How To Reduce My Car Insurance

There are plenty of ways that drivers can actively reduce car insurance premiums when it’s time to renew a policy or if it’s the first time getting cover.

Insurance costs may be predominantly calculated by insurers using personal data such as your age, driving history and occupation, but here are 10 ways of reducing your car’s insurance quote.

1. Keep the car safe


When you go to take out car insurance, you’ll be asked where the vehicle is kept during the day and overnight. This allows insurers to build your risk profile to determine how likely it is that you’ll make a claim, especially if there’s a higher rate of crime in the area where you live.

The standard options you can choose from are:

  • On a driveway
  • Office or factory car park
  • On the street (away from home)
  • On the street (near home)
  • Locked garage
  • Unlocked garage
  • Third party premises
  • Locked compound
  • Open public car park
  • Secure public car park

To reduce your insurance costs, you can actively store your car somewhere safe, such as on a driveway (if you have one) or even on a street which is near your home.

For example, comprehensive cover for a standard Vauxhall Astra is £83 cheaper* for the year when you’re parked on a driveway, as opposed to a street away from your home.

While these savings may not be groundbreaking for some, you can certainly save a lot each year by choosing to keep your car in a safe place. 

*Prices based on MoneySuperMarket data, accurate as of 29/05/20 and is the cheapest quote for someone who is 25 years old, employed and has at least one year’s no claims bonus.

2. Put down a higher voluntary excess

A voluntary excess is an amount you pledge to pay towards any claim you make following an accident, on top of any compulsory excess which is automatically set by an insurer.

One way of making your insurance cost cheaper is by putting down a higher voluntary excess. By doing this, you’re effectively telling an insurer that you intend to reach into your own pockets if you ever need to make a claim. So, your insurance premiums will be made cheaper because providers know they won’t have to pay out as much for a claim.

You can choose to put between £0 and £1,000 voluntary excess before you take out a policy.

Using the Astra as an example again, insurance premiums when £0 excess is put down were around £1,069 for the year, compared with £861 when a standard £250 excess was chosen.

3. Make legitimate job title changes

Your occupation has a big impact on what your insurance premiums are because it’s a detail which insurers consider when building your risk profile. For example, some jobs require you to drive more than others and are therefore associated with more claims.

The good thing about applying for insurance is that there are different options which describe the same position accurately. So, if you can legitimately change your job title and run a cheaper quote, you could save hundreds of pounds each year on premiums.

Remember: You should check that a reasonable person who knows what your job is can agree that the new title still reflects what you do. If they don’t, you shouldn’t do it, but if they’re unsure, you should check with the insurer as to whether it’s legal. Otherwise, you could face being charged with fraud and have your insurance cancelled.

4. Build up a good no claims bonus

Building up a good no claims bonus (NCB) is one of the most effective ways that you can make the price of your car insurance cheaper.

An NCB is what you get after every year you drive without making a claim on your insurance. In turn, your insurer (or a different one if you decide to switch) will reward you with lower premiums for being safer on the road and by not costing them large sums in the form of claims payouts.

Remember: Any NCB you have has a two-year expirary date from the moment you finish a policy, so you will have to build it up again if you stop driving for two years or longer. Also, by making a claim you risk losing all or part of your NCB.

After running a quote on the same vehicle and personal details used above, having no NCB came in at £1,024 for the year, compared to £861 when a driver has at least one year of NCB, a difference of £163.

Of course, the more years you keep a clean record like this, the bigger the reduction you’ll see in your premiums. According to MoneySuperMarket research, three years of no claims saves you a considerable 22% on your premium.

5. Compare insurance costs from multiple providers

Comparing insurance offers

Shopping around to compare insurance costs from multiple providers is another great way to find the best price for cover. And with several specialist comparison websites to choose from, this is done for you in a matter of 20 minutes once you enter some details.

This method is actively encouraged for existing drivers who are already insured as a way of reducing insurance costs further. If you fall under this category, then your current provider will notify you through post/email around three weeks in before your renewal date with the new quote for the following year’s cover, should you wish to carry on being insured by them.

However, you can reduce this figure by entering your personal and vehicle information into an insurance comparison website to find a better priced offer. You can then decide whether to change provider or contact your current insurer to see if they will price match cheaper offers you’ve seen or even beat it.

