How to save £200 on your car insurance

James Rowe: Few of us relish having to call up an insurer to haggle for a better deal, but it can prove successful if done properly. This is how to haggle like a pro. Welcome to Which? Money.

Hello, it's James in the Which? studio alongside Which? senior researcher, Dean Sobers. Dean, hello, how are you?

Dean Sobers: Hi, I'm not so bad, thanks.

James Rowe: Very good, nice to have you here. Now, you wrote a brilliant piece for the latest Which? Money magazine called "The Art of Haggling". It was the cover story, and the cover is brilliant. We'll get to haggling shortly, but I wonder if we should start with some numbers to set the scene a little bit, because I think a lot of us have been used to car insurance premiums soaring over the last few years.

Dean Sobers: Yeah, it's been a bit of a roller coaster over the past few years. So, and this is something that we talk about in the piece. So four years ago, 2022, premiums were pretty low. And then over the following couple of years, they soared. They rose by about £222 – that's the average premium went up by. And then in the couple of years since – that was 2024 – in the couple of years since, they've been falling in its and spurts. And they decreased by about £70 or so. So drivers have been getting something of a reprieve. The average driver now pays £566 now, according to the Association of British Insurers, which, as I said, is about 70 quid down on where they were a couple of years ago, but that's still quite a fair bit up from where they were several years ago.

And one of the main reasons for that is that while premiums have been fluctuating, what's been driving those premiums up is still ongoing. So it's what's referred to as claims inflation, which is the cost of the average claim. And that's fuelled by things like labor – the cost of getting hold of people who are specialised enough to repair these increasingly sophisticated cars – it's materials, supply chain issues, all that stuff, energy.

James Rowe: So there's a lot of factors going into this. And I guess you mentioned 2022 was when they started to go up, and we saw a lot of prices go up then, when the Ukraine war started, and then when we had the mini-budget towards the end of the year, again, we saw these shock factors that would drive prices up. But it's interesting that you mentioned about more high-tech, sophisticated cars as well, because if anybody has a newer car from the last five years or so, maybe even a bit longer, we're so used now to having fancy tech to try and help us stay on the road, stay alert, and that kind of thing. But that cost or that tech comes at a cost when it breaks or when we have an accident and all of that needs repaired. It's not just a headlight that needs replaced now, it's all of this fancy tech that needs replaced.

Dean Sobers: That's exactly it. Yeah, so what on an older generation car might have been a very straightforward mechanical issue to deal with, I don't know, a broken wing mirror or something, now potentially becomes an issue that requires computational repairs. You might need someone who can, it can have effects, a door handle might be connected up to all sorts of different security systems that require quite specialized expertise to actually set right. So, obviously, yeah, these new cars are great and everything, but maintaining them, repairing them, it all comes at extra cost.

James Rowe: Costs just keep going up and up for that kind of thing. But more recently, as you say, the costs have been coming down a little bit, not to where they used to be. But when we think about the factors that come into what a premium might be for car insurance, there are I would say three big factors, correct me if I'm wrong, but I would say there's three, which would be your age – I think we're all used to what it's like, the younger you are, perhaps the more expensive it will be – the region, where you live in the UK, but also whether or not you use a price comparison site. Should we pick through those individually? So age is pretty straightforward, I guess.

Dean Sobers: Yeah, age is probably the most straightforward of those three, because as a general rule of thumb, when you're young, so when you're under 25, if you're a new driver, that group of drivers tend to pay by quite a mile the most in premiums. Then as you get older, you accrue experience, you build up a no-claims history if you're a decent driver, then your age starts to work in your favour, so your premiums start to go down relative to what other drivers will be paying over time. That trend lasts until you're roughly in your late 60s, 70s, at which point your age starts to then again work against you a little bit and your premiums start to go up.

James Rowe: So we're all used to that. So maybe if we do it on a graph, it would start off high, go down low, and then start to creep up again.

Dean Sobers: Start going up again. Yeah, exactly, yeah.

James Rowe: What about location then, so where you are in the country?

Dean Sobers: So yeah, the reason I said that that was, or implied that was a little bit more complicated is because it's a bit more than just region. So insurers have, they collect very, very detailed information. When you're running an insurance quote, you'll usually be plugging in, I don't know, about 50-odd bits of information about you.

James Rowe: Everything, it seems like.

