Get in the fast lane for cheap car cover

As more and more insurers enter the market, premiums are being driven down. Sam Dunn shows how to find the right policy

They've waged price wars in the battle for supremacy on Britain's high streets and now retailers such as Marks & Spencer, Tesco and J Sainsbury are trying to conquer a new territory by driving down the cost of car insurance.

They've waged price wars in the battle for supremacy on Britain's high streets and now retailers such as Marks & Spencer, Tesco and J Sainsbury are trying to conquer a new territory by driving down the cost of car insurance.

Research from Confused.com, a website that enables consumers to compare premiums on motor insurance, shows the average cost of a policy slipping for the first time since 1998. This is down to greater competition among insurers.

Between July and September the average price - covering family saloon, economy hatchback and sports cars - fell by more than £6 to £710 per policy. "Tesco, Sainsbury's and M&S all want to write business and offer good rates [to customers]," says Kate Armstrong, managing director of Confused.com. "Other insurers are lowering their rates, and we are starting to see the effect."

M&S Money, the chain's financial services arm, which entered the car insurance market just six months ago, plans a big sales push next year. So motorists can expect even more competitive rates.

Sainsbury's went into car cover through its banking arm in July last year, while Tesco Personal Finance, a joint venture with Royal Bank of Scotland, first offered policies in October 2000.

Given the evidence that premiums are falling, motorists should review their own policies to see if they can get a better deal. With some 80 insurers selling car policies, there is plenty of choice.

"Providers have relied on [customer] inertia across all financial services," says Stuart Glendinning, marketing director for Moneysupermarket.com, a website that compares financial products. "But my feeling is that motor insurance is one [service] where people are more likely to shop around because of the significant savings to be made, and the renewal reminder sent out each year."

Esure, which underwrites policies for Sainsbury's Bank, says it cut one former Norwich Union customer's annual fully comprehensive policy from £1,452.87 (with basic roadside assistance) to £325.93, including full breakdown cover.

If you are buying a new car, there are similar savings to be made. A 25-year-old from Birmingham who wants to insure her brand-new five-door Peugeot 307 two litre - and is prepared to pay £100 excess on any incident - could save as much as £823, says Moneysupermarket. She could pay £2,123.10 with Nationwide but the cheapest policy is from the RAC, at a cost of £1,299.80.

Once you've found a policy, check the premium you pay every year in case your insurer starts raising its prices. "This is why it's so confusing," says Ms Armstrong at Confused.com. "It can be inexplicable if, after one year, the price goes up even if you have been a perfect driver. Amazingly, nearly half of people just don't shop around." In fact, most drivers don't tend to change insurers until they've had a bad experience such as a badly handled claim.

Although it's tempting to be guided solely by price, you also need to ensure you have adequate cover for your own motoring needs. For example, if you use your car on business, your policy will be cutting corners if the premiums are geared to local use such as school runs and shopping.

"Don't sacrifice cover to get prices down," says David Pickett, car insurance manager for Sainsbury's Bank. "People should always look for like-for-like policies. A lot of companies may take out elements [that you had before] to bring down price, so it's vital to check."

Insurers may offer a better deal by increasing your excess or removing policy clauses - for example, the provision of a replacement car after an accident. It's important, therefore, to clarify any changes suggested by the salesperson. Mr Pickett recommends making a checklist when buying car cover over the phone.

Watch out when using the internet, too: many insurers only offer standard-risk premium quotes online. Website www. insuresupermarket.com is another good place to visit as it includes quotes from a range of insurers.

Before you start comparing policies and prices, decide what kind of cover you want and how much excess you are prepared to pay if you have to make a claim. Most drivers choose fully comprehensive insurance, which pays out for damage to a third party, your car and to property. Extra features such as a courtesy car and breakdown support can be bolted on if you are prepared to pay more.

As with all financial services products, take a close look at the small print. Ensure you are fully covered for your requirements, and see if you can save money by checking what you really need and what can be jettisoned from a policy.

It may also be worth protecting your no-claims bonus - a move that in effect enables you to insure your own insurance. Years of careful driving can drive down the cost of cover by as much as 75 per cent in some cases - a saving worth paying to keep. Protecting your no-claims discount will usually cost a further 10 to 20 per cent of the premium.

