5 ways to save on your car insurance as return to work sends rates up

Car insurance costs are going up in the UK as more people return to work. Here are five ways you can save on your premiums when it’s time to renew.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

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Car insurance is an unavoidable expense, and it can be a significant drain on your monthly budget. Since the start of 2021, car insurance costs have been slightly lower due to lockdown restrictions reducing the number of cars on the road.

But with most restrictions now lifted in the UK and as more people return to work, new data from MoneySuperMarket shows that car insurance premiums are going up. Even as rates start rising, the good news is that there are plenty of ways to save on your car insurance. Let’s explore five options that should be on your radar.

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What’s happening to car insurance costs?

According to insurance comparison site MoneySuperMarket, the average price of comprehensive car insurance increased by 2.5% between July and September, from £402 to £412.

This is the first time that premiums have increased since the last quarter of 2020. MoneySuperMarket attributes the rise to people returning to work, meaning more cars on the road and more claims.

Despite the increase, average car insurance costs are still 10.4% lower than they were this time last year.

Drivers in London continue to pay the highest premiums at an average of £595. This is followed by the North West, where average premiums are £489. The West Midlands comes in third place with average car insurance costs of £477.

Drivers in the South West, meanwhile, pay the least at £298, which is £114 less than the national average.

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How can you lower your car insurance premiums?

Now that it’s clear why car insurance costs are rising, let’s look at five things you can do about it. 

1. Choose your car wisely

Some cars are simply cheaper to insure than others. In fact, every car in the UK belongs to one of 50 car insurance groups. The groups are based on things like performance, new car value and the price of parts.

The lower the group your car is in, the cheaper it will be to insure. So, if you’re in the market for a new car and don’t want your insurance premiums to cost an arm and a leg, do your research to see what group different vehicles fall into. After that, get insurance quotes on the cars you’re considering to help you make a decision.

2. Compare car insurance quotes from multiple providers

Don’t sign up with the first provider you come across or automatically renew your current policy.

You could miss out on potentially cheaper and overall better deals if you don’t take the time to compare car insurance quotes from different companies. It takes less time than you might think, but you could save up to £253 a year according to MoneySuperMarket.

3. Bundle your policies

If you have more than one car in your household, or if you have life insurance, home insurance or any other type of insurance, try to use the same company. Some companies will knock a significant percentage off your premium for having multiple policies with them. If they don’t offer this to you automatically, you are well within your rights to ask for it!

4. Add a higher voluntary excess

If you can afford it, raising your voluntary excess could save you a good bit on the cost of your car insurance premiums. 

5. Pay annually

Your car insurance is likely to cost you more if you pay monthly because of interest charges. If you can afford it, the cheapest way to buy car insurance is to pay upfront. You can set aside a little money each month so that you can afford to pay at the start of each new insurance term.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

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