How to reduce your car insurance costs

Use our money saving tips to help reduce your premiums and find the right car insurance policy for you.

Owe Carter Personal finance and insurance writer

Last updated 18 May 2026

8 mins read

Looking for car insurance?

In brief

You could reduce your car insurance by comparing quotes from a range of providers. Other things that can help include increasing your voluntary excess, improving your car security and paying annually instead of monthly. Plus adding an experienced named driver could lower the cost - especially if you’re a young driver.

What affects the cost of car insurance?

Insurers calculate your car insurance premium based on risk. The lower the perceived risk, the lower your premium is likely to be.

Broadly speaking, this comes down to three areas:

Driver factors - Your age, occupation and driving history - including claims and convictions in the last five years
Vehicle factors - Your car’s value, engine size, safety features and car insurance group
Usage and location factors - Your annual mileage, where you live, your car’s class of use and where it’s parked overnight

How to get cheaper car insurance

These are the main, proven ways to reduce the cost of your car insurance.

Compare car insurance quotes

Our top tip: One of the most effective ways to save money is to compare quotes from a range of different car insurance providers.

Prices can vary significantly between insurers for the same car and driver. This is why shopping around to find a better deal is absolutely essential.

Increase your voluntary excess

Choosing a higher voluntary excess could reduce your premium. This is because you’re shouldering more of the risk.

Be aware though that it also means you pay more towards a claim if you’re involved in an accident. This is why you should always set the excess at a level you can afford.

Build up your no-claims discount

The longer you go without making a claim, the more no-claims discount (NCD) you build up. Several years of NCD will make a noticeable difference to your premium, as insurers reward claim-free driving.

Improve your car’s security

Adding security features can reduce the risk of theft and potentially lower your car insurance price.

You could consider:

Alarms
Steering locks
Tracking devices
Parking on a driveway or in a garage

It’s a good idea to get car insurance quotes beforehand, to see how much improving your security might save you.

Pay annually instead of monthly

Monthly payments might help spread the cost of your cover, but it will cost you more. Insurers usually charge interest and fees to pay by monthly instalments.

If you can afford the upfront payment, it works out cheaper overall if you pay the annual amount in one lump sum.

Add an experienced named driver

If you add a more experienced driver to your policy as a named driver, it could reduce your premium. This can be particularly handy for younger drivers.

Always be honest about who the main driver is though. Not doing so is a kind of fraud known as fronting, which is illegal.

Quick ways to reduce your car insurance price

Here are a few more tips you could try to see if they reduce the cost of cover:

Update your job title (legally)

The way you describe your job can affect your premium. A 'chef' might pay a different premium to a 'cook,’ for example, or a ‘hairdresser’ might pay a different price to a ‘barber’.

But be honest and choose a title that accurately reflects your work. Otherwise you risk invalidating your policy.

Remove unnecessary add-ons

Don’t choose a more expensive policy with unnecessary optional add-ons. Go for one that has everything you need for a great price.

Think about whether you really need features like:

Limit your annual mileage

Limit the number of miles you drive each year. Fewer miles means you’re a lower risk for insurers, so cheaper to insure.

Although you should always give an accurate estimate of your mileage when getting a quote. Your policy could be invalid if you’re not honest and deliberately underestimate.

Why is my car insurance so expensive?

If your car insurance seems pricey, there could be a few reasons for this:

You have a high-risk driver profile

Some drivers face higher premiums due to insurers considering them higher risk. They include:

Young drivers or newly qualified drivers
Drivers with a history of penalty points or previous claims
People driving high-performance cars

You have an expensive or high-performance car

Insurer data shows that expensive or high-performance cars are more likely to be involved in high-cost collisions. This is why insurers view them as higher risk, and they usually occupy higher car insurance groups.

Generally speaking, these cars:

Are more expensive to repair or replace due to specialist parts
Are more frequently targeted by thieves
Have higher accident rates because of their speed, acceleration and power

You live in a high-risk area

Insurers also factor in where you live. You could pay higher car insurance premiums if you live in areas with:

Higher accident rates
More theft or vandalism claims
Heavy traffic

Factors that don’t usually help lower your car insurance price

On the other hand, here are some things to avoid so you don’t push your prices up needlessly:

Small cosmetic changes

Minor cosmetic modifications tend to increase the price of car insurance, as these will need to be accounted for if the car gets damaged.

Generally speaking, if you modify your car from its factory spec, you can expect your premiums to go up. The main exception is if the modifications are safety or security enhancements.

Loyalty to the same insurer

As much as it would be nice to think that if you stay loyal to your insurer, they’ll reward you for it, this is seldom the case.

Regulations introduced in 2022 banned insurers from charging renewing customers more than new ones. Nonetheless, it’s still unlikely that your renewal price will beat what you get if you shop around. This is why you should never just auto-renew - always compare a range of policies.

Paying for your insurance monthly

If you opt to pay monthly for your car insurance, it helps to spread the cost. Yet it will almost certainly be more expensive in the long run.

This is because the insurance provider is effectively giving you a loan for the year’s premium. This means interest and sometimes other fees are added, meaning you pay more overall.

When is the best time to buy car insurance?

Our data shows that 26 days before your renewal date is the ideal time to buy car insurance, on average.

On the other hand, leaving it until the last minute could lead to higher prices.

It’s also worth updating your insurer if things change, like:

Your job
Your annual mileage
Where your car is kept overnight

It’s best to let your insurer know sooner rather than later if the changes are likely to reduce your premium.

Could you get cheaper car insurance today?

The quickest and easiest way to find cheaper cover is to compare quotes from a range of trusted providers. Why not try it now?

Frequently asked questions

Does my car’s make and model affect my car insurance?

Yes. Car insurers put cars into car insurance groups based on their make and model. The higher the group, the more expensive the insurance will be.

Smaller, cheaper and less powerful cars are in the lower groups so these are usually the cheapest to insure.

Does my age affect my car insurance?

Yes, it can. Insurers price based on risk, and statistically, younger drivers and very elderly drivers are more likely to be involved in accidents than drivers over 50.

It’s more about experience though. So a younger driver with more years’ claim-free driving experience might well get cheaper quotes than an older driver who has just passed their test.

Do new drivers pay more for their car insurance?

Until you’ve built up some driving experience and got a few years’ no-claims under your belt, your insurance will inevitably be expensive. New drivers should always shop around and might want to consider a black box insurance policy to keep costs down.

Are electric cars cheaper to insure?

Electric cars used to be much more expensive to insure due to being high value and unusual.

This is no longer the case. Mass-adoption of EVs has meant that there are now more affordable models available and electric car insurance is now generally similar to the equivalent petrol or diesel model.

What is the easiest way to reduce car insurance?

The quickest and simplest way to save money on car insurance is usually to compare quotes from multiple insurers.

Does my job affect car insurance?

Yes. Insurers use job titles as part of their risk calculations, so your occupation can influence how much you pay.

Does paying annually make insurance cheaper?

Typically, yes. If you pay annually, this avoids the interest and fees usually added to monthly instalments.

Will adding a named driver reduce my insurance?

It certainly could do. This is especially the case if the named driver is older and more experienced. Although it could make your insurance more expensive if, for example, they have claims or convictions in the last five years.