Why should I compare car insurance?
The price you're offered when you renew your car insurance is unlikely to be the cheapest available.
From January 2022, insurers will be banned from offering new and renewing customers different prices. But it's possible a different insurer could view your claims history, vehicle and neighbourhood in a different way – and offer you a lower premium.
Comparing car insurance quotes takes minutes and enables you to see if your renewal offer really is the best available. Even if you've got a big no-claims discount, it's usually possible to carry this to another insurer.
Here we explain how to compare car insurance, how to get the most out of comparison sites and other ways to save – from direct-only insurers to old-fashioned haggling. You can also read our best and worst car insurer ratings and our in-depth car insurer reviews.
How to compare quotes on price comparison sites
Price comparison sites are a good place to start as they allow you to get multiple car insurance quotes quickly.
Once you're on the insurer's website, check the policy details again, just to be sure the insurer has received correct information about you and is providing an accurate quote.
The main price comparison sites for insurance are Compare the Market, Confused.com, Go Compare, MoneySuperMarket and Uswitch.
What do I need to get a car insurance quote?
Before visiting comparison sites or contacting insurers, make sure you have the following:
- Your car's registration number (or at least its make and model)
- Your driving license
- Your driving and claims history, including your no-claims discount
- An idea of what you'll use your car for (such as work, commuting or personal use only)
- Your annual mileage, which you may be able to estimate based on your MOT certificate or by checking the MOT online
It's also useful to have an idea of what you're currently paying for your car insurance.
Which car insurance comparison site should I get a quote from first?
As with insurance generally, loyalty isn't much of a virtue – although some comparison sites do have reward schemes to incentivise repeat car insurance customers.
While you'll find a lot of big-name insurers across all the main sites, their panels of insurers vary, and in some cases, the prices – which means you should check as many of them as possible for car insurance deals.
While this might sound like a chore, it's effectively the equivalent of running about five or six quotes rather than one, to access offers from scores of insurance firms. Compared to the days when it was necessary to contact each insurer individually, it's time well spent.
Does using a price comparison site affect my credit rating?
This is potentially the case if you apply for a deal paid for in monthly instalments, but this would be the same if you'd gone to the insurer directly without using a comparison site.
What you may notice is that a number of insurers will run 'soft' searches on your credit record to verify your identity. You will see these on your credit file, but soft searches won't be visible to other companies and won't affect your rating.
Can I trust price comparison site prices?
The car insurance price you're shown on a comparison site is a genuine, live quote from the insurer. However, take into account the following:
- After being provided the initial quote, you'll have an opportunity to optimise your cover by purchasing add-ons. That final inclusive price could be higher than a competing deal that included some of these features as standard.
- Insurers have sometimes featured versions of their policies on comparison sites that come with slightly less cover as standard than those available from their website. This means that they're cheaper, and therefore more likely to stand out on a comparison site. But it also means you have to be careful it includes the cover you're after.
- Sometimes a great price can be explained, on closer inspection, by a steep excess. You can amend what's called a 'voluntary' excess when running the quote, but many insurers also include a 'compulsory' excess, too.
Check car insurers that aren't on comparison sites
Comparison sites are a great aid to your search for cheap car insurance, helping you cover vast amounts of terrain quickly when shopping around. But some insurers don't feature on all comparison sites.
Aviva policies can only be found on Confused.com, although its other brand Quote Me Happy is more widely available. Aviva fares decently in our analysis of policies, and has recently launched a product with no fees and a renewal price guarantee.
Direct Line insurance is only available direct. Direct Line is a high performer in our analysis of providers, offering a total loss hire car as standard. Churchill and Privilege are part of the Direct Line Group, but both sell policies on comparison sites.
NFU Mutual doesn't sell online at all. For a quote, you'll need to call one of its broker centers. NFU tends to perform well when we analyse car insurance, offering a lifetime guarantee on repairs and purporting to have a 'no-quibble' approach to claims.
Use cashback sites to get even cheaper cover
Another variety of comparison site is the cashback site. As the name suggests, these sites –such as Quidco and TopCashback – pay you a cash reward when you click through from them to buy goods or financial products.
These are worth checking out while you shop around for deals but they won't necessarily offer you the best value deals, even with cashback included.
A £300 insurance policy with £75 cashback is far from a bargain if you can get the same cover elsewhere for £150.
- Find out more: the best car insurance providers
How much does car insurance cost?
How much you'll pay for car insurance depends on a range of factors; from your age, the type of vehicle you have and where you live, to your marital status and past driving history.
