Car insurance the key to cost cutting

It’s fair to say that rising fuel prices are taking their toll on Britain’s drivers with 67 per cent of those surveyed in a recent poll by a car insurance comparison website admitting that they are ‘very concerned’ that if fuel prices continue to rise they won’t be able to cope financially. Yet there are many ways to reduce motoring costs if drivers are willing to be economically efficient – Swift cover car insurance estimates that UK drivers could collectively save £8bn a year by adopting more financially savvy driving habits.

It’s not a case of ditching your car – though needless to say, the less you use your vehicle the more money you will save. Nor is it a case of swapping your car for another with a smaller engine, even though the fuel economy savings can be significant. No, the best way to save money on your motoring is to shop around for car insurance online.

Why should you shop around for car insurance?

The cynics among you will have realized that Swift cover is an online only car insurance provider. It has also recently been declared the cheapest car insurer online by a comparison website. Therefore it probably doesn’t come as much of a surprise to find the company highlighting the advantages of shopping for car insurance online.

However, you simply can’t argue with the statistics. Drivers in the UK could save £1.9bn annually on their car insurance if they took advantage of the cheapest deals. That doesn’t necessarily mean sacrificing the level of cover you have either – you can often find much cheaper policies that offer the same coverage you currently enjoy and even potentially more comprehensive policies for less.

Car insurance premiums have risen by 5.7 per cent in the last year alone – and it seems a fair proportion of drivers are finally getting the message with 195,000 a week ditching their old car insurance policies in favor of new deals.

Unfortunately however, a large number of policyholders are still falling into the trap of assuming that their existing policy offers the best deal. Even if you took out a car insurance policy one year ago and it was the cheapest then, it is unlikely to still be the cheapest today – even if your renewal quote has not increased.

This is because car insurance providers offer their most competitive deals to new customers only. For example, currently Lloyds TSB has an offer in which customers get two months’ free car insurance when they buy online. Churchill has a price guarantee for new customers to beat like-for-like quotes if you have been claims free for three or more years and the Post Office has a £50 cashback deal.

How do you find cheap car insurance online?

It’s not just shopping around that’s important – it’s where you shop.

Most car insurance providers offer their best deals to new customers. The AA, Asda, Barclays, Direct Line and ensure.com are just a handful of the insurers that offer significant reductions if you buy online rather than on the phone. This is because car insurers would ideally want all of their business to be conducted online – it saves on overheads and staffing costs. These savings are then passed on to the consumer.

While trawling from website to website in search of the cheapest deal may not be as time consuming or as expensive as making phone calls or shopping on the high street, it could still be a frustrating task which is where car insurance comparison websites come in. They save time and money because they search for the cheapest car insurance quotes in minutes and return offers based on your circumstances.

What else can you do to save money?

Even if you don’t want to change car insurance providers you can still save cash. Driving safely is the key as this will allow you to build up a no-claims discount and avoid driving conviction penalties – you could potentially save 75 per cent if you amass five or more years’ no-claims.

Enhancing the security of your car by fitting alarms, immobilisers and parking your vehicle in a garage overnight will also earn premium reductions. Reduce the number of named drivers on your policy and consider paying annually instead of monthly to cut out interest charges. Increase the voluntary excess level – as long as you can afford it should the worst happen – and ask your insurer if you can negotiate a premium reduction in return for a mileage limit or avoiding the rush hour.

The savings are there to be made so don’t pay over the odds for an outdated policy – shop around for cheap car insurance and find a deal that’s right for you.