Putting the brakes on car insurance prices

Over the last couple of years, the cost of car insurance has gone through the roof, but the brakes are finally being applied.

According to the Association of British Insurers (ABI) – whose data is based on the real prices paid by drivers – the average car insurance policy taken out between January and March 2024 cost £635, just £8 more than the end of last year.

It’s the smallest increase we’ve seen since the start of 2022, when prices went up by just £3.

Although it’s been some time since we’ve seen much lower prices, the £8 increase is considerably better than the increases we saw last year.

Premiums during the fourth quarter of 2023 went up by £66 – more than the increase for the whole of 2022.

However, data from comparison sites – which use their own price insurance indexes – suggest prices are starting to fall.

Go Compare says the average policy taken out between January and March 2024 was £447, down by £18 from the previous quarter. And Confused.com found similar results for the same period, with the average policy costing £941 - £54 less than the end of last year.

Even though prices are starting to stabilise, car insurance is still likely to take a significant chunk out of your budget.

Here’s what you can do to make sure you’re getting the best price

Whether you pay for your insurance monthly or annually, there are ways to keep your costs down.

Get your quotes 26 days before renewal

You’ll get the cheapest quotes 26 days before your renewal date, according to Go Compare. The later you leave it, the more expensive your quotes will be. You could save as much as 55% by renewing early.

Shop around

It might be easier to let your insurance auto-renew, but you might not get the best price. Check out deals from other insurers using price comparison sites. And don’t forget about insurers who don’t appear on those platforms.

Haggle

Some insurers are open to negotiation if you’re not happy with your renewal quote. Just make sure you do your research before speaking to them so you can tell them what other deals are on the table.

Interest-free credit card

It’s generally cheaper to pay for insurance in one lump sum rather than in instalments because you avoid the interest that comes with monthly premiums. If you can’t afford to pay for your insurance annually, you might be able to save money by using an interest-free credit card to cover the full cost. Just make sure you’ll be able to pay it off before any interest charges kick in.

Add another driver

Adding a lower-risk driver, e.g. someone with a long no-claims history or older driver, to your policy can bring the cost down. But don’t be tempted to put them as the main driver if they aren’t – even if it’s much cheaper – this is called ‘fronting’ and is a type of insurance fraud.

Get a black box

Black boxes – telematics – can often be cheaper because they show you’re a safe driver. The black box records your driving with a small GPS fitted to your car. You might need to follow certain rules e.g. having a curfew.

Know your miles

Make sure you’re entering an accurate number of miles. If you overestimate the number of miles you drive, you might end up paying more than you need to. Similarly, underestimating could invalidate your policy.

Check your job title

Tweaking your job title could save you some money and is perfectly legitimate as long as the option you choose still accurately describes your role. Some occupations are more likely to claim than others, so face higher costs.