27 April 2011 by Parkers Team

  • Price of insurance premiums continue to rise
  • Parkers tips to cut down on increasing costs
  • Five left-field ideas that could save you £££s

Latest reports show that insurance premiums have risen by an massive 40% over the past 12 months which means it's more important than ever to try to find ways of cutting your annual insurance bill.

Of course the standard response is simply to shop around to find the best deal but, once you have used websites such as Parkers Compare to compare car insurance, phoned up insurance agents, or browsed the web and magazine advertisements to get the best quote, there may still be more you can do to keep your premium to an absolute minimum.

Here are our five top alternative insurance-saving tips: 

1. Consider taking out classic car insurance

You might be running around in a 1980s VW Golf, or even a 1990s Mazda MX-5, covered by straightforward car insurance when in in fact these types of car can qualify for classic car insurance, which is much cheaper. Usually these policies work on a two-car basis, i.e that this car is your 'second' car and you do limited mileage but you may well be able to take a policy out on this basis, or find someone who will cover one car, and get a really affordable premium. At Parkers a few of our journalists run older cars but not what might be considered classics. For example, a 45-year-old policy holder pays a little more than £140 for full year's comprehensive insurance for his 1985 2.8-litre Mercedes-Benz SL. Yes, there is an annual restriction 5,000 miles but if you live in the city and do not have a large daily commute that kind of strategy could well work for you.

2. Consider all-in lease deals

Peugeot is leading the way with its Just Add Fuel lease deals. This particular scheme does what it says on the tin: you simply pay a monthly sum to lease a car and everything else is thrown in: servicing, road tax, maintenance, breakdown cover as well as insurance. With this particular scheme you have to be over 25, but it can make real financial sense, particularly if you have not accrued any no claims bonus.

3. Join a pay-per-use car club

Street Car is the most well-known of the new stream of car clubs that give you access to a car without all the hassle of ownership. This means you won't face costly bills and you'll only need to use a car when you absolutely need it. You'll need to do your sums but this method could work out a lot cheaper than the traditional ad-hoc way of renting a car. Read our special car club report to find out more.

4. Think about your circumstances

Consider how best to describe your current work situation and find out which job description will lead to a cheaper premium. This isn't lying, it's playing the game. This trick is about finding a better way to describe your job. Putting electrician if you work in a supermarket is illegal and will invalidate your insurance but we found that using the word 'reporter' means a cheaper premium than if the policy holder is described as a journalist.

Also consider how you can save on insurance by doing things that are obvious: do you have a garage, and do you actually use it? If you don't and are currently parking your car on the street, clear it out of all the junk and use it for what it was designed for... a place in which to park your car.

Also, you might want to consider taking an advanced driving course, or even fitting a proper Thatcham-approved alarm on your car?

Do you have needless modifications that bump up the premium? Refit those standard wheels and sell those alloys on eBay. Detune your modified motor too. Sure, it won't go so fast but it'll save you cash in the long run.

And how about fitting a tracker on your car? It might cost a bit, and you'll need to find out how much your company will lop off the premium if you this to find out if it'll pay long-term, but it's worth considering

5. Timing is everything

We have covered the importance of shopping around, but not about the best time to shop around. Timing is everything when you are arranging cover because insurance companies are often prepared to come down in price to get your business. The best time to call is in the evening and at the end of the month because companies have targets to meet and they are often under pressure to secure business when things are looking a little tight. They may have their guidelines but if business isn't looking too rosy when the month is coming to a close, they might be prepared to do a one-off deal for you.

Parkers Top Tip

Don't forget to use Parkers Compare to check to see if you're getting the best deal available, or read our insurance advice section for more tips and guidance about car insurance and insurance groups.