Several companies track prices within car insurance pricing and regularly publish trends. Differing calculation methods and dates of publication can mean that the average figures don't always align.
|Source*||Index/survey||Premium||Premium is average of|
|Association of British Insurers||Premium tracker||£430||premiums paid|
|Compare the market||Premium Drivers index||£629||cheapest prices quoted to customers|
|Confused.com||Car insurance price index||£522||cheapest prices quoted to customers|
|MoneySuperMarket||Car insurance UK Price Index||£417||cheapest prices quoted to customers|
*All data from April to June 2021
While this range of figures outlines what your 'average' person might pay (or be quoted), in real life, there isn't an 'average' car insurance customer.
It's personally priced. This means that according to your personal circumstances, you might find that you pay a lot more or substantially less than the figures cited above.
What affects your car insurance premium?
Factors that could make your insurance more expensive include:
- Being younger or newly qualified (though some 50+ drivers may also pay more)
- Living in a postcode with a higher rate of theft or vandalism
- Having a more expensive and/or more powerful car
- A very high or very low annual mileage
- A job title seen as high risk by insurers
- Any driving convictions and past claims
- Parking your car on the street rather than in a garage
While you may not be able to change insurers' views of you, read on for several ways you can bring down the cost of car insurance.
What level of car insurance cover do I need?
There are three levels of car insurance:
- Third party only (TP) - the legal minimum, only covering damage to other people, their vehicles and property
- Third party, fire and theft (TPF&T) - third party cover plus cover for your car if it's stolen or damaged by a fire
- Fully comprehensive - third party, fire and theft cover plus damage to your vehicle in an accident
Why comprehensive car insurance could be cheaper
Drivers who are typically offered the least competitive prices (such as younger drivers) may be tempted to a lower level of cover to reduce the premium. However, it's worth checking the prices of each level of cover as, sometimes, counterintuitively, comprehensive cover costs less than TP or TPF&T.
The reason is insurers don't just price policies according to the level of cover, but according to how much they're paying out in claims for the drivers buying it.
Where less comprehensive policies are bought overwhelmingly by drivers that tend to claim more, insurers will work this into their pricing, making them more expensive.
Car insurance add-ons
Even comprehensive cover won't cover every eventuality. Insurers off various add ons, which you may or may not need:
Enhanced courtesy car cover
Most comprehensive policies will offer a car while your vehicle is in the garage for repairs.
But the courtesy car may not be available or resemble your own vehicle. And you're unlikely to get one if your car with stolen or written off.
Enhanced courtesy cover can fill these gaps.
- Typical add-on cost - £20-£30
- Cover limit - 14-60 days
Legal expenses insurance
This covers the cost of pursuing legal action to reclaim expenses that aren't covered under your main insurance - such as suing for compensation after an accident.
However, your insurer will only pursue claims that it believes you have a reasonable chance of succeeding.
- Typical add-on cost - around £30
- Cover limit - £50,000-£100,000
Car insurance pays the costs affected by an accident, but not your car breaking down or refusing to start.
While breakdown cover can be added to your car insurance policy, it could be cheaper to buy from a third party provider - you can find our reviews here.
You may already have breakdown cover from a packaged bank account.
- Typical add-on cost - £25-£200
Personal accident cover
Comprehensive car insurance policies are likely to provide some cover if you're killed or seriously injured in an accident.
However, dedicated accident cover may cover more situations to a higher claims limit, including daily expenses whilst at hospital.
An alternative to personal accident cover could be life insurance.
- Typical add-on cost: £20-£40
- Cover limit - £2,500-£100,000
It may not be worth claiming on your main insurance policy for a lost key, especially if you have a large excess or no claims discount.
Key cover solves this problem and may also cover replacing the lock and 24 hour assistance.
- Typical add-on cost: £15-£25
- Cover limit - £300-£2,500
- Find out more: car insurance add-ons and fees explained
Cheap car insurance if you've got a big no-claims discount
If you go several years without making a car insurance claim, you could receive a no-claims discount (NCD) of more than 60%.
However, a big NCD doesn't mean you're getting the best price on your insurance:
- An NCD might not make up for a high premium: a 30% NCD on a £1,000 premium is better than a 50% NCD on a £1,500 premium
- An NCD isn't a discount for loyalty: you can often take it to other insurers
- NCD protection won't stop your premium from rising after a claim
When you seek quotes for new insurers, you'll be asked how many years of no-claims you have. You may be asked to back this up with evidence.
Bear in mind that different insurers have different NCD policies, and may set different maximums for the number of claims-free years recognised in your NCD.
Our car insurance reviews list the maximum number of years each insurer will accept, as well as ratings of the insurer's different policies.
