Put the brake on rising motoring costs

Record rises in insurance premiums have made driving more expensive. But there are still ways to save
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The Independent Online

Driving a car has never been cheap, but insurance premiums for motorists reached such unprecedented highs last month that MPs were forced to launch an inquiry. The findings, revealed at a Transport Select Committee meeting on Monday, painted a less than rosy picture.

Premiums have skyrocketed by 40 per cent over the past 12 months, and young people are bearing the brunt with some costs rising by as much as 51 per cent. The average premium stands at £792 compared with £569 a year ago. And although politicians have expressed concern over the impact rising premiums will have on household finances, experts believe the costs could rise further as claim management companies mushroom in number and cash-strapped Britons take advantage of no-win, no-fee lawyers.

With a one pence increase in fuel duty, which took effect from October, adding more financial woe, it has never been more important to slash your motoring costs. While rising premiums may be beyond our control, there are many ways of saving money, including driving more economically.

"Adopting eco driving techniques is an easy way for consumers to reduce their fuel consumption to help purses, wallets and the environment," says Erik Nelson, a spokesman for the RAC. "By making a few simple changes to their driving style, motorists can help to drive down their cost of motoring."

For young drivers with a strong record of driving safely, there are ways to keep costs down. Young and experienced drivers with low mileage could benefit from cheaper insurance with Insurethebox, a provider which uses a satellite device fitted into your car to monitor movements and bases its premiums solely on an individual's driving habits.

The device also has the duel purpose of being able to track a car in the event it is stolen . Other specialist providers include Coverbox and i-kube, which also use tracking technology to monitor and reward safer driving with policies for 17- to 25-year-old drivers.

Little changes such as keeping your car as light as possible by taking off roof racks will immediately improve your fuel efficiency. You should avoid sharp acceleration and breaking, which can use up to 30 per cent more fuel and use air conditioning sparingly as this gobbles up fuel rapidly, particularly at low speeds. Slowing down your car may seem like a drag, but driving at 60mph uses up to 15 per cent more petrol than at 50mph, according to the Department for Transport. If you cruise at 80mph you could be using as much as 25 per cent more fuel than at 70mph.

The make and model of your car will also affect the premiums on offer. Since January, insurers have put cars into categories ranging from one to 50, with the highest group potentially facing the steepest premiums. Cars such as the Ford Ka, Peugeot 107 and Volkswagen Polo fall into the lowest group because they are cheaper to repair. Generally, a smaller, less-powerful car will represent a lower risk. Avoid cars that have been customised with alloy wheels and big spoilers. Insurers don't look kindly on modified vehicles and are likely to ramp up premiums.

But by far the biggest factor determining your insurance costs is whether you take the time to review your options. Comparing as few as five insurance providers can cut bills by 35 per cent, according to the Association of British Insurers, so it is worth taking a few minutes to compare quotes. It may also be worth investigating specialist policies too. Axa has a policy of rewarding motorists who have at least eight years' no claims with a discount of up to 90 per cent on premiums and some providers offer rates dependent on gender. However, Steve Sweeney, head of car insurance at Moneysupermarket.com, says don't take it as read that these providers are always a cheaper option.

"So many factors are taken into consideration by insurers that it is impossible to say that just because you are a woman that the specialist female insurance firms will be the cheapest for you. No single insurer is the cheapest for everyone and this is why comparing policies and prices is so important," he says.

Increasing your excess will also reduce your premiums and may work well for occasional drivers, but for anyone using their car every day a large excess is a risky strategy. Your car insurance company may offer a discount if you are willing to commit to an annual mileage cap, and if you have reduced your mileage, let your insurer know so that you don't pay for extra miles you are not actually covering.

"If, for example, you change jobs and have a shorter commute to work you could be saving money. Try to work out how many miles you will genuinely cover – but don't get it wrong as inaccuracy could jeopardise your claim," says Mr Sweeney.

Locking your car in a garage overnight will also help as more than 50 per cent of vehicle thefts occur overnight. You can also keep costs down by paying the whole year's premiums in one go, rather than in monthly instalments which incurs additional interest.

Ian Crowder, an AA spokesman, says that, regardless of age, improving driving habits will help lower costs. "An additional qualification like Pass Plus is useful, but the best financial incentive to get premiums down is staying within the law and not picking up speeding tickets," he says.

Expert View

Ian Crowder, AA

"As far as driving techniques are concerned, there are lots of bad habits that we get into. Make sure you're accelerating gently, instead of flooring it. Don't have a roof rack and avoid driving with your windows open at speed as this will increase resistance. It's also important to check regularly your tyre pressure – underinflated tyres can account for three or four miles per gallon."

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