How to get cheaper car insurance

Published 2 June 2026

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When it comes to insuring your car, every saving counts. The good news is there are some fairly simple steps you can take to shave precious pounds off your premium.

Car insurance prices can vary significantly between insurers and different factors will affect what you pay. From your driving history to the type of car you drive, understanding what influences your premium is the first step to finding a better deal.

Here are our top tips...

What factors affect car insurance cost in the UK?

Before you start looking at ways to save, it helps to understand why premiums vary so much from driver to driver. The truth is, car insurance pricing is personal. No two policies are the same because no two drivers are the same.

Insurers look at a whole range of factors to calculate your premium. Some you can control, others you can't. But knowing what matters most can help you make smarter choices when it comes time to renew or switch.

Your age, experience and driving history

Your age plays a big part in what you'll pay. Younger drivers, especially those in their first year of driving, typically face higher premiums. That's because statistically, they're more likely to be involved in a car accident.

As you gain more experience, your premiums usually come down. Drivers in their 50s and 60s often enjoy the lowest rates, assuming they've built up a solid no claim discount and have a clean driving history.

But it's not just about age. Your driving record matters too. Penalty points, claims history, and even the number of years you've held your licence all feed into the calculation. If you've made claims recently or have convictions on your record, expect to pay more.

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Your vehicle and where you live

The car you drive has a huge impact on cost. Every vehicle falls into one of 50 car insurance groups, based on factors like repair costs, performance, and theft risk. Cars in lower groups are cheaper to insure. High-performance models or those with expensive parts sit in higher groups and cost more.

Your postcode also matters. Insurers use it to assess local risk, things like theft rates, vandalism, and accident frequency. If you live in a busy city centre, you'll likely pay more than someone in a quieter rural area. Even the value of cars in your neighbourhood can push up claims costs and, in turn, your premium.

Where you park your car makes a difference too. A car kept in a locked garage or on a driveway is seen as lower risk than one left on the street overnight.

Is car insurance getting cheaper?

Here's a quick look at what pushes your premium up or down:

Swipe to view more

Factor	Increases Premium	Decreases Premium
Age	Under 25 or over 70	50s to 60s
Driving history	Claims, penalty points	Clean record, no claim discount
Car insurance group	Groups 40–50	Groups 1–20
Postcode	Urban, high crime areas	Rural, low crime areas
Parking	On street	Garage or driveway
Mileage	High annual mileage	Low annual mileage

Understanding how car insurance premiums are calculated can help you see where you might be able to make changes. Even small adjustments, like improving your car's security or reducing your mileage, can make a real difference when renewal time comes around.

Increase your voluntary excess

Your voluntary excess is the amount you agree to pay towards the total cost of a claim, on top of any compulsory excess set by your insurer. Understanding how these two work together can help you make smarter decisions about your insurance policy.

Let's break it down. Your compulsory excess is fixed by the insurer based on factors like your age, driving history and the type of car you drive. You can't change this amount. Your voluntary excess, on the other hand, is entirely up to you. You choose how much extra you're willing to pay if you need to claim, and this choice directly affects the value of your premium.

Here's the thing – increasing your voluntary excess can reduce the cost of your insurance. That's because you're taking on more of the financial risk yourself, which lowers the insurer's exposure. For example, if you increase your voluntary excess from £100 to £500, you may see a noticeable reduction in your annual premium. The higher the voluntary excess you choose, the lower your premium will usually be.

But before you set your voluntary excess too high, think about whether you could actually afford to pay it if you needed to claim. Say your compulsory excess is £250 and you choose a voluntary excess of £500. That means you'd need to pay £750 in total before your insurer covers the rest. If that amount would be a stretch, it's worth choosing a lower voluntary excess instead.

In practice, finding the right balance is key. A higher voluntary excess can save you money upfront on your premium, but it also means a bigger bill if something goes wrong. So, choose an amount that fits comfortably within your budget – one that won't leave you struggling if you need to make a claim.

Keep your annual mileage low

Even if you're a great driver (and we're sure you are), the more you drive, the higher the chance you'll be involved in an accident.

So, if you're able to trim the number of miles you clock up each year, you could make some savings on the cost of your insurance too. As a road user, accurately reporting your mileage is essential. Your insurer will use this information to calculate your premium, and getting it wrong could invalidate your policy if you need to make a claim.

How to check your mileage

The easiest way to find your accurate annual mileage is to check your MOT certificate. It shows your mileage from the previous year, giving you a solid baseline to work from. You can access your MOT history online to see how many miles you've been covering year on year.

If you're estimating for the year ahead, track your driving for a typical week and multiply by 52. Don't forget to add in longer journeys like holidays, visiting family or one-off trips – people often underestimate their annual mileage because they only think about their daily commute.

What counts as low or high mileage?

The average car in the UK drives around 7,100 miles per year. If you're doing significantly less than this, you could be considered a low-mileage driver. On the other hand, if you're clocking up more than 12,000 miles a year, you're likely to see car insurance prices increase because you're on the road more often.

It's worth being honest when you estimate your mileage. Underestimating to get a cheaper quote might seem tempting, but if your insurer checks your MOT records or service history and finds a discrepancy, they could refuse to pay out on a claim. It's better to slightly overestimate than risk being underinsured.

Simple ways to reduce your mileage

If you're looking to bring your annual mileage down, there are some practical steps you can take. Working from home even a couple of days a week can make a real difference. Car-pooling with colleagues or neighbours is another option – you'll split the driving, cut your mileage and save on fuel too.

Using public transport for your commute, even just once or twice a week, can reduce your overall mileage throughout the year. Plus, you'll be doing your bit for the environment. Bonus.

Choose your vehicle wisely

The type of vehicle you're insuring will make a big difference to how much you'll pay for your insurance. Some cars are more expensive to replace or repair than others, while certain models are viewed as higher risk because they're more frequently involved in claims. Every insurer groups car models into categories based on their respective risk, using the Vehicle Risk Rating (VRR).

What is the Vehicle Risk Rating?

The introduction of the Vehicle Risk Rating (VRR) scheme has replaced the traditional insurance group ratings for new cars. This approach applies to vehicles registered from 1 August 2024 onwards.

The VRR was developed by Thatcham Research and assesses vehicles across five critical risk categories, using a scale of 1 to 99.

What are the VRR risk categories?

Performance: Assesses vehicle characteristics such as speed, acceleration, and the influence of modern powertrains.
Damageability: Evaluates how design, materials, and construction affect repair costs and the severity of damage.
Repairability: Focuses on the ease and cost of repairs, promoting repair-friendly vehicle designs.
Safety: Analyses active and passive safety systems, including crash avoidance technologies.
Security: Examines both physical and digital security measures, leveraging Thatcham Research’s expertise in New Vehicle Security Assessment.

Each category is scored individually, providing a comprehensive risk profile for every vehicle.

Unlike the previous Group Rating System, where a vehicle’s rating was determined solely at its launch, the VRR introduces a dynamic scoring model. So, a vehicle’s risk rating can now evolve over time, reflecting changes in its risk profile and potentially impacting insurance costs.

Remember, making modifications to your car can also push up the price of your premium. A modification is any change that alters your vehicle from the manufacturer's standard specifications and these are usually either performance-related or cosmetic.

Changing the engine's performance can increase the speed of a vehicle, while adding new alloy wheels could make it more attractive to thieves. Both are likely to push up your car insurance prices. On the other hand, improving your car's security could reduce your premium. Fitting approved security devices like immobilisers or tracking systems can actually improve your car's insurance group rating and lower your costs.

Select the right occupation

You don't need to go back to school and start a new path as a NASA rocket scientist, but the type of work you do and the industry you work in could make a real difference to the price of your car insurance.

Here's why it matters. Insurers use your job title to assess risk based on years of claims data. They look at which occupations tend to drive more, when they're on the road, and how often they make claims. So, a journalist might pay more than an office administrator, even if they're both careful drivers, because the data shows journalists typically drive more miles and are often in a rush.

So, when you're filling in your quote form, take a moment to think about which job title on the insurer's list best describes what you actually do. If several options fit, it's worth checking quotes for each one to find the cheapest quote. Just make sure whichever you choose genuinely reflects your role.

What you absolutely can't do is lie. Putting down an inaccurate occupation to get a lower premium is fraud. If you make a claim and your insurer discovers you've misrepresented your job, your policy could be invalid and your claim rejected. You'd be left covering the costs yourself – and potentially facing legal trouble.

Always read the small print and check the terms when selecting your occupation. If you're unsure which job title to use, contact your insurer before you buy. They can confirm whether your chosen description is acceptable. And remember, if you change jobs, you'll need to let your insurer know, as this could affect your premium.

