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Car insurance: How to keep your premium cheap

Your car insurance premium is about to get more expensive, thanks to an incoming Insurance Premium Tax hike. Here are five tips to help you keep the cost down.

Guess what? Another part of motoring is about to get more expensive in the UK. Shock horror, we know. Chancellor Philip Hammond is about to raise the Insurance Premium Tax (IPT) rate, as outlined in the 2016 Autumn Statement.

The 1st of June, 2017, is when the rate changes from 10 to 12 per cent. At this point, insurance brokers will soak up the increase with your help – and by help we mean an increase in your premium.

Latest figures reveal the average car insurance premium in the UK is £781, which is quite painful. So here are five useful tips that should help you save some money.

1) Auto renewal is bad, mmkay

Let’s be honest, companies use auto renewal because most of us are too lazy or too busy to turn it off, which helps your provider ramp up the price a bit and, if you do change your mind, you may be hit with a cancellation fee. Win win for the insurer.

The best thing to do is put a reminder in your calendar (phone or paper) and you will be able to shop around. Setting it a week early will give you time to use price comparison websites.

2) Use price comparison websites

Bit of a necessary evil, but price comparison websites are easy to use. Enter your criteria, then wait for the numbers to roll in. Once you have a number, you can try and haggle on the phone to see if can get a better deal.

Bear in mind some car insurers, such as Aviva and Direct Line, choose to avoid being on price comparison websites so a good-old fashioned phone call could save you a few quid. Price comparison websites aren’t always the cheapest.

3) Drive carefully

Not such useful advice if the damage to your licence has already been done, but trying to be safe driver helps in the long run. Having a lengthy spell of never claiming will help bring the cost down to more palatable levels, especially if you own a performance car.

4) Never lie and avoid useless extras

Lying may help you drop your insurance premium cost, but it will bite you in the arse if you actually have to claim. Insurers will try to get out of a claim as best they can so telling them you are a non-smoker, only for them to find out your car was burned to a crisp by a cigarette, will potentially void your insurance.

The other thing is extras. Like when hiring a car, you will be presented with various extras that can really bump up your final insurance premium cost. Breakdown cover is nice, but do you really need it? Be ruthless, but also consider future expenditures.

5) Renew before the 1st of June, 2017

Perhaps insurers have already started to increase their prices ahead of the IPT tax increase, but it is probably still worth looking at renewing before the IPT increase rather than after. Two per cent on £1,000 is a noticeable difference, after all.

Cheaper car insurance: Any other tips?

Here are a few more pointers for keeping your car insurance premium as cheap as possible.

  • Avoid putting lots of people on your policy because it can cost you more
  • Driving fewer miles can help, too, although too few will work against you
  • Consider a tracking device or immobiliser
  • Increase your voluntary excess
  • Consider a black box telematics policy
  • Actually put your car in the garage
  • Fit a dash cam for proving your own innocence

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