The cost of car insurance is rising. … here's how to save money

The cost of car insurance is rising. … here's how to save money main image

According to the Association of British Insurers (ABI) the cost of car insurance rose by a whole 8% last year.   


A large part of that increase may be accounted for by an increase in the rate of insurance premium tax from 6% to 9.5% in November 2015. Even worse news is that in his March 2016 budget, the Chancellor of the Exchequer announced a further increase to the same insurance premium tax to 10% later this year.   

There is little the individual motorist is able to do about the rate of a tax imposed by the government, of course, but there are still ways you might save money on your car insurance quotes. Here are a few suggestions:  

Compare quotes

  • before choosing any motor insurance policy or before renewing the cover with your existing insurer, make sure to compare car insurance quotes
  • at Over50Choices, for example, we work on your behalf to gather quotes from more than 100 different insurers to find the cover that suits your needs and circumstances, at a competitive premium rate
  • there is little you can do about your age, of course, but if you are over 50, look for specialist over 50s car insurance - you are likely to find that your cover may be cheaper than that for someone younger than you


  • it might be a little known fact, but car owners who switch their motor insurance provider several weeks in advance of any renewal notice tend to make greater savings than those who leave things until the last minute
  • as your renewal date draws near, therefore, then is the time to start comparing car insurance quotes and to think about switching insurers if necessary

Payment in advance

  • the traditional way of paying for your motor insurance was to pay for the entire year’s cover in advance
  • as the costs of cover rose, many insurers offered the option of breaking up this payment into 12 monthly instalments
  • just as with any other form of what is effectively credit, however, you pay more if you pay in monthly instalments than if you pay the full amount when it falls due (upon renewal). Ether pay the money all upfront, or look for a provider who doesn’t charge you interest if you pay by direct debit

No claims discounts

when comparing your car insurance quotes, make sure you are comparing like with like and that each one reflects any no claims discount you may have built up

for those who have been driving for some time, the no claims discount may be appreciable, so make sure it remains fully transferable if you switch insurers


  • a way of reducing the cost of the premiums you pay is to increase the amount of excess to which you agree
  • a higher excess means that the uninsured risk is higher, so an insurer needs to charge less to cover that reduced risk – by the same token, though, you are going to be left with an increased amount to contribute in the event of any claim for loss or damage – so choose an amount you could comfortably afford, should the need ever arise   


  • bear in mind that many insurers include some elements of cover as standard – windscreen replacement, theft from the car, personal injury, for example – which others offer as optional extras
  • if you are interested in saving money, of course, you might want to avoid paying for cover that you do not need and avoid policies with too many extras included as standard. For example, if you are in a two car household, why pay to have a courtesy car under your policy when you don’t really need to?

There seems to be a steady and irresistible rise in the average cost of motor insurance. By following some of these tips and suggestions, however, you may still find ways of saving money.   

Further reading: Car insurance guide.      

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