Protecting your no-claims bonus can prove a wise step: In a time when car thefts are soaring, Nic Cicutti explains another possibly expensive risk facing the motorist

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The Independent Online
CAR showrooms are preparing for the August rush to buy new M-registered vehicles.

Up to 10,000 of the 300,000 cars expected to be sold next month will probably be stolen by this time next year and half as many again may be broken into, leading to insurance claims and potential loss of no-claims bonuses.

Almost 600,000 cars were stolen and 925,000 broken into last year, says the RAC. Its car crime digest in May showed that 3.3 per cent of motorists in England and Wales had their cars stolen last year. owners in Northern Ireland ran a 2.2 per cent risk of theft.

Anyone claiming for car theft from their insurance will almost certainly lose two years' no-claims bonus. The difference in cost the following year can be striking.

OneQuote is a telephone quotation service that claims to be able to find the cheapest available insurance quote aside from direct insurers. Clients are given the price and insurer's address and telephone number so they can arrange the policy themselves.

A spokeswoman said: 'The figures show that if the no-claims bonus is unprotected the cost of renewing cover after a car theft has taken place will rise by anything between 27 and 47 per cent the following year.

'Costs will go down again the following year but will not return to the previous level for another 12 months.'

The company's cheapest quotes before a theft are pounds 260 for a Middlesbrough driver, rising to pounds 373 if his car is stolen. In Bristol, the best price from OneQuote is pounds 190 before a theft and pounds 346 afterwards.

Protecting a no-claim bonus is the best way of ensuring that insurance costs do not spiral out of control after a car theft.

But, according to OneQuote's figures, companies which are cheapest for unprotected cover may not be so good when it comes to protecting the bonuses.

For Bristol, protecting the no- claims bonus of a 35-year-old driving a G-registered Toyota Corolla adds just pounds 14 more to a policy costing pounds 190 with Service Motor Policies, a Lloyd's syndicate.

Ibex, another Lloyd's syndicate, offers a policy without bonus protection for pounds 291 in Middlesbrough. If the car is stolen the cost rises to pounds 437. Protection would have kept the premium at pounds 320.

Other considerations apply to direct insurers - neither Churchill nor Direct Line is prepared to protect anything less than a five-year no-claims bonus.

OneQuote: 0891 515515.

Car buyers with Midland Bank credit cards are being offered a leaseback deal as part of a loyalty scheme that lets them make much smaller monthly payments than with an ordinary loan.

The scheme, similar to one run by many motor manufacturers, is offered through Swan National, which the bank bought last year.

It works by agreeing an initial deposit on a car plus a repayment period. The cost is less than a normal loan because it is only based on the partial value of the car.

A driver buying an Astra 1.4 Merit, worth pounds 10,200 and driving it for less than 9,000 miles a year would pay pounds 119 a month, assuming a 30 per cent deposit.

At the end of the period, if the buyer decides to keep the car, he or she pays an additional amount.

A Midland Bank cardholder buying a car worth pounds 10,000 would also be entitled to 1,000 loyalty points, redeemable against Midland's gift catalogue. For instance, annual travel cover for a single person costs 80 points plus pounds 55.

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