Finding the cheapest car insurance

Finding the cheapest car insurance used to be simple. You asked a broker to give you quotes for third party only cover and that was practically guaranteed to be much cheaper than comprehensive insurance. Times have changed though. Price comparison sites, such as Prudent Plus Car Insurance have replaced many brokers, and insurers such as Direct Line or Admiral have taken to selling policies onlineand in real terms the cost of comprehensive insurance has fallen whilst the price of third party only has risen.

Is third party insurance still the cheapest?

Not always. Sometimes it is even more expensive than comprehensive.

This is because insurance companies found that people who insured their cars in the cheapest possible way tended to have more accidents than those who were prepared to pay more for comprehensive cover. It was concluded that in general buyers of third party insurance cared less about their cars, spent less on maintenance and were not as careful at protecting them on the road.

A higher level of claims for this lower priced cover meant that premiums rose whilst intense competition drove down the cost of comprehensive policies. This means that if you are looking to save the most money you should get quotes for both third-party and comprehensive.

Is it cheaper to pay monthly the car insurance?

The opposite is true. If you pay monthly instead of paying for all your insurance in full at the start of the policy you are in fact taking out a loan. This is provided by either an independent finance company acting on behalf of the insurer, or the insurance company itself. In either case you will be charged interest and/or management charges on top of the premium and this could add up to a substantial sum.

Also, many insurers will not accept monthly payments and so this could cut down your choice of policy substantially and it could make you miss out on some good bargains.

Why does my postcode matter?

Insurers work out their premiums based on statistics and if they find out that, statistically, a particular postcode has a high level of accidents or claims for theft or malicious damage they will increase the premiums for people living in that postcode or even decline from offering a quotation at all. Conversely there are some postcodes with very low levels of claims and these attract much lower premiums.

Which is the cheapest car to insure?

Usually the smaller the engine of the car the cheaper the quote will be, but this is not the only factor. Insurers like to provide insurance cover for cars which are not likely to be involved in an accident, and there are many modern technological advances such as lane guidance systems and steering collision avoidance technology which cut these down considerably. There are also safety features such as multiple airbags and energy absorbing steering wheels in modern cars that reduce injuries to car occupants and therefore cut down costs. There is therefore more to making a car attractive to an insurer than simply a low maximum speed.

All these factors and more are taken into consideration when cars are given an insurance group classification by an institution called Thatcham Research, and the lower the group that a car is in the less the insurance is likely to cost.

Which is the cheapest insurance company?

There is no single company which is cheaper for everyone. Different insurers target different types of motorist; some for instance concentrate on female drivers, some on sports cars, some on motorists with many years of safe driving experience. Then again there are those that will not insure certain postcodes, and some that will not insure particular cars. If you want to find the cheapest insurer then you are far better using a price comparison site which will get you quotations from a large number of insurers rather than trying to get quotes from those companies that you consider to be the cheapest.