How I Cut my Car Insurance Renewal Premium by 16%

I know it's not the most interesting subject but most of us are keen to save money right now which was my motivation for not accepting my insurers renewal premium this year. If I had, I would now be £78 out of pocket with less cover as far as I can tell.

As you might imagine, I was more than a little annoyed too as last year my insurer was quite competitive but didn't feel it necessary to repeat such a good deal this time. In fact, as a result of my online research and comparison shopping, I have discovered a common little trick many insurers use that may just explain this.

Apparently, when you shop around for car insurance as a new customer, you are offered discounts that aren't available to existing customers. So that bargain premium you got as a new customer isn't such a bargain after twelve months when you get your renewal quote letter. In effect, existing policyholders are

subsidising the discounts insurers offer to attract new customers. Whilst this is perfectly legal and what seems a common business practice, I can't afford to pay for other people's car insurance, nor do I want to. So what's the answer?

Well it's simple really and a shame that more consumers don't take action instead of just accepting their renewal quote. Shop around a good two weeks before your policy renewal date using two or three of the financial price comparison sites so you get an accurate picture of what the market is offering. Then simply compare what your insurer is offering and pick the best deal.If like mine, your insurer won't repeat the great deal you got last year, become a new customer of another provider and benefit from those extra discounts.

But why stop there, you can save even more money by reducing your risk where possible. How far you want to go is up to you but this is what I did:

1. Checked my annual service book and worked out how many miles I have driven over the last two years. I could then give a more accurate annual mileage figure which was less than the guesstimate I have given before. This should reduce the perceived risk to an insurer and hopefully your premium.
2. Made room in my garage and now park my car there overnight. I have no doubt that this reduces my risk to an insurer and had an impact on my premium this year.
3. Kept my wife as a named driver on the policy. Initially I was going to remove my wife from the policy as I mistakenly thought it would reduce the premium.

In fact, in many of the quotes I received the price went up without my wife as a named driver. Why? Well it appears that having a 'low risk' driver on the policy averages out the total risk and so reduces the premium.

If you wanted to take this further you could fit better security to your car but mine already has a standard alarm/immobiliser so I couldn't do anything there.

One further point to add is that when comparing policies, don't be tempted to just compare prices. Make sure you are comparing policies that are at least as good as your existing cover. Also, look for reviews of the policy you decide to buy that are written by real customers. I found reviews at uk insurance index.co.uk which only allows car insurance reviews from genuine customers.