Cheaper car cover rather than no insurance at all

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By Rachel Jones
Know Your Money Editor

Car insurance can be an outgoing that many Britons may think they could do without during the credit crunch. But cutting back on car insurance may be a false economy and could see motorists forking out more further down the line should they experience theft, vandalism or be involved in a road accident.

Speaking about findings that show that some individuals are cutting back or cancelling car insurance policies, Neil Laird, Sainsbury's home insurance manager, says driving without insurance is an illegal offence.

Commenting on the trend for car and home insurance to be cut - another victim of the credit crunch - he continues: "Given the financial state we're in it's inevitable that people are going to be looking to make cut-backs, but it's a real concern when those cut-backs leave them vulnerable to far greater expense down the line.

"It can be tempting, with some insurance policies, to simply hope for the best. But policies vary a great deal and cancelling your cover or opting for a cheaper deal that doesn't offer adequate cover could have serious financial consequences when something goes wrong. Insurance should be viewed as a necessity, not a luxury."

But for those who may view their car insurance as a luxury during difficult times, what measures can be taken to reduce the cost of this type of cover to protect their wallets and purses?

Reducing the cost of car insurance

The Belfast Telegraph says it is important for drivers to get their hands on cheaper car insurance to combat rising everyday costs. The newspaper details its top ten tips - approved by the British Insurance Brokers Association - for reducing car cover costs. Switching insurance providers is one of the easiest ways to save some cash on a policy. But drivers need to make sure that they are still getting the best cover for them. Cheaper may not mean better. Younger drivers, individuals living in high-crime areas and those with powerful cars in particular need to ensure their insurance is adequate.

Increasing the excess from £100 to £250 can also save Britons around ten per cent, although they need to make sure they can afford to dish out the £250 in the event of an incident, the newspaper advises. Restricting named drivers and changing the main driver to a female can also push costs down. However, people need to make sure that the main driver is the person who is behind the wheel the most often, or they could find themselves out of pocket if their short-term money-saving ways are discovered.

And when it comes to insuring a vehicle, British cars can enjoy cheaper premiums because they cost less to repair, while owners of expensive cars that are more likely to be broken into - and those with powerful engines - may find themselves stuck with a more expensive policy, the Belfast Telegraph notes. Cutting down on mileage can also reduce premiums because people who drive fewer miles are less likely to have an accident. Individuals who are behind the wheel for less than 3,000 miles a year could enjoy a ten per cent discount. And forking out for insurance features that will never be used - such as third party cover - should be scrapped.

While fitting security devices can prove expensive, these could be recouped through cheaper premiums. A £100 immobiliser can slash £50 a year off a Ford Sierra, the newspaper asserts. And motorists lucky enough to drive a classic or sports car could bag themselves cheaper insurance from a scheme run by a group for drivers of similar cars.

The final tip from the newspaper is clear: do not claim unless it is absolutely necessary. Up to 65 per cent could be wiped off a premium for those who never make a claim, although in some cases, making a claim could be the only step for people to take if costs run high.

Driving forward cost-efficient changes

Cash-conscious drivers have already made some changes to reduce the impact of motoring costs on their coffers, a new survey suggests. According to Saga, 70 per cent of Britons have taken such steps. Two-fifths of individuals have cut back on the miles they drive each week, while 28 per cent are checking which petrol stations offer the cheapest fuel before filling up. Furthermore, 15 per cent of drivers are keeping on top of their car maintenance to boost fuel efficiency.
The research also reveals that 11 per cent of saving-savvy drivers are switching their heating and air conditioning on less frequently, while six per cent are taking part in a car-sharing scheme to reduce motoring costs.

Commenting on the findings, Andrew Goodsell, chief executive of the Saga Group, states: "It's a positive thing that people are taking practical steps in order to cut down on motoring costs. By adopting simple changes, such as washing cars by hand or checking tyre pressures more regularly, motorists can significantly cut their monthly outgoings."

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