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The potentially huge cost of car insurance
is often overlooked in favour of focusing on the model, the
engine size and colour of your new car. Yet a few simple
questions to your car dealer might encourage you to think
more carefully before you buy. Ask about the insurance
classification of the car, for example. Cars are currently
classified in 20 different bands, with the most expensive or
rare cars in the top brackets.
The dealer may offer you a period of free
insurance as an incentive to purchase. Be sure to check the
policy details and what your premium would be after the free
period. Although it is hard to predict running and repair
cost, check the manufacturer’s figure for mile to the
gallon (allowing for an element of inaccuracy). You should
also enquire as to how often the car will need servicing and
what the re-sale value is likely to be.
Steps to
reduce your current premium
If you renew your car insurance year on year with the same
insurer, then now is a good time to get to grips with your
insurance options and search for other, more competitive
alternatives. A driver’s profile will constantly change
(your age, occupation, address, type of car); these factors
will affect your premium and the type of insurer capable of
offering the most competitive product and price.
Follow these steps to save yourself up to
several hundred pounds on your car insurance.
Search and
preferably buy your car insurance online
Many companies offer discounts when you buy online,
although the online purchase option is not available to
every driver – it will depend on your profile and
requirements.
Shop Around
When you buy car insurance the golden rule is to
get several quotes, so you are able to make sensible,
relevant comparisons on price and level of cover provided.
Don’t modify your car
Modifying your car will affect your premium.
Manufacturers work closely with insurers so that a
particular model of car can be insured to a standard. If you
modify the car then the factors on which your premium has
been based will have changed and the number of insurers that
will insure you is cut dramatically.
Voluntary Excess
You can reduce your premium by agreeing to accept a
voluntary excess. This is the amount you agree to pay in the
event of an accident.
Low mileage discounts
If your annual mileage is low, inform your insurer
as this can cut the cost of your insurance by 15%. Using
your car to commute to work will make your premium more
expensive.
DON’T LIE
When you sign a contract with an insurer it is
entered in ‘utmost good faith’. If you lie this can
allow an insurer to refuse payment in the event of a claim.
During the policy period you must keep the insurer up to
date with any information which may change the premium you
pay. For example, if you change address then you are obliged
to inform your insurer because your car may be more or less
liable to damage, or be involved in a crash. If you are
caught speeding and points are applied to your licence you
must inform the insurer. Any modifications to the vehicle
must be reported to the insurer. Failure to inform your
insurer of any updated information may result in your policy
being deemed invalid.
Pay your premium in full each
year
Many insurers charge a high APR if you pay monthly.
Don’t Buy a
High Performance Car especially if you are under 30
If you drive a sports car then expect a high premium,
especially if you are male and under 30. Insurers will take
numerous factors into account including your age and the
group rating system of the vehicle to be insured. Most
family cars fall into groups 6 to 12, unless they have
high-powered engines. The different groups available range
from group 1 (the lowest) to group 20 (the highest).
The Highest
Group Cars (Group 16-20)
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BMW 5 Series
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Aston Martin
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Audi TT
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Ferrari
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Porsche 911
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Alfa Romeo
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Jaguars
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Subaru Impreza
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Land Rover Range Rover
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Jeep Cheroke
Middle of the
range (Group 8-12)
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Ford Mondeo
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Peugeot 307,405
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Renault Megane
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Vauxhall Astra, Vectra
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VW Passat
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Audi A3/A4
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Toyota Corolla
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Land Rover Freelander
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BMW 3 Series
The Lowest
Group Cars (Groups 1-4)
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