Looking For The Cheapest Car Insurance?

You need a very cheap car insurance policy with a choice of paying for it upfront (if you can afford it) or monthly, with a small, or even no, deposit in advance. You go to a price comparison site such as moneysupermarket.com, prudentplus.com, or confused.com, fill in your application, and buy the cheapest policy they have got. You've saved the most money you possibly can, right? Wrong.

What is the cheapest way to buy car insurance?

Most people think that the best way of getting the lowest premiums is to get them from a comparison site. The problem is that the site itself will charge a commission (typically £50) for introducing you to the company you buy your policy from. But there's more. The companies offering quotes are hardly likely to be insurers themselves - odds-on they are insurance brokers which package policies from the actual insurer and sell them on its behalf. These brokers therefore take another commission from the money you hand over. The taxman takes a share right from the top - so you pay tax on all these commissions, too - and the poor underwriter merely gets the crumbs that are left. This is one of the reasons why insurance is expensive - too many fingers in the pie!

There may well be other insurance companies that are willing and able to offer you a far lower premium than the ones that you are shown. The problem is that they are not on the website's approved list; and they are not on that list because they will not pay the owners the commission. There may well therefore be many companies that could offer far cheaper quotations; the problem is you will never hear about them.

How do you find these cheaper companies?

A lot of insurers refuse to put their products on price comparison sites because of the expense. They prefer to market their policies in a different way. Since advertising is very expensive many of them make deals with large groups of people, such as trade unions, car clubs, or other associations that just happen to have something in common. They will offer policies to the members of these groups, often at extremely favourable rates. An example of This Is the National Farmers Union whose members are eligible for some of the best insurance deals in the country. Therefore, if you belong to an association which may have links with insurers it could be well worth your while to find out if they can offer you better prices.

Can brokers find better deals?

Let us not forget your friendly local insurance broker either! Many of them have long-standing arrangements with smaller underwriters who may be able to offer you a better deal; particularly if you are amongst the millions of people who have had previous accidents or convictions. Often a broker can greatly undercut the big websites because of much lower overheads. It's worth a try.

Are all price comparison sites the same?

If you do decide to stick with the price comparison sites, do not fall into the trap of assuming that they all offer the same policies at the same prices. Certainly they will try to confuse the issue by including 'free' extras with their quotes; these may include a courtesy car in the event of an accident, or perhaps legal representation if you have a motoring charge to defend. However they all have different insurers on board, and different financial agreements with them. From time to time they may run special promotions for particular insurers. They may even be partly owned by an insurance company, or even own one themselves so the possibility of bias rears it's head. It is not unusual to find identical policies on different price comparison sites, but offered at widely different prices. You should therefore not use one comparison site but several; it only takes a matter of minutes to get quotes and it could save you a great deal of money.

Can the cost be cut even further?

Finally: there is a little known way to save even more money on your policy. Start your search early. Research proves that those who look for their policies a month before they actually need them get better prices (rumoured to be around £60 on average!) compared to those who shop at the very last minute. Remember the early bird catches the worm!

Follow these tips and although no one can guarantee that you will find the really cheapest possible quote available, but you will have a far better chance than most people!