Seven little-known factors that can hike car insurance costs by an extra £1,000 a year – how to avoid them
SEVEN little-known factors could be bumping up your car insurance without you even realising, experts have revealed.
The average motor insurance premium sits at £635, according the Association of British Insurers (ABI), so it’s worth cutting costs where you can.
But there may be some factors that mean you are forking out more than you should.
The Sun spoke to experts at comparison websites GoCompare, Compare the Market and MoneySuperMarket who revealed seven of these little-known reasons.
Avoiding these could save you over £1,000 on your annual premium overall.
Bad credit score
Everyone knows a bad credit score can impact your likelihood of being accepted for a mortgage or new bank card.
But you might not realise it can have a negative effect on your car insurance premium, too.
Julie Daniels, from Compare the Market, said car insurers carry out credit checks when they assess you for a premium and, if your score is poor, you could be offered a higher quote.
“If a motorist has a poor credit history, they may pay more for car insurance,” she said.
“That’s because insurers consider people with bad credit more likely to make car insurance claims.
“It could suggest to insurers that you’re not very reliable at paying back your debts.”
Luckily, you can boost your credit score with a few quick tricks, including getting on the electoral roll and paying any bills on time.
You drive an automatic
The number of motorists driving automatic is on the rise, with the latest figures from the AA Driving School revealing 324,064 took driving tests in automatics in 2022/23, compared with 87,844 in 2012/13.
But while driving without a stick is generally easier, you’ll likely pay hundreds of pounds more by taking out insurance for just an automatic vehicle.
Julie explained: “Our research found that car insurance for young drivers with licences to only drive automatics pay £760 more on average for insurance compared to those with licences to drive both manual and automatic cars.”
Parking in the wrong place
If you’re lucky enough to have somewhere to store your car off-road, it’s worth doing just that.
Leaving your vehicle where it is more likely to be damaged or stolen could see your premium spike.
Julie said: “Some insurers believe that where you park your car at night can influence the risk of it being stolen or damaged.
“According to these insurers, parking your car anywhere other than in the street is the safest option.
“That’s why parking your car in a car port or on the driveway of your home rather than on the street could help reduce the cost of your car insurance.”
Paying monthly instead of yearly
Some drivers opt to pay for their car insurance monthly instead of yearly, but it can add hundreds of pounds to the overall cost.
This is because when you pay monthly insurers add interest on top.
New data by GoCompare exclusively shared with The Sun found drivers that choose to pay for their car insurance monthly are charged £249 more than those who pay in one lump sum for the year.
Tom Banks, car insurance expert from GoCompare, said: “When you choose to pay for an insurance policy monthly rather than in one go, the insurer treats it like a loan and therefore charges interest.
“So, if you can afford to pay all in one go, it could save you some money.”
Modifications
Changes to your vehicle such as replacing the exhaust or adding shock absorbers to improve steering can all bump up your premium as they make it more valuable overall.
But even smaller tweaks to your car can see car insurance go up.
Alicia Hempsted, insurance expert at MoneySuperMarket, said: “Changes like decals, stickers, repaints and upholstery changes can also be considered ‘modifications’ that could affect your premium.
“Tell your insurance provider about any changes you make to your vehicle or there’s a risk that a claim could be rejected down the line.”
Mileage
How much you tell your insurer you intend to drive over the year will impact what you pay for your premium.
Underestimating your mileage can lead to you invalidating the policy and may mean the insurer doesn’t pay out in the event of an accident.
But overestimating your mileage can also see you pay too much, so it’s worth striking a fine balance.
Mr Banks, from GoCompare, explained: “We always recommend keeping a rough record of your annual mileage, taking into account any significant life changes that might have an effect – such as a job change – and using this to give as good an estimate as you can.”
Local crime rates
An increase in vehicle or part theft or damage where you live can affect your premium even if you haven’t been directly affected.
If you live in an area where this is happening, take steps to prevent something similar happening to you like parking your car in a safe space or increasing security around your home.
Your insurer will see you as better protected and will be less likely to bump up what they quote you.
It might be worth buying an alarm for your car if it has a catalytic converter, for example.
Recent data from insurer LV reveals nearly 100,000 of the gadgets have been stolen in the last three years.
Alicia from MoneySuperMarket said: “Improving your car’s security with an alarm or immobiliser can lead to discounts with some insurers.”
What is car insurance?
HERE'S everything you need to know...
Car insurance pays out if your vehicle is stolen, damaged, catches on fire or is involved in an accident.
As a minimum, it protects you against any damage you case to other road users, the public or their property – these are called third parties.
You only need to claim on your car insurance when an accident is your fault.
If another motorist is to blame, their insurance should pay out instead.
Car insurance, unlike home insurance, is a legal requirement and if you don’t have it you can be fined up to £1,000.
You can also have your vehicle seized and destroyed.
However, you don’t need to insure your car if it is classed as “off-road”, or holds a statutory off road notification (SORN).
The vehicle has to be kept on private land and not a public highway though.
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