Build up your no claim discount

One of the most effective ways to reduce your car insurance costs over time is to build up a strong no claim discount. It rewards you for safe driving and can lead to significant savings on your premium.

What is a no claim discount

A no claim discount (sometimes called a no-claims bonus) is a discount your insurer gives you for every year you drive without making a claim. Each claim-free year adds to your discount, and the longer you go without claiming, the bigger your discount becomes.

In your first year of insurance, you won't have a no claim discount yet. But if you complete that year without making a claim, you'll earn one year of no claim discount. Most insurance companies reward you with around 20-30% off your premium after the first claim-free year, and this can build up to around 60% or more after five years or so.

The way it works is straightforward. Your insurer tracks your claims history, and as long as you don't make any at-fault claims, your discount grows year on year. Most insurers cap the maximum discount at somewhere between five and nine years, but even reaching that cap can save you hundreds of pounds annually.

If you do need to make a claim, your discount may be reduced depending on your insurer's rules. For example, if you've built up six years of no claim discount and then make an at-fault claim, your discount might drop back to the equivalent of three years.

It's worth noting that certain types of claims won't affect your discount at all, such as windscreen repairs, vandalism or non-fault accidents where your insurance company can recover the costs from the other party.

Should you protect your no claim discount?

Once you've built up a decent no claim discount, you might be offered the option to protect it. This is an optional add-on that costs a bit extra on your premium, but it stops your discount from dropping if you need to make a claim.

Protection typically allows you to make one or two claims within a set period without losing your discount. The exact rules vary between insurers, so it's worth checking the details. Some policies might let you make two claims over three years, while others may be stricter.

Here's the thing though – protecting your no claim discount doesn't stop your premium from rising after a claim. Even with protection in place, your overall premium can still increase at renewal because you're now seen as a higher risk. What the protection does is keep your discount percentage intact, so the rise is cushioned a bit.

Whether it's worth paying for depends on how much you've built up and how much you'd lose without it. If you've got four or more years of no claim discount, the protection could be valuable because you've got more to lose. But if you're a confident driver who rarely claims, you might prefer to skip the extra cost and take the risk.

Choose the right level of cover

When you're shopping for car insurance, picking the right level of cover is about more than just ticking a box. You need protection that actually fits your needs, without paying for optional extras you won't use or leaving yourself exposed when things go wrong.

There are three main types of car insurance policy in the UK, each offering different levels of protection.

Third party only

This is the minimum legal requirement to drive on UK roads. Third party cover protects other people if you're involved in an accident – covering damage to their vehicle, property, or any injury compensation costs.

But here's what it doesn't cover: any damage to your own car. If you're in an accident, even if it's not your fault, you'll need to pay for repairs yourself unless you can claim from the other driver's insurance.

Third party only used to be the cheapest option, but that's changed. Because fewer experienced drivers choose this basic level of cover, insurers now see third party policies as higher risk.

Third party, fire and theft

This mid-level option gives you everything that third party cover includes, plus protection if your car is stolen, damaged in an attempted theft, or damaged by fire.

It's a step up from basic third party, but still won't cover accident damage to your own vehicle. So if you reverse into a bollard or get caught out by a pothole, you're footing the repair bill yourself.

Comprehensive car insurance

Comprehensive cover is the most popular choice for good reason. It protects you, other people, and your own car in pretty much any situation – accidents, theft, fire, vandalism, and more.

Here's something that surprises many drivers: comprehensive insurance is often cheaper than third party. Why? Insurers view drivers who choose comprehensive cover as more responsible and lower risk, so they're less likely to claim.

Beyond the price, comprehensive policies give you peace of mind. You can add optional extras like windscreen cover, courtesy cars, and breakdown assistance. And if the worst happens, you won't be left with a hefty repair bill and no way to get around.

	Cover type Third party only	Cover type Third party, fire and theft	Cover type Comprehensive

Third party liability

Fire and theft

Damage to your car

What about multi-car policies?

If you have more than one vehicle in your household, it's worth looking into a multi-car insurance policy. These policies let you insure two or more cars under one provider, often with a discount for each additional vehicle. You'll get one renewal date and one bill, which can make managing your cover much simpler.

