Richard Tutt, Chairman of vehicle crash repair network, Motofix Group, highlights how UK motorists are trying to save money on their motor insurance.
Car insurance costs are climbing as inflation, more costly repairs, and a greater proliferation of injury claims add to the price of new policies or renewals. And with UK motorists feeling the financial pinch generally, many are seeking a softer insurance landing by increasing their excess.
On the face of it, bumping up an excess is a clever strategy. The maths is simple: if you set a higher excess, you pay a lower premium. But there are pitfalls motorists should be aware of if they choose to take this route. In our opinion, the objective should always be to keep insurance affordable – but without piling on unnecessary risk.
Another common tactic to save money is based around protecting a no-claims bonus. Many drivers skip claiming on smaller repairs, opting to pay out of their own pocket instead. But what they don’t realise is that if they fail to report an incident, it could invalidate their insurance. Avoiding smaller claims can prove very costly if a driver ever needs to make a big claim down the line.
With comprehensive motor insurance policies edging towards £500 a year, it’s understandable drivers want to reduce their yearly costs. Our industry is noticing a trend towards motorists raising their voluntary excess to knock a chunk off their premium. It’s not uncommon for some excesses to jump from a ‘traditional’ sum of £250 to £500 or even £1,000.
But here’s the rub: if a driver sets an excess that’s so high, claiming for smaller repairs becomes totally pointless. And if a big expense does present itself, they’re hit with a hefty bill before their insurer even starts to process their claim. Not only that, delaying or avoiding repairs to save money can cause vehicle safety issues.
A smarter route to cut costs
Rather than bowing to the strong temptation to automatically up an excess, there are various steps motorists can take to try and reduce the size of their annual insurance bill. The advice that we would offer includes:
● Black box policies
A telematics (or black box) insurance policy tracks driving habits by recording things like speed and braking habits. If the data deems a driver is safe, the policy will reward them with a lower premium. A telematics policy is especially helpful for young drivers that want to show they are a low-risk customer.
● Shop around
We would never advise to let a policy automatically ‘renew’ without testing the market. Insurers often offer better rates to new customers, so the tactic should be to see what’s on offer elsewhere before signing up again.
● Boost vehicle security
Installing an alarm, immobiliser or tracker makes a car less appealing to potential thieves, and there are discounts to be had from insurers if a motorist places a strong emphasis on additional security protection.
● Pay-as-you-go insurance
If a motorist doesn’t get behind the wheel very often, paying for their insurance coverage per mile often makes good financial sense. After all, why pay for insurance coverage that isn’t being used?
● Drive a smaller car
The type of car a motorist takes onto the road will affect their insurance premium significantly. Smaller engines, good safety ratings (the Euro NCAP star rating system is the industry benchmark), and lower values usually bring cheaper premiums.
● Add an experienced driver
Adding a more experienced driver, like a parent or partner, can reduce a premium cost. But it’s vital drivers don’t ‘front’ (listing someone as the main driver when they’re not) that experienced driver, because that’s illegal and could result in the policy being cancelled altogether.
● Pay ahead
Monthly payments are smaller and seem easier, but insurers usually tack on extra charges for that model. We would always advise motorists to pay annually for a much better deal.
● Keep a clean record
Avoiding accidents and staying ticket-free is a sure-fire way to save on insurance costs. The longer motorists can stay claim-free, the bigger their no-claims discount becomes.
Giving a helping hand
If motorists do saddle themselves with a high excess, upfront repair costs can be very painful. At Motofix, we’re keen to help our customers overcome this challenge. That’s why we offer Payment Assist. It’s a payment plan that spreads the cost of the motorist’s excess – or even the entire repair bill – so they don’t have to pay for everything in one go.
Customer feedback tells us Payment Assist is a big help to customers that are facing a big repair but want to avoid a hefty upfront bill.
Think about the bigger picture
Raising an excess might look like a quick way to save, but it’s a strategy that can bite back if a motorist ever needs to claim. Thankfully, there are plenty of ways to keep insurance affordable without piling on risk. And if a driver does have a high excess, something like Payment Assist can soften the blow.
As a vehicle crash repair specialist that completes tens of thousands of repairs every year and looks after customers with various types of insurance cover, our advice to motorists is simple when it comes to saving money: research and embrace cost-saving opportunities – but never pile on unnecessary risk and lose the cover that’s needed.
Be the first to comment