many customers were hit with a “loyalty penalty” for just letting their policy renew with the same provider. New Financial Conduct Authority rules mean that insurers can no longer charge existing customers more than new ones. However, that doesn’t mean that the provider that was cheapest last year will still be the cheapest come renewal. Switching is likely to get you big savings. And always check your existing policy has the right level of cover before you start comparing.
2. Check price comparison sites and direct-only providers. Different comparison sites may include a slightly different list of insurers, and the deals they have may also vary, so it’s worth checking at least a couple. And some insurers, such as Direct Line, aren’t on comparison sites at all. If you have unusual needs, such as owning a classic car, it may also be worth contacting specialist brokers.
3. Get your details right. The cost of cover is influenced by your age, location, occupation and marital status, among other factors. Changing one minor detail when completing your application form can have a big impact on the quotes you receive. Make sure all your personal details and information are correct to ensure you’re getting accurate quotes. If your job can legitimately be described in different ways, it’s worth checking all variations.
4. Compare the benefits as well as the price. Policies have subtle differences. When you get your quotes through, it’s worth looking at the details to make sure you’re not sacrificing crucial cover for the sake of a few pounds. You can get cheap car insurance that has good benefits.

How can I save money on my car insurance?

1. Increase security. If your car doesn’t have an alarm, consider adding one to reduce your premium.
2. Park in a secure place. Cars kept in a garage or on a secure driveway are usually cheaper to insure.
3. Cut the mileage. If you’re working from home more often or you’ve started using a bicycle more, tell your insurer about your reduced mileage.
4. Up the excess. Increasing your voluntary excess can reduce your premium. You just need to be sure you can pay the increased amount if you have to claim.
5. Pay annually, if you can. There can be a big difference in your premium if you opt to pay for the whole year upfront instead of paying monthly instalments.
6. Consider a telematics policy. Having a “black box” fitted to your car to track your driving could result in discounts for careful drivers.
7. Add an experienced named driver. If you’re young or new to driving, adding a more experienced and lower-risk driver to your policy as a named driver could reduce your premiums.

What types of car insurance are there?

There are 3 main types of car insurance: third-party (the lowest level of cover); third-party, fire and theft; and comprehensive (the highest level). Click on the tabs below to find out what is and isn’t covered with each type.

• Comprehensive
• Third-party, fire and theft
• Third-party

Expert insight: Car insurance advice

"Car insurance prices are going up after a rise in repair and labour costs, so you are likely to pay more when you renew a policy than last year. But that doesn’t mean you should accept the first quote you’re given or even that you should stick with your current insurer. If you can find a cheaper deal elsewhere, you’re free to move – or you could always ask your insurer to lower its price. If it doesn’t, you could also ask it to throw in something else as a perk, such as breakdown cover or window and glass protection."

Rebecca Goodman

Writer

What are my car insurance options?

Beyond deciding on the level of car insurance cover you want, there are a few extra things to think about.

How long do you need cover for?

• Continuously, for a car you own and drive regularly. It’s probably best to opt for a standard, annual policy in your own name.
• Continuously, for a car you drive regularly that belongs to a friend or family member. A standard, annual policy in your name is still an option. You could also consider asking the car’s owner to add you to their policy as a named driver. This might work out cheaper.
• For a few days or to borrow a car occasionally. In this case, it’s worth checking out if temporary car insurance would suit you best. This costs more per day but may work out cheaper if you’re only borrowing a car to drive every now and then.

Do you need specialist cover?

If your personal circumstances or the car you drive mean your risk profile is out of the norm, it’s worth investigating alternatives to standard car insurance policies. For example, young drivers may get a cheaper premium if they’re willing to have a “black box” fitted to their car, which tracks their driving habits and allows an insurer to reward safe driving.

Meanwhile, those with unusual cars – such as classics, high-performance cars or imported cars – might want to consider using an insurance broker that specialises in these types of vehicles rather than relying on price comparison sites.

And be aware that standard car insurance usually only covers you for commuting to and from a regular place of work. If you use your car for work purposes other than commuting, you’ll need business car insurance.

What optional extras do you want?

