How to get cheaper car insurance
KNOWLEDGE is power. And the first thing to know about car insurance is that getting it is a negotiation. In any negotiation, access to information is rarely symmetrical. Those with greater knowledge have more power and in this instance it’s impossible to know more than each firm. This is why you need to shop around.
Matt Reid, UK director of the insurer Protectyourbubble.com recommends “always challenging your current insurance provider when your policy is up for renewal. And do this armed with accurate, up-to-date information about what else is out there.” But he warns: “Don’t get blinded by the offer of a low premium. Check the excess, as it’s likely that if the premium seems low, the excess will be higher than other quotes you’ve received.”
Peter Harrison, car insurance expert at MoneySupermarket, says “the high cost of motoring means shopping around for the best value car insurance is crucial to ensure you aren’t paying more than you need to.” Recent research undertaken by Opinium Research on behalf of MoneySupermarket claims that 7.3m drivers – 20 per cent – in Britain automatically renew their car insurance with their existing provider, potentially wasting around £2.9bn.
It need not be this way. Online comparison sites have given consumers more power to drive up the competition. In the first instance MoneySavingExpert.com points consumers in the direction of GoCompare.com, MoneySupermarket.com, TescoCompare.com and Confused.com; but also suggests you check out Aviva and Direct Line.
THE POWER OF TECHNOLOGY
Aggregated quotes are the first step, but telematics is the giant leap. The chief executive of insurethebox, Mike Brockman explains: “It’s a small black box, linked to GPS satellites inserted beneath the dashboard. It monitors how, where, when and how far you drive, enabling insurers to charge by the mile and to reward good driving.”
Ian Faulkner, managing director of Metaskil describes it as a whole new ball game: “Rather than giving me a price based on generalisations – my age, my post-code, my gender (and not even that for much longer) – I can be priced according to how I actually drive.” He says “If I drive well, I get a better deal. And if I know that, I’ll probably drive better.” But the benefits don’t stop there. “If I have an accident my insurer will know and can pro-actively support me – advising the emergency services if required. If I could have caused whiplash – or more importantly not caused whiplash – my insurer will know.”
In April 2012 an estimated 90,000 cars in the UK had telematics-based insurance policies and this number is expected to rise. Of course, if your approach to driving is more carefree than careful, you might be better off trying to slip below the radar. Although this will become increasingly hard if enough safe drivers sign up – leaving you with a more expensive policy simply by virtue of not having a black box.
IN BRIEF
The leading edge
● Vanguard Funds has listed its suite of Irish-domiciled exchange-traded funds (ETFs), with the initial five ETFs admitted to trading on the London Stock Exchange last week.
Sweet home
● 73 per cent of people would still consider using housing equity as part of their later life finances, reveals the Equity Release Council. Of course, this might be driven more by needs than investment planning.
Diversify your portfolio
● A new fund – the IM Oxip Diversified Growth Fund (DGF) – has been launched. Designed for investors, such as DC Schemes, with shorter-term liquidity requirements. Uniquely, the DGF is entirely open architecture – diversified into equities, bonds, hedge funds, commodities, insurance and property.