Friendly towns boost car insurance premiums

What do you think the most important factor is when determining the size of your car insurance premium? Perhaps it's the car you drive, or perhaps it's your own driving record and whether you have amassed an array of speeding convictions? Or maybe it’s all about where you live.

According to car insurance companies, the places where you drive are as important as the way you drive. That should be good news for residents of Telford in the West Midlands, which has recently been named as the most car-friendly hotspot in the UK.

The survey, conducted by Virgin car insurance, judged Britain’s 50 most heavily populated towns and cities and ranked them against each other on categories such as petrol prices, the cost of parking and the number of speed cameras on the way into the main town or city. According to its survey, Telford earned the number one ranking ahead of Newcastle and Dundee. Meanwhile, at the other end of the table, Northampton was branded the least car friendly city thanks to high petrol prices, crippling levels of vehicle crime and few car parks.

So can we assume that Telford is the ideal place to earn cheap car insurance too? Well, not necessarily.

How does where you live affect your car insurance premiums?

Clearly there’s a lot to be said for a city that is ‘car friendly’. The less frustrated you are behind the wheel, the less likely you are to be involved in an accident. Indeed with fewer speed cameras around to catch you out, you’re also more likely to avoid driving convictions and so your car insurance premiums should stay low.

However, car insurers look at other factors when determining how the place you live affects your premiums.

Above all, they look at the rate of car crime in the area. This is done via postcode – so you may live in the same city as someone else with the same car and driving record, but still pay more based on the reputation of the streets in your area. You’re likely to be punished if you live in a student area for example, close to a university, where car crime is traditionally rife.

As a general rule of thumb, bigger cities have higher car crime levels. According to a survey by a comparison website the most expensive postcodes in the UK included NW1, in the Camden/City of Westminster area; HU3 in Hull; L8 in Liverpool; G42 in Glasgow; and M14 in Manchester.

Beyond car crime however, car insurance providers also take into account how high-risk the area is for accidents. This means that even if you live in an area where the car crime is low you could be punished if other drivers in the region are particularly reckless behind the wheel.

What can you do to lower car insurance premiums?

Assuming you’re not willing to uproot and move to a new home just to secure cheaper car insurance, there are several steps you can take to put yourself in better favour with the insurers.

If you live in a high crime area think about the security of your car. Fit car alarms and immobilisers, even wheel locks if you can, and let your insurer know they’re in place – there could be a discount for each measure you take. It’s worth getting in touch with your insurer before implementing these devices as several have their own recommended products that equate to discounts – Thatcham alarms for example, are particularly popular.

Think about where you park your car at night too. Typically car insurers will offer discounts to anyone in any area who keeps their car secure overnight by parking it in a garage. If there is no garage available to you, then at least park in a well-lit area.

You can’t do much about the driving reputation of others, but you can at least address your own driving skills. Taking advanced driving courses will earn you points with your insurer, as will remaining accident and conviction free. You could potentially build up a no-claims discount as high as 65 per cent with some insurers if you can avoid accidents for five years or more.

Beyond that there are simple measures that everyone should take to keep car insurance premiums low including shopping around annually with a comparison website as opposed to accepting high renewal quotes. Consider paying annually instead of monthly to cut out interest payments and reduce the number of named drivers on your policy.