Dean Sobers: Yeah, and that's all kind of used, that's all used in combination to try and build a picture of what your potential risk might be. And when it comes to where you live, where you drive, it's very detailed. So it could be that how your location affects your premium might be different for you than it might be for someone who lives across the road. So they look for that stuff in very fine detail. And there's all sorts of things that might inform that. So it might, for example, be maybe there's a different crime rate in one area of a particular town than there is in another, so there's increased risk of theft. It could be that you might live near a tricky roundabout or something where lots of accidents happen. These things and lots of other things can mean that your address is a very significant driver in what you'll end up paying.

James Rowe: And I guess that's why they ask things like, "Where is your car stored overnight?", because if it's in a garage, it's a lot safer than on...

Dean Sobers: Yeah, so it'll mitigate against potential theft risk that they're seeing, yeah.

James Rowe: And then I mentioned using a comparison site as well. Do you want to talk us through this, because I think we'll have all had scenarios where we have or have not used a comparison site, but we would suggest that those prices can differ.

Dean Sobers: So they can. This is probably one of the more subtle ones in a way. So I'd say that broader terms, what we do find is that people who shop around and switch will usually end up paying a bit less than people that who don't, just because they're seeing what the market offers, they're seeing their renewal quote in context and they'll be noticing things that people who haven't done that won't. And what we found, so we did a survey for this article. So people who renewed who were paying yearly paid on average £422. People who switched were paying £372. So there's a £50 saving by the fact that they'd switched. So, and obviously the way that most people find out who to switch to is through comparison sites.

Another element which can also play into this is that insurers know when they're selling through a comparison site that potential customers are seeing their quote in a big long list ranked against all sorts of other quotes from other insurers. So they know that to compete to be near the top, they need to be as cheap as they possibly can be. So what you'll find with some insurers, actually with a lot of insurers, is that they will have, they will sell like slightly different versions of their policies on comparison sites than they might if you went to them direct. So they might be slightly streamlined, they might have slightly less cover in them, they might have slightly higher excesses in them. Yeah, they're just primed to be as cheap as they can sell them.

James Rowe: And they might have a slight different name, they might have...

Dean Sobers: Yeah, they might have a slightly different name. What we do hear sometimes from our readers sometimes is, "I got my renewal quote from my insurer and then I looked on a comparison site and I found the same policy for, let's say, 100 quid less," or something like that, some difference. And what that can sometimes be is that they were actually seeing a different policy that just looked very similar. And that's one of the reasons behind that, is that you do have insurers will tailor, they'll put different policies in front of you in different places.

James Rowe: Which makes it incredibly complex as a consumer. But I'm going to do what sounds like and definitely is a very blatant plug here, because here at Which? we've teamed up with MoneySuperMarket, haven't we, to create this brilliant, and it is brilliant, I've checked it out, this brilliant new service which is a comparison site on MoneySuperMarket, but as well as the cost of the premiums, it includes our reviews, it includes our ratings, so you can see alongside the cost what we think about these insurance providers. Brilliant, isn't it?

Dean Sobers: Yeah, so what was a great thing that we can do, because anyone who's in the market for an insurance policy wants to know how much it's going to cost, and we'd always wanted to be able to give them a journey where they could see what we thought of the provider in terms of its service and in terms of its cover levels, but then they could also conveniently also find out what it would be charging them as an individual.

James Rowe: Because now it might have the cost and then to one side it might even say Which? Best Buy, so you know it's going to be an absolutely fantastic insurance policy. Well worth checking out whenever your car insurance comes up for renewal – mine's in a couple of months, so I know I'll be checking it out. You can just go to which.co.uk/carinsurance to check that out. There's a link in the show notes for you, too.

But shall we get on to haggling? That was the main focus of your story that you wrote for the magazine. Big question up front, and then we can dive off in all sorts of directions. Does it work, haggling?

Dean Sobers: Yeah, so the survey that we did, the main focus, the main reason that we did the survey was to look into haggling to find out if it works and how easy it is. And every time we do it, we find that people that try it are more likely than not to be able to get some price reduction, and they usually find the experience quite straightforward and easy. So it's something, as a consequence of that, it's something that we always recommend people try. It's not guaranteed to work for everyone, but it does seem to work more often than it doesn't.

James Rowe: And we've got some numbers on that as well about how many people in your survey did actually try and then the success rate as well.