Cheap car insurance for younger drivers and new drivers
If you're aged under 25, or are newly qualified to drive, getting car insurance can be an expensive business.
This means comparison is even more important for young drivers, and you may find the cheapest quotes are for black box policies.
These could reward you for driving more safely than the average driver; other policies may suit drivers with relatively low mileage.
Choosing a cheaper-to-insure car, adding an older named driver to your policy and adding a higher voluntary excess can reduce your premium – although make sure you could still afford to make a claim or otherwise pay to repair your car.
Also consider additional courses such as Pass Plus, which can get you a discount from some insurers.
- Find out more: black box car insurance explained
Cheap car insurance for over-50s
Although car insurance premiums tend to decrease as you get older, they can rise in your late sixties, seventies and eighties.
Some insurance providers market themselves at over-50s drivers - but they won't necessarily be the cheapest option.
We recommend continuing to get quotes from all providers to see how the older-50s specialists compare. Some over-50s insurers may offer additional perks such as extended cover for driving overseas.
- Find out more: car insurance for the over 50s
Cheap car insurance for low-mileage drivers
If you drive significantly less than the national average mileage (6,700 miles a year, according to the Department for Transport), you may be charged more for insurance than higher mileage drivers.
Some insurers now offer policies that charge by the mile, tracking your mileage using a telematics device ('black box') or linking directly to your car's electronics.
It's worth comparing the quotes you're getting from these providers with quotes from more traditional car insurers.
If you only need access to a car for a short time, consider getting short term car insurance, or a policy with a rolling monthly contract that can be cancelled without incurring significant fees.
- Find out more: black box car insurance for low mileage drivers
Cheap GAP insurance for new cars
Guaranteed asset protection (GAP) insurance covers the difference between what your new car cost you, and what an insurer would pay out if it was stolen or written off.
New cars depreciate very quickly, so your insurer could pay out thousands of pounds less than you might expect.
Gap insurance can be particularly useful for people who buy cars on finance, as they'll be in debt for the original cost of the car.
While many people buy GAP insurance from their car dealer, they're unlikely to be getting the cheapest price. You should compare quotes, as you would for your main insurance policy.
Our guide explains what to look for when choosing GAP insurance and the different types of policies.
Cheap car insurance for classic cars
Owners of classic cars – defined by HMRC as those over 15 years old with a value of £15,000 or more – might struggle to get car insurance from mainstream insurers.
It's still worth getting quotes from comparison sites, but also seek quotes from specialist classic car insurers and brokers.
Joining an owners club may also give you discounts on car insurance policies.
- Find out more: how to save on classic car insurance
How to haggle for cheap car insurance
While insurers are banned for charging you more just because you're renewing, they could still come up with other reasons raise your premium. Haggling is your chance to change their mind.
Why might an insurer increase your premium?
An insurer might charge you more because it sees your risk, or the risk associated with your neighbourhood, as having increased since your last renewal.
But other insurers might not see you the same way, and you can use their quotes to haggle with your current insurer - after all, finding a new customer to replace you could cost them more than giving you a discount.
Does haggling work?
Our research suggests it does. We've found that customers who haggle pay less than those who don't, and in our most recent survey they reported an average discount of £50.
How do I haggle?
First thing's first: prepare.
Your renewal offer should also tell you the premium you paid the previous year. Note how much it's changed.
Then do some shopping around. This doesn't have to be too extensive; the objective is to get an impression of what your insurer's rivals will offer for your business, putting your renewal quote into context.
If you can, see if you can also obtain an online quote from your current insurer. What would they offer you if you were a new customer? Some insurers don't allow you to do this, but a number do.
Now you're ready to pick up the phone.
What do I say?
Haggling doesn't come naturally to everyone but, fortunately, it's not a dark art as far as insurance goes and you don't have to be the most confident or savvy negotiator to do it.
Start with: 'I would like to find out why my renewal price has increased'
Wait for the response. Explain that you have shopped around, and provide details of the cheapest quote you have received.'[Name of other provider] has quoted me [details of offer]. Are you prepared to better this quote?'
Wait and see what the call handler says. If they don't better this offer, you can push a little harder.'What's the lowest rate you can quote me to keep me as a customer? If it's not better than this cheaper quote, I'll go elsewhere.'
At this point, the call handler should offer you some sort of incentive to stay. It's up to you whether to accept or switch to a cheaper provider.
If they're still not offering you a quote you're happy with, ask them what they would be prepared to offer you if you cancelled your existing policy and bought a new one (as a new customer) with the same cover.
This isn't viable with all insurers as some block their customers from doing this.
