So, you’ve passed your test and are ready to invest in your first car. Follow this guide to finding the right car insurance to ensure you and your vehicle are fully protected at the best price.
Explore the types of car insurance
Car insurance is a legal requirement for driving a vehicle on UK roads. The specifics will depend on the type of cover you have, but typically car insurance provides financial protection in the event of damage to your vehicle or damage to other vehicles caused by you.
There are three main types of car insurance available:
- Third party – the legal minimum which covers you for damage or harm caused while driving for which you’re liable. This includes injury to others and accidental damage to infrastructure such as lampposts and walls.
- Third party fire and theft – the next level up also provides protection should your vehicle be stolen or set alight.
- Comprehensive – the widest coverage, this encompasses damages to your vehicle as well and sometimes gives you third party protection when driving other cars.
Understand cost calculations
There is no set price for car insurance like there is for tax. Different insurers offer packages at different prices, with various factors affecting how the cost of your premiums is calculated.
Key factors include:
- Age – adults younger than 25 and older than 75 face higher premiums as they are deemed less safe on the road.
- Gender – some insurers provided favourable rates for women as they’re thought to drive more carefully overall.
- Driving history – demonstrating years of driving experience will help lower the cost.
- Driving record – any previous accidents or fines for unsafe behaviour could raise the cost of your insurance premium.
- Vehicle – the age and value of your vehicle can also impact the prices quoted.
New drivers are often hit with the highest rates but there are still opportunities to organise cost-effective comprehensive car insurance such as agreeing to pay annually, choosing policies with a higher excess and being a named driver on other vehicles to build up your no-claims bonus.
Consider your coverage needs
Some insurers have different levels of comprehensive coverage with various added extras – just to confuse the matter further! While some of these might be useful to you, some will be surplus to requirements, so consider your coverage needs before saying yes to – and paying for – everything.
Examples include breakdown cover, which you might have organised separately, motor legal protection and courtesy cars.
You should also consider the value of your vehicle. For older cars which aren’t worth much anymore, you don’t need to be too concerned with getting your money back if they’re written off. However, brand-new cars could be best protected with Gap insurance which will pay out the value of a vehicle if it’s totalled – minus any outstanding financing costs.