CarsMotor Insurance

Pros And Cons Of Cheap Car Insurance

Right side of grey car on road

The cost of living especially petrol and diesel is causing many to look at their budget and see where they can make savings.

If you are still having to commute to work, then on top of fuel for your car, MOT and road tax, you also need to consider car insurance.

Although there are a few things to consider when shopping for the cheapest car insurance. The most critical factor is typically the price. However, it’s also essential to consider the coverage you’ll get for that price. I know it may sound counterproductive when you are trying to save money, but in some cases, it may be worth paying a little extra for better coverage, as you can then save money in the long run.

Here are a few pros and cons of cheap car insurance to help you make an informed decision:

PROS

– You’ll save money on your premium.

– You may be able to find a policy with more comprehensive coverage than you currently have.

CONS

– The cheapest policies may have lower coverage limits, which could leave you financially vulnerable if you’re in an accident.

– Some insurers may not offer discounts or rewards programs that can save you money in the long run.

Tips to Reduce Insurance Costs

No matter what company you choose to take out your insurance with, there are a few tips that can help you reduce the amount you pay. With rising inflation, it makes sense to cut costs where you can.

Credit Score

Most people know that their credit score can affect their ability to get a loan or a credit card. But did you know that paying monthly for your car insurance shows up on your credit report.

So, if you are looking to improve your credit score it may be best to pay yearly rather than monthly. Although by paying your monthly instalments on time, after the year it will eventually show as a positive on your credit report. Always keep an eye on your credit report, as mistakes can be costly, but can be looked into and often corrected. To increase your credit score join the electoral register and take out as little credit as possible, especially if you are looking to get a good mortgage rate in the near further. And most importantly near skip or be late with a payment.

Bundle Your Policies Together

Insurance companies usually offer discounts if you bundle your auto and home insurance policies. They want to encourage customers to do business with them for multiple products. You could save a significant amount on your premiums by taking advantage of such a discount.

Lower Your Deductible

If you’re looking for ways to lower your car insurance rates, one option is to increase your excess. This means you’ll pay more out of pocket if you’re in an accident, but it can also lead to significant savings on your premiums.

For example, if you have a £500 deductible and increase it to £1,000, you could save 10% or more on your premium. Of course, you’ll need to ensure that you have enough saved up to cover the increased deductible in an accident.

But if you’re a safe driver and you’re not worried about having to pay a higher deductible, increasing your deductible is a great way to save on your car insurance.

Drive Less – Take Alternative Transportation

Many believe the only way to save money on car insurance is to find the cheapest company. However, several other factors can affect your premium. One of these is how much you drive. If you live close to work or can take public transportation, you may be able to get a low-mileage discount from your insurer.

This could lead to significant savings on your premium. Of course, you’ll need to weigh the cost of gas and public transportation against the savings on your premium. But it may be worth considering if you don’t drive very often.

Keep Your Car in Good Operating Condition

Another factor that can affect your car insurance rates is the age of your vehicle. If you have an older car, it may not have all the safety features of a newer model. This could make you a higher insurance risk and lead to a higher premium.

On the other hand, if you have a car that is seen as a responsible vehicle, for example a Volvo estate car, rather than a BMW sports car, then even if your car is older you may still get a lower premium, because insurance companies will see you as less of a risk and less chance of being in an accident. If you want to save money on your car insurance, go for a car with less power and a car that is not associated with boy racers.

Conclusion

At the end of the day, and after comparing the same coverage, finding an insurance policy that meets your needs and budget is essential. Don’t sacrifice coverage for a lower price if it means you could be left without adequate protection. And compare prices and policies before making a final decision. Cheap car insurance is out there – you just have to know where to look!

About author

Poppy loves personal finance almost as much as she loves her two cats, Tif and Taz.
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