Cheap Car Insurance for New Cars

Cheap car insurance for new cars

The automotive industry has been in a slump for the last two years with household names such as General Motors and Chrysler slipping into bankruptcy and other major manufacturers seeing their profits slump. However, the coming weeks may present a period of prosperity for the industry with the scrap page scheme still in full swing and new car registrations about to hit the market.

For new car buyers it’s a great opportunity to capitalize on some marked down retail prices and some enticing Government incentives. However, savvy buyers will look beyond the initial price tag and think of long term costs - including the vehicle’s fuel economy, road tax rates and car insurance premiums.

Why you must consider car insurance

It may not be very glamorous to think about car insurance premiums when shopping for a dream motor. However, the rates you receive for car insurance could make all the difference between whether or not you can afford to meet a monthly car payment.

This has taken on added importance with the AA British Insurance Premium Index reporting that car insurance premiums rose by 3.5 per cent in the April-June quarter. Unfortunately that’s unlikely to be the end of premium rises with a survey of insurance brokers conducted by AON reporting that 91 per cent predict a rise in rates during the third quarter. This is in contrast to the second quarter when every underwriter polled said rates would hold.

Insurance companies need rates to rise as they attempt to return to profitability. Their reserves are running low and only overcapacity in some areas fuelled by new market entrants and increased competition through comparison websites is keeping premiums low.

Can you get a car insurance quote before you buy a car?

You don’t have to own a car to get a car insurance quote. Think about the car you are interested in buying, then use a comparison website to compare the quotes available.

Comparison websites compare quotes from multiple providers – the leading websites compare deals from more than 100 companies – with one search. They are free to use and you can save the quote you receive to take with you into a dealership.

Insurers base premiums on a number of risk factors including the type of car you drive, your personal circumstances, where you live, your driving record and more. Clearly there’s a chance that your premiums may differ once you’ve settled on the right vehicle for you and the specifications that vehicle carries – however, getting a quote beforehand will help you budget before you buy.

How can you keep car insurance premiums for a new car low?

In these tough economic times there is added importance in creating a budget for all your costs each month – as such think about your car insurance premiums when choosing a car.

New cars are classified into insurance groups ranging from 1-20 (this expands to 1-50 in December). The higher the insurance group, the higher the premium is likely to be. Generally it is performance cars with large engines that fit into high insurance groups. Choosing a more conventional car that fits into a lower insurance group should help you save.

You may not want your car choice to be dictated by insurance costs, but this is particularly important for new drivers. Teenagers face sky high car insurance premiums due to their inexperience on the road and driving a high performance car could seriously limit their insurance options. Keep the choice conventional and simple – you can always upgrade once you have established your driving record.

Try and avoid cars with extensive modifications and those with letters after their name such as GTI. These tend to be sportier models and their parts may be more expensive to repair, meaning they present a higher risk to insurers.

Any more tips to keep car insurance premiums down?

Reducing your risk is the key to cheap car insurance. So look for cars with good alarm, immobiliser and tracking devices as all of these may earn discounts from insurers.

Beyond this, focus on your own driving – driving safely will help you build a no-claims discount. Pay attention to the policy options you choose. For example there’s no point paying for business cover for a car that you only use for social and domestic purposes.

As a word of warning, some dealers may offer free car insurance for a year as part of a package. Certainly this can be worth capitalizing on but make sure it provides the level of cover you need. At the very least note down the renewal date so you can shop around for car insurance once the introductory offer expires.