Remember: Check the details of each policy before signing up to the cheapest, as some may not include things you may want, such as a courtesy car, windscreen cover or breakdown recovery.

6. Add a more experienced named driver

Adding a named driver to your insurance policy means that another person will be included on the paperwork and can use the vehicle.

By putting a more experienced driver on your insurance – such as a parent or perhaps a partner who has been driving for longer – insurers will see you as less of a risk because the car is being shared. However, you’ll need to decide which of you will be the ‘main driver’, and this person is the one who drives the most miles in the car.

If you’re mid-policy and want to reduce the cost of your premiums, you can pay an admin fee of around £15 to add a named driver to your policy.

7. Choose the right kind of cover

When you go to insure a car, you’ll have three different levels of cover to choose from, which are:

  • Third party – the most basic form of insurance, covering damage/injury to other people and their property.
  • Third party, fire and theft – third party cover, but with added protection for you if your car is stolen or destroyed in a fire (including accidental fires).
  • Comprehensive – the highest level of cover, with everything third party, fire and theft includes, plus protection for you, your passengers and your vehicle.

Knowing which one to choose will help you save a great deal on your premiums, and you may be surprised to hear that comprehensive cover can often be the cheapest. This is because many high-risk drivers were seen to be claiming with third party policies, which meant that insurers now associate them with having a higher risk of crashing.

Here are some examples of price differences in insurance premiums for the previously mentioned Vauxhall Astra.

  • Comprehensive – £756 per year
  • Third party, fire and theft – £1,198 per year
  • Third party – £1,205 per year

8. If you can, drive less miles


Stating a lower annual mileage on your insurance policy tells an insurer that you’re less of a risk due to the fact you won’t be driving as often, and therefore are not as likely to be involved in an accident.

After running two insurance quotes (one for 8,000 miles per year, the other for 16,000 miles) on the Astra mentioned earlier, the difference in price was £272. Of course, this is only an example of how much you can save, and you should use your own details when shopping around to get the most accurate price.

It’s important that you still be honest with your calculation of how many miles a year you’re going to drive. Otherwise, your cover will be invalidated if you go to make a claim. As a worse case scenario, insurance may be cancelled and the provider can refuse to reinsure you.

9. Use the car wisely

An insurer will want to know the reasons behind how you’re using the car, and you can choose from these options:

  • Social only – personal reasons only, excluding commutes to work/place of study and business miles.
  • Social and commuting – includes driving to and from a single place of work/study.
  • Social, commuting and for business – when you use the car on business, away from a single place of work, but doesn’t include commercial travel i.e. sales or delivering goods.

Generally speaking, insurance premiums are more expensive when you’re using a car for more than one purpose, and your annual mileage will be considered in these circumstances too.

To reduce the cost of your cover, you can try to use your vehicle for just social and commuting, which is the most common choice for drivers.

10. Consider black box/telematics insurance

Telematics (or ‘black box’) insurance is a type of cover whereby your driving is monitored by your insurer using a device fitted to your dashboard through the car’s electrics. Alternatively, some providers do this using an app which you download onto your smartphone and switch on each time you do a journey in your car.

This type of cover rewards drivers for driving by making premiums cheaper when things such as speed limits are met and you avoid braking/turning suddenly. On top of this, you’ll be given better prices for your insurance if you travel regularly at times which are deemed as ‘safer’ by insurers, like during the day and outside of peak commuting times.

It’s important to note that while you will see premiums go down for safer driving, you will be punished for careless or dangerous driving by seeing the cost of your insurance increase.

Remember: Black box insurance tends to be suited to younger drivers or those with a driving conviction who face the highest rates for cover, and you may find that if you’re at least 25 and have a clean record, this type of insurance could even work out more expensively.

11. Pay upfront

It’s always cheaper to pay upfront for your car insurance as opposed to paying in monthly installments. The latter tends to include a deposit followed by 11 monthly payments which have around 15-35% APR (Annual Percentage Rate) added to them.

Essentially you’re being covered by insurance despite not having fully paid for it, meaning you’ll wind up paying a bit more.

The difference in price when paying for insurance upfront and monthly will depend on your individual details, it can in some cases be in excess of £200. However, you should only pay in one go if you have enough saved up and can afford to.

Would you like more information on car insurance? Head over to our other guides page for everything you need to know.

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