Dean Sobers: Yeah, so in our survey, it was 2,000 people that had insurance and that had had a renewal come up in the last year. And of these people, 58% had contacted their insurer to discuss the price when their renewal had come up. And of those, 65%, because of that discussion, they'd been offered a lower price. Now, what's quite important is that being offered a reduced price doesn't necessarily mean that you've haggled a discount.

James Rowe: I'm glad you mentioned this. Can we get into this? Because it sounds like we're going to get into the weeds, but I think it's really important because a reduction in the price doesn't mean you're necessarily getting the same amount of cover.

Dean Sobers: Yeah, so what an insurer might do if you contact them and you say, "I'm not happy with the price," what they might say is, "Well, the price is the price, but what we can do is suggest to you changes that you can make to your policy to make it more affordable." So they might, for example, suggest increasing the excess, or maybe getting rid of parts of the cover that you have. So maybe, do you really need the breakdown cover? Do you really need the legal expenses cover or whatever it is? You can make those little cuts to bring down the price. So you end up with a reduced price as a result, but you're not really getting a discount.

James Rowe: But it's funny, because I guess it is a form of haggling, isn't it, because you are haggling for a lower price, but it's weighing up what kind of cover you actually need at the same time.

Dean Sobers: Yeah, so it might just be that you have a number of add-ons to your policy that, on reflection, aren't really worth what you're paying for them for you. So it might be smart to streamline your policy a little bit in order to bring the price down and to actually get value for money that's good for you.

But what we wanted to do in our survey was to work out which people had basically done that in their discussion and which people had actually basically said something along the lines of, "I'm not happy with the price, I don't think it's good value for money, I found better value for money elsewhere, I'm going to leave unless you can improve the price." 

And what we found was that about 58% again of the customers who had been offered a reduced price told us that they hadn't had to make any changes to their policy in order to get that reduction.

James Rowe: So quite a sizable number again then, actually.

Dean Sobers: Yeah, again, it's more managed to do that than failed to do that, as it were.

James Rowe: And around the savings then, because I think the monetary figures are quite important here, how much are you likely to save if you do call up and try and haggle that price down?

Dean Sobers: Quite a lot. So in our survey, the average saving by people who contacted their insurer to discuss their price was a £60 reduction if you're paying annually, and those that were paying by the month said that they'd saved on average £21 a month.

James Rowe: Oh wow, so these are big numbers we're talking about.

Dean Sobers: Quite considerable, yeah.

James Rowe: Why is this happening then? Because I think for a lot of people, they would think it seems a bit unfair that there's a certain price you are offered, but then if you call up, you can get that price down. Why does haggling actually work?

Dean Sobers: So yeah, it's one of these interesting things, because, yeah, arguably it is unfair in that you're being offered this one price, and then when you challenge it, they'll kind of back off that price and give you this improved price.

James Rowe: Because it almost feels like, well, if you could give me the improved price...

Dean Sobers: Why didn't you give me that price in the first place, yeah. Now, the other side of the coin is that for insurers, retaining a customer is cheaper than getting a new customer. So if they're going to save some money there in doing that in that haggling process, then that extra cost like for marketing expenses and so on that it would cost and to set up a new policy, those sorts of admin costs would be saved, so they can technically therefore afford to give you some of that money back to make your price a little bit better.

And then also I guess what you're indicating if you're saying that you're dissatisfied with the price is that you're likely to go elsewhere. If you're a good customer, then maybe there's a saving for them to be made in keeping hold of your business rather than chancing it with a new customer.

And then at a broader scale, if you shopped around and you found a better price elsewhere and you can quote that to them from one of their rivals, it means that there's a flexibility in that process for them to meet you halfway, you know. It's like, "I really want to stay with you as a customer, I like your service, I like the policy, but the price is just, it's either more than I can pay or it's more than I want to pay," and it allows for that flexibility for them to meet you in the middle.

James Rowe: So from an insurer's point of view, let's say – I'm going to use you as an example – let's say your premium is 500 quid, your renewal cost is 500 quid at least anyway, you call up and say, "I'm not happy with that," and they say, "Well, we can reduce it by 50 quid." They're happy to lose 50 quid rather than losing 500 quid if you were to go elsewhere. I guess that's the crux of it from their point of view.

Dean Sobers: So I guess they wouldn't necessarily lose that 500 quid because they'd replace me basically with another customer.

James Rowe: But you said it's more difficult to do that, yes.

Dean Sobers: But it would cost them money to obtain that customer. So, yeah, so that's sort of the mechanics about it.

