Common car insurance traps to avoid
Motor insurance is a legal requirement, but one that can be expensive if you fall into one of the traps set by providers. Forewarned is forearmed – here are some of those traps to avoid.
Contrary to popular belief, it’s not always best to stick with the same insurer year after year. Insurance companies love apathy and will happily increase your premium every year, regardless of your loyalty and lack of claims.
The best deals are always reserved for new customers, so you really are best to shop around and compare what other companies are offering, rather than just allowing your policy to auto-renew.
Third party, fire and theft cover saves money
Actually, it doesn’t. You can often get fully comprehensive cover at a cheaper rate and you have the advantage of much greater protection. Shop around to see what you can get for your money.
Paying monthly by instalment
Paying your annual car insurance premium upfront is much cheaper than spreading the cost over a year. Insurers like to add interest charges to your premium and this can really push the cost up.
One way around this is to pay your premium all in one go using a 0% purchase credit card. This means that you won’t be paying any interest on your spending for up to 18 months and provided you pay it off, you can pay your insurance premium off monthly if you wish.
Always check the excess before making your decision on which policy to opt for. A very high excess can mean that your premiums will be considerably lower, but can you afford it if you need to make a claim? Remember that excesses have two components: mandatory, which is set by the insurer, and voluntary, which you select yourself.
Naming yourself as the main driver when you aren’t
This practice is known as ‘fronting’ and is commonly used by parents insuring a vehicle on behalf of a child. Obviously, the premiums will be considerably cheaper than if the child was to insure the vehicle themselves, but it is also illegal. Fronting invalidates your insurance and will earn you a hefty fine and penalty points on your driving licence, which will inflate your premiums when you come to renew your own policy.
Insuring the vehicle in your own name and then adding a more experienced driver will help reduce premiums, whilst remaining within the law.
Although motor insurance can be expensive, you can save yourself some money any stay on the right side of the law by observing the tips outlined above.