By Charlie Brown

If you choose to reside in most parts of Asia, it’s very cheap to run a car. If, however, you live in the

car_insuranceUK, you’re not in luck – it’s a very costly business to keep your car on the road.

You’ve got tax to consider, sky high prices of petrol, albeit diesel is a little more affordable. And, of course, maintenance, with its very high parts and labour costs. Then, on top of all of this, you’ve got the cost of insurance.

Nevertheless, there is a glimmer of good news. The car insurance industry has seen continually rising prices over the previous few years. No, this is not the good news. But this is – this past year or so, the cost of car insurance has been dropping.

All the same, the price falls have not yet made up for all the steep hikes. So, make no mistake about it, the cost of insuring your car is still going to eat away a sizeable chunk of your budget.

Understanding a bit about the car insurance market, together with the different policies that are available, will help you to get the cheapest car insurance which is available to you.

Legal Requirement

Driving without car insurance will come with the risk of a hefty fine and a possibility of having your car seized and, well, dumped – destroyed – toasted. We did warn you.

The government introduced the Continuous Insurance Enforcement, or CIE, back in 2011 in an effort to crack down on uninsured vehicles on our roads. So, if you have a car, it must be insured, unless it has been declared with a Statutory off Road Notice (SORN) as being off the road.

Fraudulent Claims

Those who drive with no car insurance push the price of insurance upwards for everyone else. Officially, at least last year, that amounted to an extra £380 million, or an extra £30 on top of your premium.

So, if you know someone who’s flouting the law in this way, feel free to “grass them off” since they’re costing you money.

But there’s also the matter of fraudulent claims. Fraudulent claims push up the price of everyone else’s premium by a sky high £50 extra. Apparently it’s mostly down to fraudulent whiplash claims.

So there’s 80 quid flushed down the drain for nothing! Doesn’t it just make you mad?

The NHS also claims treatment costs from insurers through motorists. Again – higher premium for everyone else.

Risk Factors

The more risks you take, the more expensive your cover will be, in a round-about fashion. There are a number of factors taken into account in deciding a quote for a premium.

And, sadly, for the youngsters among us, age is one of the main indications of risk. What this means is that older motorists have less accidents.

And what this means is that younger motorists have to pay higher premiums – significantly higher!

But don’t be fretting about it if you are still young, free, and single. Or even if you’re just young. After all, time flies by when you’re having fun!

Men in general are also considered higher risk since they tend to make more costly insurance claims than their female counterparts. Interestingly, but not surprisingly, women drivers make around the same amount of claims as us guys. However, their claims are generally for low impact incidents because they tend to drive slower than the guys.

Well, who would have guessed it?

Certain occupations, some postcodes, too, are “riskier” than other ones. The type of car you prefer to drive.

There are, apparently, 50 different insurance groups that insurers use to categorise a vehicle. Vehicles that slot into the highest groups get the prize of seeing their owners pay the highest premiums.

Car insurance groups are dependent on various factors. Among them are:

  • Driver’s age
  • Driver’s gender
  • Driver’s vocation
  • Price of automobile
  • Performance of automobile
  • Cost of parts of automobile
  • Typical frequency of repair of said auto

As expected, those who go in for high performance vehicles pay a far higher premium than those who opt for a family runabout job.

Monthly Car Insurance Installments

A standard car insurance policy will run for 12 months. Pay your annual premium up front and it’s cheaper than paying in installments. Monthly installments attract a charge for interest, so pay the cost up front whenever possible.

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