With a dizzying number of choices on offer spanning possibly hundreds of providers, choosing cheap car insurance appropriate for you is crucial but often time-consuming and painstaking.
There is no shortage of budget car insurance companies. The leading brands in the space, the likes of AA, Admiral, Churchill, Aviva, Hastings Direct, Esure and LV= all offer budget car insurance plans that are affordable to most.
But, with so many providers in the market and so many deals to choose from, choosing the best and cheapest car insurance can be a minefield.
Fear not, as there are several methods you can employ to reduce your premiums, maybe fractionally, but possibly by hundreds of pounds!
In this article, we will look at ideas for how you can secure the best car insurance deals in later life.
How much is car insurance?
The price of car insurance varies each year depending on several factors.
Firstly, it’s crucial to bear in mind the type of car insurance you’re looking for.
There are three main types of car insurance:
Third-Party Car Insurance
The minimum level of car insurance for legal driving. Only covers damage to other people and their property.
Third-Party Fire and Theft
The same as third party insurance with additional protection if the car is stolen or catches/is set on fire.
The same as the above, but you’ll also be able to claim if you have an accident that isn’t your fault. The most popular and most comprehensive coverage of insurance available (and for most experienced adult drivers, the only option under consideration).
More coverage doesn’t necessarily mean higher premiums
If you’re looking for cheap car insurance, you might assume that the less coverage you choose, the lower the average cost of car insurance UK will be.
However, according to Money Supermarket, third party and third party fire and theft insurance come at higher prices than fully comprehensive insurance.
This might seem paradoxical, but it’s because when newer drivers search for cheap car insurance for new drivers, they often seek lower coverage in an effort to reduce costs.
In turn, the cost of lower coverage has actually increased over time as it’s commonly selected as a cheap car insurance option for new drivers. This means lower coverage is associated with higher risk and is actually often more expensive!
In most cases, those searching for budget car insurance should narrow things down to fully comprehensive insurance before getting started.
What are the average car insurance costs in the UK?
The average cost of fully comprehensive car insurance, according to Money Supermarket, is around £487 a year.
Finder put the figure at £471.
Even the cheapest car insurance for new drivers can push £2,000 or more, whereas costs for over 50s can reduce markedly right down towards the £200 mark, or even lower in some situations.
Money Supermarket puts the average cost of car insurance UK at £339 for over 55s, lowering to £313 for over 70s.
For a small, low emissions car with low yearly mileage stored securely in a garage or on a driveway, you can expect the lowest quotes possible if you also have a clean driving licence and long no claims discount.
How to get cheap car insurance
Anyone on the hunt for cheap car insurance should make themselves aware of the many factors that influence the price of their quotes:
The youngest, but also the very oldest, can pay more for insurance. The youngest drivers are obviously the hardest hit by insurance price increases.
Finding cheap car insurance for new drivers is notoriously tricky, even if you don’t learn until your later years.
Over 70s could pay slightly more than they paid in their 50s or 60s, but it’s often negligible, and as we saw earlier, the average cost is actually lower.
It’s safe to say that the price of car insurance generally steadily decreases as you age.
The longer you’ve been driving, the cheaper your insurance. This partly counteracts the increase in insurance costs some over-70s may see.
The more you drive, the more expensive your insurance will be. Ultra-low mileage drivers (under 10,000 miles a year) will be offered the cheapest insurance.
Be aware that whilst you may make a conservative estimate of your yearly mileage, insurers have ways of checking if you need to make a claim!
In the event of a large discrepancy in mileage, the insurer may not payout on a claim.
Being married decreases your risk on the road - or at least that’s what the stats say.
Married individuals tend to enjoy lower premiums than their single counterparts.
Some areas are considered a higher risk for theft or fire. Premiums will generally be higher around London and the South East, though, and tend to decrease in the north of England, Wales, Scotland and Northern Ireland.
The place you store your car can also influence the cost. Keep your vehicle in a garage or on a driveway whenever you can.
Claims History and Driving Licence
The more claims you’ve made, the higher your insurance. Every claimless year earns you a year’s no-claims discount. The details of those claims may also influence the cost of insurance.
Finally, any driving penalties or offences will also greatly influence your insurance prices.
What is the best budget car insurance?
There are many cheap car insurance companies around if you’re looking at how to get cheap car insurance.
All of the leading brands will offer some form of cheap car insurance. It might be a brand you’ve heard of before, or it might not. Whilst insurance in the UK is heavily regulated, it’s still always worth doing plenty of research into the companies on your shortlist before taking a policy.
If you go through a broker, you’ll need to worry about this less, but you may pay more for a broker’s service. Brokers are best used when you’re looking for some form of premium car insurance for expensive or classic cars.
For everything else, the main way to get cheap car insurance is through a cost comparison site.
Finding the best car insurance deals
If you’re looking for the best car insurance deals, then the first step is to open a cost comparison site.