News
A 1930 image of the Karl Albrecht Spiritousen and Lebensmittel shop, Essen. The shop was opened by Karl and Theo Albrecht’s mother; the brothers later founded Aldi
people
Arts and Entertainment
Standing the test of time: Michael J Fox and Christopher Lloyd in 'Back to the Future'
filmA cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Arts and Entertainment
Flora Spencer-Longhurst as Lavinia, William Houston as Titus Andronicus and Dyfan Dwyfor as Lucius
theatreThe Shakespeare play that proved too much for more than 100 people
News
exclusivePunk icon Viv Albertine on Sid Vicious, complacent white men, and why free love led to rape
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment
Stir crazy: Noel Fielding in 'Luxury Comedy 2: Tales from Painted Hawaii'
comedyAs ‘Luxury Comedy’ returns, Noel Fielding on why mainstream success scares him and what the future holds for 'The Boosh'
Life and Style
Flow chart: Karl Landsteiner discovered blood types in 1900, yet scientists have still not come up with an explanation for their existence
lifeAll of us have one. Yet even now, it’s a matter of debate what they’re for
Arts and Entertainment
'Weird Al' Yankovic, or Alfred Matthew, at the 2014 Los Angeles Film Festival Screening of
musicHis latest video is an ode to good grammar. But what do our experts think he’s missed out?
Sport
New Real Madrid signing James Rodríguez with club president Florentino Perez
sportColombian World Cup star completes £63m move to Spain
Travel
Hotel Tour d’Auvergne in Paris launches pay-what-you-want
travelIt seems fraught with financial risk, but the policy has its benefits
Arts and Entertainment
booksThe best children's books for this summer
Life and Style
News to me: family events were recorded in the personal columns
techFamily events used to be marked in the personal columns. But now Facebook has usurped that
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Programme Director - Conduct Risk - London

    £850 - £950 per day: Orgtel: Programme Director - Conduct Risk - Banking - £85...

    Business Analyst (Agile, SDLC, software)

    £45000 - £50000 Per Annum + excellent benefits: Clearwater People Solutions Lt...

    Finance Manager - Bank - Leeds - £300/day

    £250 - £300 per day + competitive: Orgtel: Finance Manager - Accountant - Bank...

    Compliance Officer - CF10, CF11, Compliance Oversight, AML, FX

    £100000 - £120000 per annum + BONUS + BENEFITS: Harrington Starr: A leading fi...

    Day In a Page

    Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

    Noel Fielding's 'Luxury Comedy'

    A land of the outright bizarre
    What are the worst 'Word Crimes'?

    What are the worst 'Word Crimes'?

    ‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
    Can Secret Cinema sell 80,000 'Back to the Future' tickets?

    The worst kept secret in cinema

    A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
    Facebook: The new hatched, matched and dispatched

    The new hatched, matched and dispatched

    Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements
    Why do we have blood types?

    Are you my type?

    All of us have one but probably never wondered why. Yet even now, a century after blood types were discovered, it’s a matter of debate what they’re for
    Honesty box hotels: You decide how much you pay

    Honesty box hotels

    Five hotels in Paris now allow guests to pay only what they think their stay was worth. It seems fraught with financial risk, but the honesty policy has its benefit
    Commonwealth Games 2014: Why weight of pressure rests easy on Michael Jamieson’s shoulders

    Michael Jamieson: Why weight of pressure rests easy on his shoulders

    The Scottish swimmer is ready for ‘the biggest race of my life’ at the Commonwealth Games
    Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

    The 'scroungers’ fight back

    The welfare claimants battling to alter stereotypes
    Amazing video shows Nasa 'flame extinguishment experiment' in action

    Fireballs in space

    Amazing video shows Nasa's 'flame extinguishment experiment' in action
    A Bible for billionaires

    A Bible for billionaires

    Find out why America's richest men are reading John Brookes
    Paranoid parenting is on the rise - and our children are suffering because of it

    Paranoid parenting is on the rise

    And our children are suffering because of it
    For sale: Island where the Magna Carta was sealed

    Magna Carta Island goes on sale

    Yours for a cool £4m
    Phone hacking scandal special report: The slide into crime at the 'News of the World'

    The hacker's tale: the slide into crime at the 'News of the World'

    Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
    We flinch, but there are degrees of paedophilia

    We flinch, but there are degrees of paedophilia

    Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
    The truth about conspiracy theories is that some require considering

    The truth about conspiracy theories is that some require considering

    For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn