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Advice column: How to lower your car insurance premium

Price discrepancies across the Irish car insurance market are as wide as ever, writes Jonathan Hehir.

Jonathan Hehir City Financial Marketing Group

THE MOST RECENT Consumer Price Index indicates a decrease in motor insurance premiums of 13.8% between April 2017 and April 2018, but these reductions pale in comparison to a 70% skyrocketing of prices in premiums over the previous three years from September 2013 to September 2016.

In short, insurers are still hitting consumer pockets hard.

Price discrepancies

Price discrepancies across the Irish car insurance market are as wide as ever. Many motorists don’t realise that certain insurers directly target a niche in the market and if you fall outside that remit then you may find yourself paying over the odds if you choose that particular provider.

Some insurers charge a multiple of others for the same level of cover. I had a case recently where a person was quoted €1098.00 for a policy – we were able to find a policy with the same cover from a difference insurer for €363.00 – that’s a saving of €735.00.

So, it’s vital for consumers to shop around, and consider some valuable advice when taking out a new insurance policy. This is true for whether you’re a young or first-time driver, or an experienced driver who is renewing a policy.

Factors

Apart from industry dynamics, factors that will always affect your premium are the number of claim-free years driving experience you have, the number of years a full/learner licence has been held, your age, and the age and class of your vehicle.

If you are a young driver – or the parent of a young driver then you will know that insurers are still looking for big money for these policies. On top of this we have found that a surprising number of people are unaware of the extent to which lessons and experience can reduce their premium.

I believe if people knew how much such measures could help towards reducing their costs, they might be a bit more proactive in applying for their test. Moving from a provisional to a full license alone can reduce premiums by anywhere from 30 – 80%.

First-time drivers

One of the most limiting factors for young and first-time drivers is that they don’t have access to a no claims bonus or driving experience discounts, and so invariably pay more than experienced drivers.

Also, there is limited competition in the first-time market – a driver with a full no claims bonus could have 15+ insurers looking to quote for their business, whereas a first-time driver might only have five insurers looking to quote.

While going direct for a motor insurance policy is favoured by some, it’s often not advised for less experienced drivers as the number of insurers wanting to insure this group is greatly reduced. It’s important to get experts to scour the market for the best deal.

My best advice for young drivers in lower their premiums is:

  1. Get lessons – discounts will be offered by certain insurers for drivers who have completed 10 lessons from a qualified driver instructor.
  2. If possible plan ahead – try get some driving experience by being added to a parent’s policy for a period to help pass the driving test. While traditionally most insurers will insist on a full year, some providers offer discounts to young drivers who have six months’ experience on their parent’s policy.
  3. Make sure you select the right insurers – while there aren’t many, some insurers actually want young drivers as policy holders and in certain cases these policies are only accessible through a broker. Do your homework and find out which ones will reward you rather than penalise you for embarking on your new journey as a motorist.
  4. Parents – if you want to teach your teenager to drive, cost out all the various alternatives such as, adding them to your or your spouse’s cover or arranging separate cover for them.
  5. Parents – be mindful – the practice of “fronting” is a definite no-go when it comes to insurance. This is where a parent takes out a policy on their son or daughter’s car and adds them as a name driver. They do this because it’s cheaper to do so but it’s also against the t&cs of the policy and insurers are clamping down & will not honour these policies in the event of a claim.

The following measures are applicable to all drivers looking to reduce their motor insurance bill:

  • Only pay for the cover you require – if your car is a banger, there’s little point in having comprehensive cover. Check the differences between third party fire and theft and comprehensive, as it might not be financially sound to pay the difference depending on the car’s value.
  • Security features all add up – additional security features can make a difference so make sure you tell your broker if you have an alarm, immobiliser or if your car is kept in a garage.
  • If you have more than one policy with the same company then they might give you a discount
  • Consider engine size when buying a car – this will invariably affect your insurance premiums.
  • Try adding a driver to your policy – in a lot of cases the spouse/partner rate is lower than for the insured only.
  • If there are two or more cars in the family try to get them both with the same insurer, as some insurers are now giving significant second car discounts.

Jonathan Hehir is the Founder & Managing Director of the City Financial Marketing Group (CFMG) – the Dublin-based company behind a variety of online insurance brands including, www.insuremyhouse.iewww.insuremyvan.iewww.insuremyholiday.iewww.coverinaclick.iewww.insuremyshop.iewww.insuremycars.ie.

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About the author:

Jonathan Hehir  / City Financial Marketing Group

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