There’s a long list of extras that you can add to your car insurance policy. With each, you’ll need to weigh up the value it offers against the cost of adding it on. Some of the most common are:

• Breakdown cover. If you break down, the provider will send someone out to you to try to fix your car or tow it to a garage.
• Courtesy car/hire car cover. If your car is being repaired or has been written off after a claim, this cover provides a hire car vehicle until you have your own again.
• Legal expenses cover. This covers the legal costs of taking someone to court to reclaim costs arising from an accident that insurance hasn’t covered.

Some policies, particularly comprehensive ones, may include one or more of these as standard. So make sure you double-check what’s included when comparing insurance quotes.

Case study: Juliet saved £40 just by calling her insurer

"I’ve been with Direct Line for nearly a decade, but when I was offered a renewal quote via post, I called them and asked if they were able to improve on that as I was considering leaving. They reduced the quote by around £40. I would say it’s always sensible to phone the insurer directly if you are renewing rather than just relying on the automatically issued renewal quote. Also, always check that the information you are providing is up to date, especially the estimated mileage – a lower mileage could also mean a reduced quote."

Juliet Harris

Hastings

Is car insurance worth it?

Third-party car insurance is a legal requirement to drive (or even park) on public UK roads, so the question of whether car insurance is worth it is somewhat moot. The real question is whether you should opt for a higher level of cover or not.

Remember that third-party car insurance only covers you for injury to other people and damage to their cars or property. A third-party policy won’t cover you for any damage to or theft of your own car, which could run into thousands or even tens of thousands of pounds.

We reckon your best bet is to keep an open mind and compare all your options before deciding. You may find that you can get comprehensive cover, and the added peace of mind it offers, for not much more – or, in some cases, less – than third-party cover.

Pros and cons of comprehensive car insurance

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Frequently asked questions

Purchasing your policy

• Do I actually need car insurance?

  Yes, you are legally required to have at least third-party cover to drive on UK roads. Driving without insurance will likely end up with you facing fines, driving bans and other legal issues. You would also be fully liable for any damage or injury caused to others if you are involved in an accident.

• What types of vehicle can I insure?

  You can insure vans, motorbikes, trucks and just about any type of specialist car, including classic cars. You can also get cover for mopeds and scooters.

• What type of car insurance do I need?

  The first question to decide is whether you want third-party, third-party, fire and theft, or comprehensive – and that will partly be influenced by how cheap your quotes are.

  Drivers who are very young, very old or inexperienced are likely to see high premiums because of the risk profile of people in those groups. In short, there’s evidence that drivers in these groups are more likely to make claims and for those claims to be expensive. To help you get the cheapest deal, we’ve created specialist guides for learner drivers, young drivers, older drivers, convicted drivers and drivers with bad credit (your credit status comes into play if you want to pay monthly).

• How much does car insurance cost?

  As of August 2023, the average premium paid for private comprehensive motor insurance was £511, according to the Association of British Insurers. However, the cost of your insurance is determined by a range of factors, and you may end up paying more or less than this amount. For example, younger drivers and those living in London generally pay more for their car insurance than average.

• When is the best time to get car insurance?

  The best time to buy car insurance is approximately 3 weeks before the start date of your policy. Buying car insurance on the day you need it can end up costing you hundreds of pounds.

• How long do I need car insurance for?

  You’ll need car insurance for as long as you want to drive your car in the UK. If you only plan on driving for a short time, you can get temporary car insurance.

• How often do I need to pay car insurance?

  You can generally pay for annual car insurance either yearly or in monthly instalments. It is generally cheaper to pay up front for your policy annually. While paying a monthly premium may seem like a better option, you will often be paying interest on your premium, which means it will be more expensive overall.

• Does car insurance cover routine wear and tear?

  No. Car insurance is designed to help with unexpected incidents, such as accidents, fire damage or theft of your car. Unfortunately, it won’t cover the cost of things like worn tyres or fixing glitches with the electrics.

Choosing the right option

• Should I get comprehensive car insurance?

  If you want the highest level of cover and want to protect your car in the case of an accident, it’s worth considering comprehensive car insurance. While you are only required to get third-party insurance to drive in the UK, comprehensive cover offers greater peace of mind.

• Can I get car insurance with bad credit?

  Yes, it’s entirely possible to get car insurance even if you have bad credit, and it’s a legal requirement to have car insurance to drive in the UK. However, if you have a poor credit score, you may be charged more for cover if you choose to pay your insurance premium in monthly instalments.

• What is the cheapest car insurance?

