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As the recession continues, motorists are one of the groups hardest hit. The cost of fuel is considerably higher than what it was five years ago, but even more worrying is the escalating cost of car insurance.
The average cost of car insurance across all age groups has rise by £170 in the past 12 months and now stands as high as £857 per year. With this figure in mind, many people might think that purchasing third-party, fire and theft, car insurance is the cheaper option, but actually the cost of fully comprehensive cover still works out cheaper. In fact, third-party insurance has increased on average by 33 per cent in the last year so is best avoided.
Despite the increasing costs, there are a number of ways you can lower the cost of your car insurance cover if you follow some of the Trusted Dealers’ tips below.
Make one lump sum payment
Making a full payment up front will save you cash. Insurers charge interest for the privilege of paying in monthly installments, so if you choose to pay this way it could add as much as £300 to your premium. Taking out a credit card with a 0% interest rate for the duration of your insurance policy would be a better option if you really don’t have the cash to pay upfront, then you can pay off your card in manageable, monthly interest-free installments.
Don’t miscalculate your mileage
Your car insurance premium will be calculated taking into account a number of different factors to include your annual mileage estimate therefore it pays to spend time trying to get this estimation as accurate as you possibly can. However, be warned that underestimating your mileage can invalidate your insurance policy when it comes to making a claim.
Value your car accurately
Make sure that you provide an entirely accurate valuation of your car. Many motorists assume that if they value their car highly then they will receive a higher pay out from their insurance company in the event of a claim, but this is not true. Your insurance company will only pay out the current market value for any vehicle, so inflating the value of your car will serve no purpose other than to increase your car insurance premium.
Pay a higher excess
You can cut the annual cost of your car insurance premium by opting to pay a higher voluntary excess. This is the amount you choose to pay in the event of a claim, and if you opt for a higher excess, the chances are your insurer will lower the cost of the premium. It pays to remember that any voluntary excess you agree to pay in the event of an incident will be in addition to the compulsory excess stipulated by the insurance company, so make sure you check this out first and only opt for a voluntary sum that you can realistically afford.