How to Reduce Your Car Insurance Costs in the UK

Car Owl

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Summary

• Shop around every year: Don't auto-renew. Switching can save you hundreds. See our renewal tips guide.
• Increase your voluntary excess: A higher excess lowers your premium. But make sure you can afford it.
• Build your no-claims bonus: Each claim-free year earns a discount of up to 30%. Protect it with a no-claims protector.

The average UK car insurance premium is now over £600 a year. For younger drivers, it can be £2,000 or more.

But there are plenty of ways to bring that cost down. Here are the most effective ones.

Shop Around Every Year

This is the single biggest money saver. Insurance companies rely on you being too lazy to switch.

• Use comparison sites: CompareTheMarket, GoCompare, Confused.com, and MoneySupermarket.
• Try direct-only insurers too: Some companies (like Direct Line and Aviva) don't appear on comparison sites.
• Start shopping 3 weeks before renewal: This is when prices tend to be lowest.
• Call your current insurer: Tell them you've found a cheaper quote. They may match it.

Increase Your Voluntary Excess

Your excess is what you pay before the insurer pays the rest. There are two types:

• Compulsory excess: Set by the insurer. You can't change it.
• Voluntary excess: You choose this amount. The higher it is, the lower your premium.

Increasing your voluntary excess from £100 to £500 can reduce your premium by 10–20%. But only do this if you can afford to pay £500+ if you make a claim.

Improve Security and Parking

• Park on a driveway or garage: Street parking is the most expensive to insure.
• Fit a Thatcham-approved alarm or immobiliser: This can reduce premiums.
• Add a dash cam: Some insurers offer discounts for dash cam users.
• Use a steering lock: Visible deterrents help, especially for high-theft cars.

Choose the Right Car

The car you drive has a huge impact on your insurance cost:

More Ways to Save

1. Add a named driver: Adding an experienced, older driver can reduce premiums for younger drivers.
2. Pay annually: Paying monthly costs 15–30% more due to interest charges.
3. Consider telematics: Black box insurance rewards safe driving. See our black box insurance guide.
4. Reduce your mileage: Lower annual mileage means lower risk and lower premiums.
5. Build no-claims bonus: Every year without a claim earns you a bigger discount.
6. Consider third party, fire and theft: For cheaper cars, comprehensive cover may not be worth it.

The average UK driver could save £250+ a year just by shopping around and choosing the right excess level.

Check your car's insurance group and history with our car history check.

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