UK HOUSEHOLDS should pay their annual car insurance premium up-front to save the most cash.
Customers could save up to £59 each year by paying for their annual car insurance premiums in one lump sum instead of making regular monthly payments, according to data from comparison site comparethemarket.com.
It said the average cost of car insurance paid monthly is currently £752 – but this drops to £693 if you can afford to pay for a year upfront, a saving of almost £60.
The reason it’s more expensive to pay in monthly instalments is that you are charged interest on the full amount, as it is effectively a type of loan.
The cost of car insurance has increased in recent months because second hand car prices have soared and there is a shortage of repaid parts.
That means it’s more important than ever to cut costs where you can.
Alex Hasty, director at comparethemarket.com, said: “As living costs and bills continue to rise, many families across the UK are feeling financially squeezed.
“Although it might seem easier to make smaller monthly payments, if you’re able to pay your car insurance policy annually, it could lead to helpful savings.”
There are other ways to bring down your car insurance premium.
Shop around and don’t auto-renew
Renewal quotes will rarely be the best deal so it’s best to search around each year.
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Don’t just try one comparison website either as each one will offer different deals.
The main firms include Confused.com, Compare The Market, MoneySupermarket and Gocompare.
According to MoneySavingExpert, the best time to get a quote is 23 days before you need the policy to start.
You could save up to £504 by following the so-called 23 day rule.
Tweak your job title
Tweaking your job title could save you hundreds on the price of your policy.
For example, saying you work in software rather than computer games can save £100.
But don’t lie about your job as it may invalidate your insurance if you need to make a claim.
Add an experienced driver to your policy
It might sound counterintuitive, but adding another person to your policy can bring down costs.
A young driver, for example, may see their premiums fall if they add a parent as a named driver.
Make sure the main driver on the policy is the one who drives it most often though – otherwise this is known as “fronting”, an illegal practice that could land you with a hefty fine.
Use cashback websites
Quidco and TopCashback may get you some money back when you take out a policy.
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It’s always worth checking to see if there’s any offers available.
You’ll need to click through to the insurer or comparison website from the cashback site to be eligible.
When we checked, you could get up to £36 cashback from GoCompare if you went through Topcashback, and up to £33 through MoneySuperMarket.
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