What happens if they don't budge?
Insurers are usually prepared to be flexible, but not all will be willing to improve their offer.
You shouldn't be afraid to walk away if this is the case, especially if you know you can get a better deal elsewhere.
However, if you're keen on staying with the same insurer, you may consider increasing your excess or removing components of your cover to bring the cost down.
Watch out for car insurance scams
If the price looks too good to be true, then it probably is. Here are some car insurance scams to watch out for:
Ghost brokers are scammers posing as car insurance brokers and they can be found thriving on social media platforms. A Which? investigation in 2020 tracked 40 Instagram profiles in a three-month period that touted cheap insurance and appeared to be run by scammers.
Ghost-brokers claim to be able to arrange cheap cover for hard-to-insure customers, but to do this they will secretly manipulate their customers’ details by, for instance, changing addresses, driving histories, and adding named drivers.
Victims will sometimes be provided with doctored documents to mask the amendments. The resulting policy looks fine to start with, but will be found to be worthless if the driver tries to claim. Long after the ghost broker has made off with their fee, the average victim is £559 down and may face further consequences for having owned a fraudulent policy.
Insurance scams tend to run more smoothly when the policies are linked to real people, making identity theft a key part of the professional insurance fraudster’s toolkit.
Details such as names, addresses and ages are often sold online, and originate from an array of sources – for instance, data leaks from companies or hacked emails.
Sometimes, insurers are the weak link. A report by Pindrop claims that ‘voice fraud’ is rife in insurance. This is where imposters try to convince call handlers they’re genuine customers, usually to obtain information about those customers or access their policies.
Crash for cash
‘Crash for cash’ is where car insurance claims result from fake or deliberately staged road accidents – for example, a fraudster inducing an accident by braking suddenly in heavy traffic.
The Insurance Fraud Bureau recently analysed 2.7 million car insurance claims that were made between October 2019 and December 2020. It thinks that 170,000 of those claims might be linked to suspected networks carrying out these crash for cash scams.
How to protect yourself
Insurance brokers should be regulated by the Financial Conduct Authority (FCA). The Financial Services Register lists details of all of the firms, individuals and other bodies that are currently regulated by the FCA.
You can also check if your policy is listed on the Motor Insurers’ Bureau’s Motor Insurance Database. This records the policy details of all vehicles insured in the UK – if your vehicle is not listed, your policy is not legitimate.
If you’ve received suspicious correspondence from an insurer then let them know as soon as possible. It’s also worth keeping a close eye on your credit report – this will allow you to pick up on any searches by companies you don’t recognise, which could indicate a fraudulent application made in your name.
If you think you’ve been the victim of any type of fraud, contact the police. Take photographs, make sketches, and gather documentation or any other details that might be useful to an investigation.
- Find out more: what to do if you're a victim of identity theft
More ways to get cheap car insurance
You don't have to simply accept the first quote you get from an insurer, as there are plenty of legal tactics you can use to cut the cost of your car insurance.
1. It's cheaper to pay annually
Insurers will give you the option to pay for your cover in two ways: as a lump sum or in monthly instalments. While paying monthly might seem like a sensible way of spreading the cost, you may actually be charged hundreds more over the year.
By paying in monthly instalments you are, in effect, taking on a loan from your insurer. Most will charge you interest for it, and rates aren't cheap - as much as 44% APR.
If paying monthly is your only real option, be sure when shopping around to compare the insurers' monthly, rather than annual, premiums. Or you could consider paying using an 0% purchase credit card.
2. Your credit rating and insurance
If get a quote from an insurer, they will run a 'soft' search on your credit record. This is to verify the accuracy of your personal information (such as name and address) and won't impact your credit score or be visible to other companies.
If you then apply for insurance and opt to pay monthly, your insurer may then run a 'hard' credit check.
This information will help it decide whether to actually provide you the credit. Like any other credit application, this will be externally visible in your record and can affect how other lenders treat you.
Find out more in our guide to credit reports: all you need to know.
3. Pick the right job title
What's the difference between a 'kitchen worker' and a 'chef', a 'writer' and a 'journalist', or a 'housewife' and a 'homemaker'? In practice, your occupation may be aptly described by any two of these, but the one you choose could make a difference with your insurer.
Insurers look at many factors when calculating the cost of covering you, and how you describe what you do for a living makes a difference.
If you've got a choice of different labels when entering your occupation, check if there's a difference in impact to your premium.
However, remember that you should never lie about your job. Don't say you're a butcher if you're a baker. This is considered fraud and you could be prosecuted.
