Car Insurance Guide

Don't get caught out with sky-high premiums. Understand how insurance works and how to make sure your dream car doesn't cost you more than expected.

💡 Quick Guide: Always check insurance costs before buying a car. Some vehicles can have unexpectedly high premiums, especially for younger drivers.

Types of Car Insurance

Third Party Only – Basic legal minimum. Covers damage to other people's property and injury to others, but not your own car.
Third Party, Fire & Theft – Adds protection if your car is stolen or damaged by fire.
Fully Comprehensive – Covers your own vehicle as well, even if you're at fault. Usually includes windscreen cover and personal belongings.

⚠️ Watch Out: Don't assume Third Party Only will be the cheapest option. Insurers often offer better rates on Comprehensive cover as it attracts more careful drivers.

What Affects Insurance Costs

Car type and performance – Insurance groups range from 1 (cheapest) to 50 (most expensive). Check a car's insurance group before buying with our budget planning guide.
Driver age, location, and history – Young drivers and those in high-crime areas pay more.
Annual mileage – Higher mileage means more risk and higher premiums.
Where the car is kept – Garage parking is safer than street parking.
No Claims Discount – Build up years without claims for significant discounts.
Occupation – Some jobs are considered higher risk than others.
Modifications – Performance upgrades typically increase premiums.

Tips to Reduce Your Premium

Limit annual mileage – Only declare what you'll actually drive.
Park securely – Use a garage or driveway if possible.
Increase your voluntary excess – But make sure you can afford it if you claim.
Compare providers annually – Loyalty rarely pays in insurance.
Consider black box insurance – Telematics can reduce costs for safe drivers.
Add an experienced named driver – But never "front" (falsely list them as main driver).
Pay annually – Monthly payments include interest charges.

💡 Tip: Use comparison sites but also check direct insurers like Direct Line and Aviva who don't appear on comparison sites. They sometimes offer better deals.

Common Insurance Terms Explained

Excess – The amount you pay towards a claim (compulsory + voluntary).
No Claims Discount (NCD) – Discount earned for claim-free years.
NCD Protection – Allows claims without losing your discount (for a fee).
Telematics/Black Box – Monitors driving habits to adjust premiums.
Named Drivers – Additional people insured to drive your car.
Fully Comp on Other Cars – Coverage when driving someone else's car (not standard on all policies).

Check Insurance Costs Before Buying

Always get insurance quotes before buying a car. Some vehicles can have unexpectedly high premiums, especially for younger drivers or those with limited experience.

Use comparison sites to check costs, but also try direct insurers like Direct Line and Aviva who don't appear on comparison sites.

What Next?

Now that you understand insurance, learn how to thoroughly check a car before buying:

👉 Pre-Purchase Inspection Guide