Most insurers will let you add up to five cars on a single policy, and you can usually choose different levels of cover and excess for each vehicle. So, if one car is older or used less often, you can tailor the cover to suit. Multi-car policies can save you hundreds of pounds a year, but it's always worth comparing quotes to make sure you're getting the best deal.

Pay your car insurance annually

When you're looking to save money on your car insurance, how you pay can make a bigger difference than you might think.

Why is paying annually cheaper?

Paying your premium as a lump sum at the start of the year is almost always cheaper than spreading the cost over monthly instalments. Here's why – when you pay monthly, you're essentially taking out a loan with your insurer, and like any loan, it comes with interest.

If you can afford to pay upfront, this is one of the easiest ways to cut your insurance costs. Even if it means dipping into your savings, the amount you'll save on interest will likely make it worthwhile.

Review your add-ons and optional extras

While you're looking at your policy, it's worth taking a moment to review any add-ons or optional extras you've signed up for. Things like courtesy car cover, hire car upgrades, legal expenses cover, or loss of earnings protection can quickly push up your premium.

Ask yourself whether you genuinely need each one. For example, if you've got savings set aside for emergencies, you might decide you don't need loss of earnings cover.

Only pay for what you'll actually use. Stripping out unnecessary optional extras can bring down your total cost without affecting the core protection you need. It's all about tailoring your policy to fit your circumstances, not paying for things you'll never claim on.

Consider black box insurance

Black box insurance, also known as telematics, is a type of car insurance where your driving habits are monitored by a small device fitted in your car or through a smartphone app. The device tracks things like speed, braking, cornering and how often you drive. Your insurer uses this data to build a picture of how safely you drive, and if you're considered lower risk, you could see your premium reduced at renewal.

How does black box insurance work?

The device itself is usually installed behind your dashboard, though some insurers offer plug-in trackers or apps instead. It records your driving behaviour and sends the data back to your insurer. They'll look at factors like harsh braking, acceleration, the time of day you drive and the types of roads you use. You can usually track your driving score through an app, so there are no surprises when renewal comes around.

The better your score, the more likely you are to be rewarded with lower premiums. Some insurers even offer monthly bonuses or extra miles if you're consistently driving safely. It's a way of proving you're a responsible driver, rather than being judged purely on statistics like your age or postcode.

Is black box insurance worth it?

For new drivers and younger motorists, black box insurance can be a real money-saver. That said, it's not for everyone. If you drive late at night regularly, cover long distances or share your car with someone whose driving style differs from yours, your score might not work in your favour. You could even see your premium increase if your driving is deemed risky. It can also feel a bit restrictive, knowing your every journey is being monitored. But if you're confident in your driving and want to prove it, black box insurance is worth considering.

Improve your vehicle security

Keeping your car safe isn't just about peace of mind – it can help reduce your insurance costs too. Insurers look at how well protected your vehicle is when working out your premium, so investing in security can pay off.

Security features that could lower your premium

The right security devices can make a real difference to what you pay. Immobilisers are now standard in most modern cars – they stop the engine from starting without the correct key, making it much harder for thieves to drive off with your vehicle.

Thatcham-approved alarms are another feature insurers value. These are tested to rigorous standards and can include sensors that detect movement, glass breaking or even someone trying to tow your car away. The more sophisticated the system, the better the protection.

Tracking devices are particularly useful for higher-value cars. They help locate your vehicle if it's stolen, which means there's a better chance of recovery. Some insurers may even require one for certain models.

At Allianz, we take things like dashcams, locking devices, immobilisers and parking sensors into account when calculating your car insurance price, so make sure you let us know what you've got fitted. Generally, these features reduce the risk of a car accident or theft, which could make your premium cheaper.

Where you park matters

It's not just about what security you have – where you park overnight plays a big part too. Parking in a locked garage is usually the safest option, as it keeps your car out of sight and well protected from thieves and vandalism.

If you don't have a garage, parking on a private driveway is the next best thing. It's more secure than leaving your car on the street, where it's more exposed to damage or theft.

Insurers consider parking location as one of several key factors when working out your premium. If you live in an area with higher crime rates, street parking could push your costs up. On the other hand, secure parking can help bring them down.

The value of your car also comes into play here. A high-value vehicle parked on the street is more likely to attract unwanted attention, so where you leave it matters even more. Always be honest about your parking arrangements when you take out your policy – if you need to claim and the details don't match up, it could cause problems.