You must also tell your insurer if you lose your job; unfortunately this could lead to your premium going up. However, your insurer may be able to defer your payments.
4. Don't just auto-renew
Come your policy's renewal date, it may be tempting to let your insurer do all the work and have your policy automatically continue.
But you're paying for this convenience - customers who haggle are proven to save on their premiums (more on that below). And if you don't shop around, you could be missing out on far better deals from rival companies.
7. Consider multi-car insurance
If you live in a household with more than one car, many insurers will offer savings for insuring them all together.
Some insurers offer policies that will cover more than one car, while others enable you to 'link' multiple policies together to earn a discount.
This is likely to work out cheaper than separately covering several vehicles with the same company. Bear in mind, of course, that the value of a discount is entirely relative to how expensive the insurer was to start with.
8. Named drivers
If you're considered a high-risk driver, putting a lower risk driver on the policy as a 'named' driver can bring the overall premium down.
For instance, drivers under 25, who face the steepest premiums, can benefit from having an older and more experienced driver on their policy.
Bear in mind, however, that it's illegal to put someone down as the main driver if this isn't the case. This practice is known as 'fronting', and is a type of insurance fraud that can lead to your policy being invalidated.
9. Modifications to your car
Don't be fooled into thinking that insurers only consider boy racer cars as being modified. Even a small modification to your car, such as new alloys, can cause your premiums to rise.
If you're going to make any changes to your car always discuss them with your insurer first.
Conversely, any modification to your vehicle that increases its safety could save you money. Installing an alarm, tracker or immobiliser, especially if approved by car safety research firm Thatcham, can see your car insurance premiums tumble.
10. Play around with your excess
If you're willing to fork out more on your excess (the amount you have to pay yourself in the event of a claim) your insurer will reward you with lower premiums. However, make sure you select your excess carefully.
Setting the bar too high, especially if it starts getting too close to your claims limit, might make claiming on your car insurance either pointless or too expensive.
11. Are add-ons necessary?
Car insurance add-ons may be loading £50 or more onto your premium. They're by no means all a waste of cash but think carefully about which you need and which you don't
For instance, you may already have breakdown cover, or not require a hire car if your car is put out of action.
Find out more in our guide to car insurance add-ons, fees and charges.
12. Can black box cut costs?
Black box insurance, also known as telematics policies, use GPS devices in your car to track your driving.
If your day-to-day driving passes criteria laid out by the insurer (these can range from not driving at specific times of the day, staying within a certain mileage, to measurements of your safety in cornering and braking), you'll be rewarded with discounts in your premium.
These types of policy are most popular with, and generally aimed at, younger drivers, who face the steepest premiums.
13. Be a better driver
Insurers primarily set your premium based on their experience of drivers that seem statistically similar to you (in terms of age, locality, type of car owned, and so on).
However, there are some ways you can demonstrate that you're a better driver, which might help hedge things further in your favour.
Certificates such as Pass Plus (for younger drivers) or from the Institute of Advanced Motorists can help set you apart and will earn you a discount from some insurers.
More obviously, maintaining a good no claims bonus and clean driving record will keep your premium low
14. Consider a cheaper to insure car
The make and model of your car is a major factor in how your car insurance policy will be priced.
Cars are given an advisory risk rating by an organisation called Thatcham Research.
Thatcham works in conjunction with insurance trade body the Association of British Insurers to award ratings on a 1-50 scale, giving an indication as to how expensive it will be to insure.
You can visit the Thatcham website and plug in your car's specs to see how high it features.
A more direct route, of course, is to run insurance quotes on a prospective car prior to buying it. Car insurance can be a serious addition to its annual running costs, so factor this in before buying a new car.
15. Use a broker
16. Avoid 'ghost brokers'
So-called 'ghost brokers' aren't actually brokers but fraudsters who sell insurance at too-good-to-be-true prices. They target drivers who have been struggling to find affordable cover.
The catch is their policies are fraudulently obtained, often substituting some of the policyholder's details (such as their address) with those of lower-risk drivers, usually without either's knowledge.
The car will seem insured on paper, with the policyholder having documentation to demonstrate it – but were they to try and make a claim, the policy would be revealed as fake and the ruse would collapse.
Ghost brokers often operate on social media platforms, as well as student websites, money-saving forums, and marketplace websites. Telltale signs include:
- Guaranteeing a specific insurance price prior to securing a quote
- Lack of a professional-looking website
- Mobile phone number as a means of contact
- Offers that seem too good to be true.
If you're uncertain whether you're dealing with a legitimate broker, you can check if they're authorised on the Financial Conduct Authority's or the British Insurance Brokers' Association websites.