Car insurance. Cutting down your quote can be a tiresome task.
But while you’re probably pretty clued up already on how to save a few quid here and there, there may be a few hidden costs you’ve missed. Here we’ve laid out a road map of just a few of these policy potholes so you can give them the swerve and stay in the know.
Car insurance auto-renewal is the bugbear of many a driver. Whilst it can be helpful in some respects – there won’t be any chance you’re left driving uninsured if you forget to renew your policy – the pros seem to be out-weighed by the cons.
Take cancellation charges for example – if you go more than 14 days into a policy then you’ll pass out of the “cooling off” period, and could face a cancellation charge of up to £75 if you realise that you don’t want the policy after all. The trick here is to be aware of your renewal date and make sure to get your quotes in good time – it saves to shop around.
Similar to the last point, this issue is another one down to auto-renewal. If you’re on the ball when it comes to saving money then it’s likely that you keep tabs on things like renewal dates, but we know it’s easy for these things to slip your mind.
Where you could face difficulty – and potentially some pretty hefty costs – is if you’re left with invalid insurance at auto-renewal time. Because your insurer will simply retain the details of last year’s policy, if you don’t update them of any material changes, such as points on your licence from speeding, your insurance may not be valid. This is a criminal offence, so you could end up in a bit of a pickle should anything bad happen. Therefore, make sure to give your insurer any and all information that changes and, once again, be aware of your renewal date.
Monthly payment pricing
Many insurers will give you a range of options when paying for your policy. This can be quite helpful – for a lot of us, forking out a fee of £500+ in one go isn’t so feasible – but if you choose to pay for your policy monthly then the insurer may add interest on top.
Taking into account a typical interest rate of 18%, in most cases this will add upwards of £100 to your policy. This isn’t true for every insurer though, making shopping around even more important, but if you can pay all your policy off in one go then you’ll avoid those extra charges.
Your car insurance will usually come with a range of optional add-ons, such as breakdown cover to a guaranteed hire car. Despite the attractiveness and ease of purchasing these alongside your policy, they’re not always competitively priced. This is down to the insurer – they push up the premium for them simply because they don’t expect you to shop around. But what many people don’t realise is that these extra services are available as separate or ‘stand-alone’ policies from other insurers, often for a fraction of the price.
Take Motor Legal Protection for example. It’s designed to help you recover any losses you may suffer after a non-fault accident that aren’t covered by your other insurance, and almost all car insurers charge £25-30 to add this to your policy. However, we at Best Price FS offer it as stand-alone for just £9.75 a year, showing that sizeable savings really are possible on these ancillary products.
Policy adjustment fees
Anything from moving house to getting married will entail an adjustment to your policy and so will incur a small fee, often around £25-35. What’s worse is that this charge is simply to process the new information you’re giving them, and will be on top of any change to your premium that may ensue. Whilst there’s not very much you can do to avoid this, it helps to take a look at the insurer’s policy wording before you buy – some will charge simply to send you a new document, so consider giving these ones a sidestep.
So there you have them – though these charges may only be a small slice of your overall outgoings, they can make a real dent on your finances unless kept in check. Whether it’s minimising the cost of motor legal protection or opting for one-off payments, these sure-fire solutions should set your wheels rolling in the right direction.