Car insurance - A Buyer’s Guide

Car insurance - a buyer’s guide

Few financial products are more competitive than car insurance. With more than 100 car insurance providers in the UK alone, a host of brokers and a rising number of comparison websites it would be easy to be overwhelmed with the choice available on the market.

However, choice can be a good thing and as long as you are educated about what to look for and where to look you should have no problem picking up a bargain no matter what your circumstances.

Here we examine the various car insurance options and how to choose the right policy for you.

What are the different car insurance options and who are they right for?

Broadly there are three types of car insurance available in the UK - here we look at each one and who they are right for:

Third party car insurance: Insures you against damage to other people’s vehicles and their property as well as injuries suffered by third parties. It does not offer any protection for you or your vehicle.

Recommended for: Third party car insurance is best for those on a tight budget or those who drive relatively inexpensive cars, for whom comprehensive car insurance would be inappropriate. First-time drivers are particularly well-suited to third party policies while building a no-claims discount.

Third party fire and theft car insurance: As with third party car insurance but with protection for your own vehicle against fire damage and theft.

Recommended for: Anyone with a tight budget, but who wants some basic cover for their own vehicle.

Comprehensive car insurance: As with third party fire and theft, but comprehensive cover also protects your vehicle in the event of an accident and will usually pay for repairs or a replacement. Most comprehensive policies offer a number of additional options such as windscreen cover, a courtesy car, legal cover, breakdown insurance, a guarantee on repairs, cover for personal belongings and more.

Recommended for: Any driver that can afford it should take out a comprehensive policy as this will provide the most peace of mind – just be careful to select the options that are right for you as they vary widely from insurer to insurer.

How to choose the right car insurance policy

Think about what level of cover you want before you start to shop around for car insurance. If you are looking for comprehensive cover then also think about the policy options you require. For example, do you need a courtesy car? It may not be necessary if you have access to another vehicle. Or do you need breakdown cover? Again, this may not be necessary if you have separate breakdown cover.

Don’t pay for options you don’t need but do look for as thorough a policy as possible. To compare car insurance policies you can use a comparison website – the leading websites are able to compare quotes from more than 100 car insurance providers. There is no charge for using these services and as most insurers offer their cheapest rates online it makes sense to compare quotes in this manner.

The comparison website will ask for information about you, the car you drive and your personal circumstances. By inputting this information it will then return quotes from a range of providers with the cheapest quote listed first. Just remember that cheapest is not always the best and you should make sure you have adequate cover, whichever policy you choose.

Can you save money on car insurance?

Comparing quotes online is the key to finding cheap car insurance. However, there are additional ways to save money.

For example if you’re a new driver consider undertaking the Pass Plus course as this can help you save as much as 35 per cent on premiums. New drivers can also take advantage of rapid bonus schemes allowing them to earn a full year’s no-claims discount in around nine months; or agree to a mileage limit if they don’t use their car too frequently.

Boosting the security of your car will also help you secure discounts with most insurers. Car insurance providers generally have alarm, immobilizer and tracking systems that they recommend – installing them in your vehicle could cut premiums by as much as 10 per cent. There are also savings to be made if you can park in a garage overnight.

Finally don’t forget that paying for car insurance annually will cut out monthly interest charges, while raising the policy excess will also help you save.