With links to all the major cheap car insurance companies as well as premium car insurance companies, comparison sites do take most of the legwork out of the insurance buying process.
There are a few different comparison sites available, but the main four are:
These sites are reliable, and they keep competition between providers ultra-high, often resulting in lower prices and better deals.
They also make comparisons as easy as possible, and you’ll be able to browse quotes quickly and easily from within a single window.
Moreover, since you’ll be able to input all relevant variables, you’ll get quotes that are highly tailored to your specific details and vehicle, narrowing down your options.
Some cheap car insurance companies, such as Direct Line, do not advertise their products on comparison sites.
How to get cheap car insurance: The formula
Step 1: Check Cashback Offers
Cashback sites such as Top Cashback will provide you cashback if you order insurance via their site.
They even offer cashback if you grab insurance via a comparison site. As of early-to-mid 2021, Top Cash Back offers some £25 to £50+ on various insurers and comparison sites.
For those who don’t know how cashback works, you simply make an account with the cashback site and click through the links to insurers and/or comparison sites. These sites will log your visit and track what you do on the site.
Once you buy insurance from that visit, without closing that browser window, the comparison site/insurer will alert the cashback site that you’ve completed the cashback terms.
The cashback site will then release your cash, which you’ll be free to withdraw!
Sounds too good to be true?
Cashback can save dedicated users thousands of pounds a year. In 2009, a lady named Barbara Wakerell, who featured in Money Saving Expert, managed to buy a year’s car insurance for 96p using a combination of cashback and offers!
Step 2: Cross-Check Comparison Sites
Different comparison sites use different methods to calculate your insurance costs.
For the best car insurance deals, you’ll ideally need to compare the comparison sites!
Sounds like an ordeal? It shouldn’t take too long, and whilst you don’t need to compare all of the comparison sites, it’s better to get a second opinion on whatever deal comes through.
Step 3: Cross-Check With Direct Line and Brokers
You’ll then want to cross-check your comparison site quotes with Direct Line (who aren’t on comparison sites) as well as insurance brokers.
You might have a local insurance broker that you’ve heard of/used before. You can find local insurance brokers by searching online.
Step 4: Cross-Check with the Insurer
The next step should be to input your information directly into the insurer’s website. This allows you to compare the quotes given by the comparison site directly with the quotes provided by the insurer themselves.
You’d expect the quotes to be pretty similar, but there can be a fair bit of variation here.
Step 5: Check for Deals
Insurers sometimes run deals. For example, AgeCo is currently offering a £35 Argos or Amazon voucher when you purchase insurance from them. It might not be much, but it can shave something off a competitive quote, and you can sometimes find better offers.
It’s also worth checking how breakdown cover increases the overall cost of your policy. It might be cheapest to buy breakdown cover separately.
Step 6: Haggle a Better Deal
Finally, it’s always good practice to phone the insurers on your shortlist and try and haggle a better deal directly over the phone.
It’s unlikely that there’ll be any significant discrepancies, but reductions are possible, and it allows you to ask any questions and double-check your details.
Can I cancel my car insurance?
Car insurance policies typically cover a 12-month period, but you can cancel any time you want or need to (e.g. you stop driving).
Car insurance sold in the UK always comes with a 14-day cooling-off period in which you are entitled to a full refund if you terminate your cover.
Beyond that, you can still cancel your car insurance. Doing so might involve paying an admin fee and cancellation fee. You should receive a partial refund, but you'll probably be slightly out of pocket overall.
How much of a refund you’ll be entitled to depend on how long you’ve had the cover for.
You’ll also probably lose that year’s no claim discount.
If you’re considering cancelling because you’ve changed cars, then you can transfer your insurance from one car to another.
Also, read up on the T&Cs of your policy to avoid any nasty surprises when cancelling or altering your policy.
Short term car insurance
Temporary or short-term car insurance is designed for when you need to drive a new or different vehicle temporarily.
Short-term car insurance can last as little as 1 hour up to a maximum of around 28 days. You might find that it’s limited to those who’ve held a licence for longer than six months to a year, and most providers won’t offer temporary car insurance to those under 18 or older than 75.
The cheapest temporary car insurance can again be found with comparison sites like Confused.com or Compare the Market. Some major insurers, such as Aviva, offer temporary car insurance, but most are specialist providers.
Before you search for the cheapest temporary car insurance, it’s always worth phoning your existing insurer to see what they can offer.
You might find that they can offer you a one-time deal or recommend you to one of their partners that deals specifically with short-term car insurance.
How to get the cheapest car insurance in later life
Grabbing budget car insurance is easier than ever, and whilst premiums do increase over time, the ultra-high competitive landscape created by comparison sites helps keep costs relatively low.
The formula for finding the best car insurance deals and companies involves research and cross-checking. The more you shop around and take notice of deals and cashback, the cheaper insurance you can get.