James Rowe: What would insurers say about this, you know, where we're talking about haggling and how it works and that sort of thing? How open are insurers about this haggling process? Do they agree that it works?

Dean Sobers: So last November, we did actually ask when we were doing a survey of insurers about their cover levels, we asked them if they're open to customers haggling with them and if they would be willing to offer them a discount. And what we found was that 12 out of 25, so a little under half, said that that was something that they might potentially do. And fewer still were actually explicitly saying that they would offer discounts. So the takeaway from that is that it's not something they like to advertise; they're quite shy about it.

James Rowe: And why would they want to shout about it?

Dean Sobers: Exactly, yeah. They don't want everyone doing it, because I guess if everyone did it, then they probably wouldn't have enough reserve to actually be giving certain, some customers a better deal than other customers, because, yeah, the economics of it wouldn't work.

So, yeah, so they're quite quiet about it. What we did was we did contact a couple of the insurers who in this year's survey had had the highest number of, or the highest proportions of customers say they were offered reduced prices. And so they were Admiral and Hastings Direct. So Admiral basically said that their renewal prices were fair and accurate based on customer details, but where things had changed or the customer was unhappy with renewal terms or had found a cheaper quote, it could apply discounts where appropriate. What we put to them was, given that they have such a high proportion of customers that are willing to, sorry, that are able to get better prices once they call up, does this make it unfair on other customers? So that was what they said. It didn't really reply to what we specifically asked, but it had kind of admitted that that is what they do.

Hastings Direct said similar things, but they quibbled with our definition of haggling. They basically said they don't haggle, but they do encourage customers to shop around, and if customers can find better prices and then express dissatisfaction with their price, they might get a discount as a result of that.

James Rowe: I would say that sounds like haggling still.

Dean Sobers: Yeah, I guess it's a "you say potato" sort of thing. Yeah.

James Rowe: I guess so. So I think we've got to the point where we would still say it is worth doing. But I think a lot of people would still take issue with the fact that it has to be done in some cases to try and get a lower price. A lot of people, some cynics, and I think you would rightly be a cynic, would say if you can offer a certain price to one person – if, I mean, and I'm going to caveat this, if the circumstances were exactly the same for somebody else, which is unlikely – why can't you offer me that same price? I think that would be a fair challenge from somebody, wouldn't it?

Dean Sobers: I do think it'd be a fair challenge, yeah. You know, I hear this all the time from readers, from other staff members, people just grumbling, quite fairly in my view, that every year they have to go through this dance of seeing their renewal, seeing their price go up, having to call the insurer, take out 20 minutes of their time, or whatever it might be, just to get that premium brought back down again. Now, you know, some people enjoy that haggling process, but I don't think that's most people. So it is, it's something that gets on a lot of people's nerves, and I can certainly relate to why people don't find it to be a fair thing. All we can really say along those lines is that we keep finding it to be a price-saving tactic that does work, so we encourage people to do it even if they don't like doing it.

I guess the one comfort that we can offer is that most people that do it tell us they find it easy. So it's not like, it doesn't feel like jumping through hoops. It's not jumping through hoops, and it's also you don't have to be like a shrewd negotiator to do it. You really just have to put in a little bit of time to do a little bit of shopping around, just to see if the renewal price you've been offered looks like it's in line with what you're getting from other insurers or not, and take that to the insurer if you're unhappy with the price that they've offered. It's quite plausible that in response to that, they will say, "OK, well we can knock so much off."

James Rowe: Yeah, I've seen some people suggest that you have to have a certain script to follow and all this sort of thing, but it sounds like it can just be very straightforward. You ring up, say, "You've offered me this, I don't quite think it's worth it, I've got this lower price elsewhere, what can you do about it?"

Dean Sobers: I mean, we've published haggling scripts of our own, but it's all quite basic, commonsense stuff. I think that's the main point to drive home really, is that by the act of contacting them and challenging them about their price, you're signalling that you're one of those customers who's thinking about leaving. And then if they tend to offer discounts, that might mean, "Okay, you're this kind of customer, therefore we need to wheel out that extra flexibility to retain you."

James Rowe: Sound advice there, and there's loads more to read on our website. Loads of useful links in the show notes, including that link to the new insurance comparison tool that we've got with MoneySuperMarket, which is which.co.uk/carinsurance, nice and straightforward. But for now, Dean, thanks so much for your time.

Dean Sobers: Thank you.

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