Spring clean your finances to save

Spring clean your finances to save
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With the official start of Spring this Friday, it’s an ideal time for Brits to spring clean their personal finances. esure offers tips on how to bring down the cost of car insurance premiums whilst making sure it’s good quality cover at the best price.

If you do less miles than the average, then say so
Give an accurate estimate of your annual mileage to your insurer. The more miles you drive, the more likely you are to be involved in an accident so make sure you’re not over-paying by over-estimating your mileage. In fact, esure’s in-house statistics show that average mileage fell by almost 5 per cent from 2007 to 20081.

Have the right excess - don’t hike the voluntary excess up too high so that you couldn’t afford to pay it!
You should never have an excess that you can’t afford to pay straight away but adding just £50 to a voluntary excess will reduce your overall premium.

Add on your spouse to benefit from the ‘family factor’
Insurers will charge a lower premium for ‘insured and spouse’ rather than ‘main driver with one named’ because of the so-called ‘family factor’. Once a child or loved one is in the car, a driver will usually behave more responsibly than they might have done as a ‘young, free and single’. So if you have a partner, add them onto your insurance - even if they will rarely, if ever, drive your car.

Shop around online
Always check the market to see if your current insurer’s renewal quote is still competitive. Online price comparison websites such as gocompare are a good place to shop around for the best deal.

Clear out your garage - and use it!
Most insurers offer additional discounts for cars that are garaged when not in use. There is less chance of theft, vandalism, smashed wing mirrors, and stationery collisions. If you have a garage, make sure it’s used to store your car rather than household junk to save you money.

Avoid modifying your car
If you want a car with lots of gizmos and gadgets, try to buy a model that has them as standard. Enhancing the performance of your car or fitting expensive accessories is likely to hike up your insurance premium or could leave your vehicle difficult to insure.

Pay your premium in a lump sum - not by monthly direct debit
Paying by installments in essence means that you’re paying back a loan to your insurer. Try to save up by making a note of what month your car insurance is due and transferring some money each month into a savings account. Alternatively, consider a low rate credit card.

Downgrading to third party, fire and theft could be costly
Choosing this basic level of car insurance may be cheaper at the outset but if you are involved in an accident and are at fault then you could face a hefty bill - even the cost of buying a new car if it is written off.

Think before scrimping on cover
Not opting for motor legal protection (MLP) may turn out to be a poor decision if you’re unfortunate enough to have an accident. MLP provides policyholders with the ability to recover uninsured losses if they are involved in an accident that is not their fault, for example, if they are hit in the rear by a third party and want to pursue compensation for any injuries sustained. esure offers up to £50,000 of cover for legal costs.

Buying a new car? Check the insurance group first
Drivers are potentially leaving themselves exposed to higher premiums by not checking ahead. A quarter (24 per cent) of motorists surveyed2 wouldn’t get an insurance quote before deciding on a new car purchase. In fact, only 70 per cent would check the insurance group of the make and model of car they’re looking to buy to ensure that the new insurance premium is within budget and that they are still insurable. It’s important to do your homework before signing on the dotted line.

Don’t speed - try to stay conviction-free
At esure, a single speeding conviction with three points will have a small effect on your premium - around £20 per year for a typical customer - but this will also depend on other factors such as claims history. Speeding convictions are usually three points - but can be six depending on the severity of the offence - so multiple convictions in a three year period might result in a ban, but if not, will definitely result in substantial increases to a driver’s premium. Avoiding penalty points altogether is one way to keep your premium down as low as possible.

Drive carefully and claim free
Building up a no claim discount is the best way to reduce your car insurance premium. Insurers’ scales are all different but many insurers go up to a 70 per cent no claim discount for drivers who haven’t claimed for over five years. esure’s scale rises from 70 per cent with an extra 1 per cent each year for drivers who remain claim free up to a maximum of 75 per cent.

Paying a small additional premium to protect such a valuable way to bring down your insurance premium makes sense - it could stop your no claim discount being reduced in the event of having to make a single claim, or more than one claim. But check the small print of your insurer’s cover as there are restrictions as to the number of claims that can be made over a certain period. esure offers ‘protection for life’ - giving drivers a guaranteed discount level regardless of any claims made throughout the life of their policy with the company3.

Don’t just choose a cheap ‘no frills’ option
Make sure you’ve got a good level of insurance cover and you don’t get caught-out. For example, check the small print to see if the policy has ‘driving other cars’ cover as standard. Drivers should think twice before choosing a policy that doesn’t insure them if they need to drive someone else’s car in an emergency.

Mike Pickard, Head of Risk and Underwriting at esure car insurance, said: “Now is the perfect time to do some spring cleaning - not just to your home but all aspects of your household finances. Savings on car insurance premiums are there to be had by shopping around and being smart when it comes to getting a quote. How you pay, who is on your policy and what excess you choose can all go some way to driving down your premium.

When motorists shop around for car insurance, price is usually at the top of their minds but having a good quality product is key as well as good value. If the unexpected does happen, drivers could fall short of some of the policy basics if they don’t check their level of cover so it’s worth reading the small print and not scrimping where it matters.”

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