MOTORISTS face a pricey year ahead as average car insurance premiums have shot up to £700.
That’s well above the previous average of £636 last January, according to data from Compare the Market.
Drivers have been advised to switch and save on cheaper car insurance tariffs while they’re still available.
The Financial Conduct Authority (FCA) banned the insurance “loyalty penalty” vroeër vandeesmaand, which saw customers who stayed with the same insurer year after year paying above the odds.
Providers saved their best deals for new customers, who could often save hundreds by shopping around for insurance each year.
The practice by insurers of hiking prices for existing customers, even if they didn’t make a claim, was known as “price walking“.
That’s now been banned. But while the regulator hoped this would level the playing field between new and existing customers, it appears to have simply pushed prices up for all.
But some firms have not yet hiked their premiums – so there are still good deals to take advantage van.
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Compare the Market director Ursula Gibbs said: “There is a brief window for savvy drivers to get this year’s car insurance at last year’s prices.”
Plus, there are other simple tips you can use to bring down the price of your policy.
Seven top tips to reduce your car insurance costs
Just because the average car insurance premium has shot up more than 10%, doesn’t mean there aren’t plenty of easy ways to cut the cost of your cover.
Switch and save
This is less lucrative than it used to be as insurance providers are no longer allowed to offer introductory deals to new customers.
But you can still cash in by switching and saving – as long as you do it stat.
Not all firms have hiked their prices yet.
Compare the Market estimate the average saving you can get by switching to the cheapest insurance deal is now £127 – up from £95 this time last year.
Gibbs said: “The savings available to customers looking to switch could reduce significantly as more insurers hike their prices.
“If your policy is coming up for renewal, it is a good idea to shop around for a better deal as soon as possible.”
Buy multi-car insurance
Multi-car insurance can sometimes save you money if you’ve got two or more vehicles at the same household.
Tailoring your policy around each car, including the renewal date, is a handy way to maximise convenience if you’ve got multiple vehicles in one household.
LV= previously told us that 10% of UK households with a joint-car policy saved around 40% on the cost of their premium by combining cover – that’s about £400 a year.
It’s now always cheaper, so you’ll have to do your research though.
Cut down your cover
Getting breakdown cover for your car might save you a fortune if you ever need it.
But if you’re an extra cautious motorist or just an occasional driver, it might not make sense to pay for the additional protection.
It’s perfectly within the law not to have breakdown or comprehensive cover on your car.
Aviva insurance expert Iain Hamilton told us this week: “Check what cover you’ve got as you may be paying for things that you do not need.”
It’s better to be safe than sorry – but if you’re feeling the pinch and want to save a few pennies, this could be an easy way to do that.
Boost your voluntary excess level
Kortom, this means you’re agreeing to pay more in the event you ever make a claim on your car insurance.
That doesn’t sound like a saving – but it can be.
Volunteering a higher excess on car insurance can actually reduce the annual premium.
But this is risky.
Don’t choose an excess that’s so high you can’t afford it, otherwise you could be unable to claim if anything does go wrong.
Double check your mileage
Tell your insurance provider exactly how much you drive each year without rounding up or down.
If you round up, that could mean putting you in a more expensive band – that’s because the more miles you drive, the more likely you are to have an accident.
And if you round down and get caught, you might lose your coverage in the event of an accident.
So be safe and sensible by being precise about your mileage – it could save you money.
Agree a lower mileage with your insurer
Installing a black box in your car and agreeing a mileage number with your insurer for the year could save you serious money.
London nurse Denisha told us in November she was previously paying £1,764 a year – and managed to cut her premiums down to £872.31 as long as she capped her driving by 3,000 myl.
That’s an incredible saving of £891.69.
A mileage number that low might not seem realistic for you – but have a chat to your insurer and you might be able to negotiate a good deal.
Only pay for the driving you do
If you only use your vehicle to go to the supermarket on weekends, you’ll get cheaper car insurance than someone who commutes in their car every day.
That’s because insurers know you’re much less likely to be on the road during the busy rush hour times.
Be straight about how you use your vehicle – similarly, don’t say you only use your car socially if you drive to work every day.
And if you’re taking out a multi-car policy and only one of the cars is a commuter car, only pay the added “commuter fee” on the vehicle driven to work.
Here are six apps you can use to cut the cost your insurance including ByMiles and Cashback.
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