Finding car insurance can sometimes be challenging, but as it's a legal requirement, it's something that we all must do.
With a dizzying number of choices on offer from hundreds of providers, finding cheap car insurance can be time-consuming.
There is no shortage of budget car insurance companies. The leading brands in the space all offer affordable policies for older motorists, with most offering tailored over 50s car insurance.
But, with so many providers in the market and so many deals to choose from, finding the best car insurance companies and cheapest car insurance can be a minefield. There's almost too much choice!
Fear not, as there are several methods you can employ to reduce your premiums, possibly by hundreds of pounds!
How can you get 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 consider the type of car insurance you're looking for.
There are three main types of car insurance:
The minimum level of car insurance for legal driving. Third-party cover only covers damage to other people and their property if you are at fault in a car accident.
Third-party fire and theft
The same as third-party cover insurance, with additional protection if the car is stolen or catches or is set on fire.
Fully comprehensive cover
The same as the above, but you'll also be able to claim on your own insurance if you have an accident that isn't your fault. Fully comprehensive cover is the most popular type of insurance among both old and young drivers alike.
Comprehensive cover 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 cost will be.
However, according to Money Supermarket, third-party fire and theft insurance costs more than fully comprehensive insurance.
This might seem paradoxical, but it's because when people search for cheap car insurance for new drivers, for example, they often seek lower coverage in an effort to reduce costs.
As such, the cost of a reduced level of cover has actually increased over time as it's commonly selected as a cheap car insurance option for new and younger drivers. This means lower coverage is associated with higher risk and more frequent insurance claims, hence why it's 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. In contrast, costs for over 50s can reduce right down towards £200, 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.
The more of the below factors that apply, the lower your premiums will be:
- Small, low emissions car
- Low annual mileage
- Car kept securely in a garage or on a drive and is fitted with an immobiliser
- You have a clean driving licence
- You have several years' no-claims bonus
Let's explore these - and the other factors that will influence your premium - in greater detail.
How to get cheap car insurance
What factors will make it easier - or more difficult - for you to get cheap car insurance?
Younger drivers, 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 you're older.
Generally, the price of car insurance steadily decreases as you age.
The longer your driving history, the cheaper your insurance, assuming you don't have serious driving convictions. This partly counteracts the increase in insurance costs some over-70s may see.
The more you drive, the more expensive your insurance will be. Drivers with a low annual mileage 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 singletons.
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.
If you're buying a new car, look out for the insurance group
Whether you're looking for a brand new car or browsing a second-hand car dealership, you will often see the insurance group advertised alongside other details.
The insurance group will be a number between 1 and 50. The lower the number, the cheaper you can expect that car to be to insure.
Avoid unnecessary add-ons
Car insurance companies will often assume you want things like personal injury and legal expenses cover included with your quote. Don't pay for these things if you don't need them!
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 regulated by the Financial Conduct Authority (FCA), 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 performance cars 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, the first step is to use a comparison site.
With links to most major cheap car insurance companies as well as premium car insurance companies, comparison sites 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 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 car insurance companies, including Direct Line, do not advertise their products on comparison sites.
You can also use these comparison sites to compare life insurance or other insurance products.
How to get cheap car insurance
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 Cashback 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!
It shouldn't take too long, and while 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, you might be able to get an 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.
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 over the phone.
Reductions are possible, and it allows you to ask any questions and double-check what you're getting rather than paying and something not looking right when you first browse your policy documents.
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.
Read your policy documents to avoid any nasty surprises when cancelling or altering your policy. If you do want to cancel your car insurance or make any other changes, you'll just need to know your policy reference number when contacting your insurer.
Short term car insurance
Temporary or short-term car insurance is designed for when you need to drive a new or different vehicle temporarily, such as if your own car is off the road. However, if you're driving a hire car provided by your insurer following a car accident, they will organise cover for you.
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 cheap car insurance quotes 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.