How to get cheap car insurance

Car insurance is expensive but necessary. Here’s our guide to saving money without missing out on vital cover

It’s important to know what you need and what your options are (Getty)

Electric, hybrid, petrol or diesel; all for yourself or driven with others. If you have a car or are on the brink of buying a new motor, you are legally obliged to have insurance for it.

The average cost of car cover has soared in the last three months to a whopping £730 according to Comparethemarket, so it’s worth scouting around for a good deal, especially if you’re on a mission to cut back on your bills in 2020. The cheapest deals out there could cut £113 off your annual bill.

We may earn some commission if you click on a link in this article and buy a product or service, but we never allow this to influence our coverage.

Where to start

This is a massive market with a huge number of providers vying for your money. They don’t all offer the same depth or quality of cover or customer service though.

Researchers like Fairer Finance rate specific car-insurance policies from Aviva, Axa, DialDirect, More Than, Smart, John Lewis, Mercedes-Benz and Swiftcover particularly highly, for example.

Car-insurance costs

The price of insurance is based on risk. In other words, the car-insurance quote you’ll get is based on your own personal circumstances.

These can include somewhat unexpected details like gender (sorry gents, it may be illegal to discriminate on sex but you statistically have more powerful cars and drive more often than women), where you live and your occupation.

Age is an obvious factor because you’re probably more experienced if you’re older, as is the type of car.

If it’s pricey there’s more chance of it being pinched, for example, and if it’s powerful you’re more likely to get into an accident.

These reasons, and others, are why everyone pays different amounts for their cover.

Car insurance for young drivers

Younger and learner drivers tend to pay a lot more for car insurance based on experience, and because many buy special policies.

For new drivers, aged 20 to 24, the average annual premium for a fully comprehensive policy will usually come in at around £1,000, for example.

But the advent of telematics has been a godsend for this group, as well as those in other higher-risk demographics.

Car insurance with a ‘black box’

A black box or just a phone app linked to your car allows your insurer to monitor how safely you drive.

As a careful driver even the youngest motorists, aged 17 to 24, could save an average of more than £150 on their premiums by selecting a telematics policy, MoneySuperMarket has found.

Specialist car insurance

If you drive something special or your circumstances aren’t typical, you may find a standard policy either won’t cover your needs at all or will, but at a hefty additional charge.

Classic cars – often more valuable and harder to repair – are a good example and you may need a dedicated classic-car policy, especially if the vehicle is more than 15 years old or worth more than £15,000.

Tools like Comparethemarket’s new car-insurance premium checker could help you see whether you’re paying more or less than other drivers driving a comparable car. It is based on in-depth research into safety and security by Thatcham Research, which informs the car-manufacturing industry.

Then there are multi-car policies, designed for homes with more than one car registered to them. This kind of policy could cover you for up to five cars and could save a whole household a significant amount of cash each year.

Elsewhere, business car insurance (though this should be provided by your employer) and European car insurance (there are several countries in Europe where you may need additional cover) may also serve your needs.

What will my insurance cover?

It’s always important to read the policy details, no matter how long-winded or dull they may be. The onus is on you to know what you’re signing up for and what isn’t included in your policy.

Car insurance is a legal obligation in the UK, with significant fines and driving license penalties if you don’t have it.

Third-party cover is the cheapest solution, covering the very basics demanded by the law. If you are involved in an accident this kind of insurance will cover you if you injure someone and will pay for the repair or replacement of their vehicle. It won’t cover yours though.

Third party, fire and theft does the same thing but will also cover your vehicle if it is stolen or damaged by fire.

Comprehensive, or fully comprehensive, car insurance will cover the financial impact of an accident, regardless of blame and if it is stolen.

This is the most expensive kind of cover and can include optional extras like medical expenses as the result of an incident, the cost of replacing personal items that were in your car and legal fees.

Don’t assume that the more expensive a policy is, the more comprehensive the insurance is though.

Compare car insurance quotes online

If you’re looking for specific details in a policy, such as the availability of UK breakdown cover, try the rankings pages of researchers like Defaqto for independent insight.

Incidentally, among the providers who include this as standard, they give five stars to specific policies from 1st Central, Aviva, Dial Direct, Hastings Direct, NFU Mutual, Post Office Money and Tesco Bank.

They can also help pick out the best policies that include cover for other circumstances as standard like replacing personal possessions stolen from or along with your car, replacing child seats after an accident, legal expenses and the dreaded effects of picking up the wrong pump because it’s a cold, wet Tuesday and you just lost concentration for a split second...

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