When you have a car, you need to have car insurance, because it is illegal in the UK to drive a car without insurance. The first thing that comes to your mind while purchasing car insurance is the price. According to the Association of British Insurers (ABI), the average monthly insurance payment is £485 per year, equivalent to £39.25 per month. The ABI collects data from many insurers, but there are conflicting figures and statistics according to studies that say the price of insurance is larger from £692 to £827. The cost of insurance for a car varies with factors like your age, type of car and duration of insurance.
Let’s get a deeper dive into the factors affecting the average monthly cost of car insurance.
Factors Affecting Car Insurance Premiums
It is not possible for you to draw up your own policy and set the price according to your budget. But you can control the factors affecting the cost of car insurance, and in this way, you can reduce the cost.
The Car You Drive
Car Insurance companies ask you to provide some information based on that information, the cost of the insurance policy is decided. It includes several factors but the car you drive plays a vital role in the cost of the insurance policy. The size, model, age and value of your car all affect the price of insurance. This price variation is associated with risk; the more your car has risk exposure, the more will be the price. For example, sports cars have more accidents, and repairing such cars is also expensive. All these things add to the car insurance monthly premium.
Where You Live
The area in which you live also affects the cost of car insurance. If you live in an area where the level of vehicle crime is high, or the chances of accidents are higher, you have to pay a high cost for insurance.
Your Age and Driving Experience
Young drivers are considered to be more involved in accidents. That is why they have experienced the pain of trying to get a reasonable car insurance quote. Monthly car insurance payments are usually high for drivers of age 17 or 18. Similarly, the rates are high for less experienced drivers. The more you have driving experience, the cheaper the insurance quote you can get. It is because experienced drivers have fewer chances of accidents. However, there are some policies like black box insurance that young drivers can take to lower the cost. In black box insurance, a box is attached to the car to track the owner’s driving.
All the cars in the UK have a rating according to the insurance group and underwriters use this rating to calculate the premium of car insurance. There are almost 50 insurance groups present and the lower number groups are being cheaper to insure. The insurance group number is given to the car on the basis of how costly your car is. The insurance company determines the cost of your car by the cost of the vehicle’s parts, its market value and security features. If you want to save money on car insurance you must purchase a car in a low insurance group.
- History Of Claims
Insurance companies also use the data of your previous claims to calculate the premium. Insurance companies have a discount for people who have a no claim bonus. You can build up a no claim bonus based on all the years you have not made a claim. The discount varies from company to company depending on the number of years you have not made a claim. When a driver makes a claim, the insurance premiums go high because the insurers believe there is more chance for them to make subsequent claims. The premium increase depends on various factors such as the amount of damage and who was at fault.
Type Of Coverage
The premium of car insurance varies with the type of coverage. The greater coverage you want more will be the monthly cost of car insurance. There are five types of coverage: liability, personal injury protection, collision, comprehensive, and uninsured motorist. These all make up your insurance policy, and you can cut down some of these if you want to lower the cost of insurance.
Eligibility For Monthly Car Insurance?
The eligibility criteria may vary from insurer to insurer but there are some common things among the eligibility criteria of all car insurers. Many vehicles and drivers are eligible to purchase monthly car insurance. You are allowed to purchase one if you are a UK resident, aged between 18 to 75 years, have a valid UK driving licence, and do not have any fault claim during the last 12 months. Before purchasing monthly insurance for a car you should check the eligibility criteria provided by the insurer. If you meet the eligibility criteria it will become easier for you to get monthly car insurance within a short time.
How Can You Save Money On Car Insurance?
Many drivers think that if they stay loyal to one insurer and auto-renew the policy. But it is not so; if you want to save some money, the first thing you have to do is to not accept your insurer’s renewal quote. Instead, shop around and compare quotes from different providers. While comparing the quotes, consider extras such as legal cover, car cover and windscreen cover are included in a standard policy, or you have to pay extra for them. Paying car insurance in full will be cheaper than the monthly payment. Moreover, you can lower the insurance premium by increasing your car’s security, adding a second driver, keeping a clean licence, and living in a safe area. Car insurers also use your credit score to calculate the car insurance monthly premium so if you want to get cheaper rates you must have a good credit score.
Why Should You Choose Monthly Car Insurance?
Monthly car insurance is a perfect option for car enthusiasts and for new drivers. It offers flexibility as you can purchase insurance for the time you need it the most. The major advantage of short term car insurance is that it provides cost-effective cover for up to 30 days. It is a way that you can avoid purchasing a 12-month insurance policy when you do not need it for that long. You can get many benefits by purchasing monthly car insurance some of which are as follows:
Although you are purchasing car insurance only for a month, it provides you with a comprehensive cover. Monthly car insurance provides you protection similar to annual car insurance.
With this type of insurance, you have the option to choose when your policy starts and ends without being tied to long term contracts.
When you purchase a car insurance policy for a month, you find it cheaper than the annual car insurance policy.
Easy to Get
Most Car insurers are providing their services online. You can get insurance for your car online from anywhere by filling an application form and providing the necessary information.
You can get quick quotes and for getting short term insurance you do not need to wait for months. It takes less approval time and you can start your journey to the road with a comprehensive cover.
When Will You Need Temporary Car Insurance?
Monthly car insurance can be a perfect option for you in many situations especially when you drive a car occasionally. Some most common reasons why drivers choose monthly car insurance are as follows:
- When there is a need to add a second driver temporarily.
- Borrowing a car from a family member or friend for some time.
- Going on a long trip and sharing driving duties.
- When learning to drive with a temporary learner driving licence.
- UK visitors who need to drive a car during their stay.
In all the above situations you do not need to purchase an annual insurance policy. However, if you find that a monthly insurance policy is longer for you, many insurance providers offer you insurance for hours and days too. Some are offering policies in which you can pay car insurance every six months. You can select an insurance policy that meets your requirements.
The price gap between different car insurance companies is enormous, and this price hike is hitting residents of the UK. However, the good thing is that due to increased competition, companies are offering more discounts and deals to attract more customers. Keep in mind that the cheapest is not always the best, so always shop around and find out which insurer can offer you the best policy and price for your specific circumstances. Furthermore, you should remember that there are some situations when monthly car insurance does not cover you such as if there is damage or theft caused by your negligence or damage caused by a driver whose name is not in the policy. If you are driving a car for commercial purposes short term car insurance is not suitable for you. If you want to get temporary car insurance you can visit our comparison page to find out the best vehicle insurance providers in the UK.