Five ways to slash the cost of your car insurance

With more people driving uninsured to save money, here are some useful tips to reduce your car insurance premium.

Ever wondered why your car insurance premium seems to rise every year, despite the fact your number of years of No Claims Discount (NCD) has increased?

Well you can point the finger of blame - in part at least - to the increasing number of uninsured drivers on our roads.

900k uninsured drivers

According to the Motor Insurer's Bureau (MIB) a shocking 900,000 drivers under the age of 30 are currently driving uninsured, of which 600,000 are aged between 21 and 29.

But while the typical uninsured driver is male, and aged between 17 and 29, a surprising 15% of uninsured drivers fall into the 40-49 age range.

Labelled the "squeezed generation", it's believed that these drivers are feeling the financial pinch particularly badly - due to having to juggle household expenses, raising children and caring for elderly parents - and some clearly choose to forgo car insurance to save money. But is this an acceptable excuse?

Insurance rises

So who pays out when an uninsured driver has an accident? Well the MIB enables compensation to be recovered by victims of uninsured drivers (or drivers who fail to stop), which in 2008 cost them a shocking £380 million. And the total cost of uninsured driving in the UK is estimated at a whopping £500 million.

And while you may think this has nothing to do with you, you may be surprised to learn that the MIB is funded by UK motorists. So every law-abiding driver is currently paying a £30 levy on their car insurance policy to cover these costs. Ouch!

Stay insured

Clearly something needs to be done as not only is driving uninsured unbelievably dangerous, it's costing the responsible drivers money too (which we can ill afford!).

Indeed, according to recent research, uninsured drivers kill three people and injure 460 others each week, with a quarter of these accidents caused by young people.

And with feeble penalties slapped on uninsured drivers when caught (ranging from fines to eight points on their driving licence), the law clearly isn't proving a strong enough deterrent.

Unbelievably, the MIB reckons that one in ten 18-34 year-old drivers claims to be unaware that car insurance is a legal requirement. Really? If this is the case, should insurance not become an integral part of the driving test?

I gave my local driving test centre a ring to find out. They revealed that the legal requirement for drivers to have valid car insurance does come up in the theory test. What's more, all drivers taking their practical test must sign a form stating that the car they will drive is insured. Can young drivers really claim such ignorance?

So what can we do to encourage everyone to stay insured?

Well, we can use a few tricks to make car insurance more affordable. The MIB has the following recommendations:

How to slash the cost of your car insurance

1.      Increase your excess

By increasing your voluntary excess on your insurance policy you can reduce the premium significantly. This will make it more affordable, but be warned, it will increase your costs should you need to claim.

2.     Choose appropriate cover

Match the cover you take to your vehicle. There's little point forking out for expensive comprehensive insurance for a car worth very little. Look into third party, fire and theft cover instead which can be far more affordable.

3.     Advanced driving course

You may not realise this but by taking an advanced driving course and joining the Institute of Advance Motorists (IAM) you can reduce the cost of your insurance premiums significantly. And while the course can cost £150+ the good news is that a number of councils support the scheme and will offer bursaries to cover 50% of the costs!

4.     Pay as you Drive insurance

Finally, if your annual mileage is pretty low, find out if you could save by choosing a Pay As You Drive insurance policy instead.

And for even more tips on how to slash the cost of your car insurance, read 12 tips to drive down your car insurance costs.

So it's clear something needs to be done to enforce the legal requirement of having car insurance - perhaps this could be achieved through more severe penalties for those who are caught. But while insurance can be expensive, hopefully by following some of these tips, you can make it a bit more affordable.

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