  It’s easy to assume that third-party cover is the cheapest level of car insurance, as it’s minimum level of cover required to drive in the UK. It only covers you against any damage or injury sustained in an accident where you’re at fault and does not protect your car against damage. However, in reality, this may not be the case, and you may find some comprehensive car insurance policies that are cheaper than third-party cover.

• Which is the best car insurance?

  This will depend on a number of factors, including your age, budget and driving experience, as well as the type of cover you need. You can compare a range of the best car insurance companies here.

• I'm a young driver. What car insurance should I get?

  Unfortunately, car insurance for young and new drivers is generally more expensive than it is for other types of drivers. However, you can help reduce the cost of your premium by considering “black box” insurance, which measures your driving performance and can help save you money, provided you are a good driver.

Adjusting your policy

• Do I need to change insurance if I get a new car?

  If you’ve just bought a new car, you can generally transfer your existing car insurance policy over to the new vehicle. However, you will need to inform your insurance provider, as they will need to change the terms of your cover. You may also need to pay an administration fee to transfer your policy, and your premium may change depending on what type of car you are buying.

• Can I change my level of car insurance cover?

  It’s easy to change your level of car insurance cover when you renew your insurance; just search for and buy a different type. Whether you can change your level of cover part way through your policy term will depend on your provider. If they do allow this, your premium will change, and you may need to pay an administration fee.

• When can I cancel my car insurance?

  You are free to cancel your car insurance at any time, but may pay a fee to do so. This may be because you’ve found a more competitive policy elsewhere or simply no longer need car insurance. Keep in mind that it’s illegal to drive without car insurance, so if you’re cancelling your policy, you’ll need to start a new policy if you still plan on driving.

• Do I need to tell my insurer about incidents or changes to my personal circumstances?

  Yes. You need to tell your insurer about anything that could affect your policy. This includes accidents and other incidents, whether or not you make a claim. You must also tell them about changes to personal circumstances such as your job, where you live or how far you drive. Failure to tell your insurer about things that could affect your risk level may invalidate your policy and leave you uninsured.

Making a claim

• How do I know who's at fault in an accident?

  When you have an accident, the driver who is considered at fault is responsible for covering the cost of the damage. This means it will be their insurer that covers the cost of any damage to the other party. There are general rules of thumb about who is responsible. For example, the driver who hits another from behind is generally considered to be at fault, as is one taking a left turn that leads to an accident. However, every case is different and will be considered on its own merits. In some cases, more than one driver may be found to be partially at fault, in which case liability will be shared.

  Even if you don’t believe you are at fault, you will still need to report any accidents to your insurer. Ultimately, it is up to both your insurer and the other driver’s insurer to determine who is responsible for covering the damage. You can find more information on car accidents here.

• How can I claim on my insurance if I've had an accident?

  If you’ve been involved in an accident, you might decide to make an insurance claim. To increase the likelihood of the process going smoothly, keep the following in mind:

  • At the scene of the accident. Don’t admit culpability, even if you believe you were at fault (fully or in part). Try to stay calm and avoid getting into the blame game at this stage. You should make a note of the names, contact information and registration numbers of the other people involved in the accident. You should also get hold of and record the number of the police report, if it applies.
  • Before you make the claim. Consider all the consequences that might arise as a result of making a claim. You should also make sure that you’re fully aware of any excess obligations you might have and accept that you could be losing your no-claim bonus.
  • Making a claim. You must give the insurance company complete and accurate information surrounding your accident as clearly and as quickly as possible.
  • Fill out a formal claim form if necessary. If available, provide as many supporting documents as possible and make sure that the insurance company acknowledges that your claim was received. Next, you’ll have to answer any questions that are relevant for the assessment of your claim. To ensure everything goes smoothly and you get an answer as quickly as possible, make sure you stay up to date with how your claim is progressing.

• When should I claim on my car insurance?

  It’s not always a good idea to make a claim on your car insurance. If may not be worth claiming if your car has suffered minor damage as a result of your own driving or even if you were involved in an accident and the other driver was at fault. When you make a claim, you will have to pay your excess and will lose your no-claim bonus. Your premium may also be increased, even if you are deemed not to be at fault.

  If the value of the claim is for less than your excess, your provider will also not pay out on the claim. However, you should still report any accident to your insurer, even if you don’t intend to claim.

To make sure you get accurate and helpful information, this guide has been reviewed by Rebecca Goodman, a member of Finder's Editorial Review Board.

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