What to look for beyond price

While a low premium is tempting, it's important to check what you're actually getting for your money. Look at the level of cover, the excess you'd need to pay if you claim, and what optional extras are included or available.

Read customer reviews to get a sense of how the insurer handles claims. A cheap policy that doesn't pay out when you need it isn't really a bargain. Check the small print too, so you know exactly what's covered and what isn't.

At Allianz, we offer straightforward car insurance with three cover levels to suit different needs. So, whether you're after basic protection or comprehensive peace of mind, we've got you covered.

When is the best time to buy car insurance?

Timing can make a real difference to what you pay for your cover. Getting your quotes at the right moment could save you a fair bit of money, so it's worth planning ahead rather than leaving it until the last minute.

How far in advance should you renew?

Getting quotes around three to four weeks before your renewal date often gives you the cheapest prices. Research shows that the sweet spot is typically between 21 and 26 days ahead, with 25 days before renewal being the overall cheapest time to buy.

Insurers tend to view drivers who shop early as lower risk, which often translates to lower premiums. On the flip side, waiting until the final few days, or even renewal day itself, can push prices up significantly. Your insurer should send you a renewal invitation about three to four weeks before your policy expires, giving you plenty of time to compare quotes.

Whatever you do, don't just auto-renew without checking other options. Loyalty rarely pays when it comes to car insurance prices, and you could end up paying more than you need to. Take the time to shop around, compare what different insurers are offering, and make sure you're getting the best deal for your circumstances.

When do car insurance rates go down?

Car insurance prices can fluctuate based on the market, your personal circumstances, and the time of year. Factors like your age, driving history, where you live, and even your occupation all play a part in what you'll pay. The Financial Conduct Authority requires insurers to treat new and existing customers fairly, so you shouldn't see huge differences between renewal and new business prices from the same insurer.

While the overall market trend has been downward recently, your individual premium might still go up at renewal if your circumstances have changed, if you've made a claim, or if you've moved to a higher risk postcode. That's why it's always worth comparing quotes, even when the market is generally moving in the right direction.

How can young and new drivers get cheaper car insurance?

If you're just starting out on the road, the cost of insuring your car can feel pretty steep. The good news is there are practical steps you can take to bring those premiums down without cutting corners on cover.

Cheap car insurance for first-time drivers

First-time drivers often face higher premiums simply because insurers don't have a track record to go on. But you can make yourself more attractive to insurers by making smart choices from the start.

Consider a smaller car in a lower insurance group. Cars in groups 1-10 typically cost much less to insure than larger, more powerful models. A modest first car might not be the most exciting option, but it'll save you a significant amount on your premium.

Taking a Pass Plus course after you pass your test can also help. While not all insurers offer discounts for Pass Plus, the course itself is valuable for building confidence in areas like motorway driving and night-time conditions. Some insurers may recognise this extra training, and the skills you gain could help you avoid accidents, which means fewer claims down the line.

Car insurance for under 25s and young drivers

Drivers under 25 pay more for insurance because statistics show they're more likely to be involved in accidents. It's not personal, it's just how insurers assess risk based on age and experience.

One option is being added as a named driver on a parent's policy. This can reduce costs, but you need to be honest about who the main driver is. If you're the one using the car most often, you must be listed as the main driver. Falsely naming a more experienced driver as the main driver to get a lower premium is called fronting, which is a type of insurance fraud. In other words, it's illegal and could invalidate your insurance, leaving you to foot the bill in the event of a claim.

Tips for new drivers to lower their premium

Building your no claim discount early is one of the best ways to reduce your costs over time. Every year you drive without making a claim strengthens your track record with insurers.

Telematics or black box insurance is worth considering too. This type of policy monitors how you drive, rewarding safe habits like smooth braking and avoiding late-night trips. For young drivers, telematics can cut premiums significantly, sometimes by hundreds of pounds.

Keep your mileage low if possible. The fewer miles you drive each year, the lower the risk in the eyes of your insurer. And avoid modifications like alloy wheels or performance upgrades, as these can push your premium up due to increased theft risk or repair costs.

Finally, if you pick up penalty points on your licence, expect higher premiums. Insurers see points as a sign of higher risk, so keeping a clean driving record really does pay off.

Frequently asked questions about cheaper car insurance

What are the best ways to lower car insurance?

The best ways to lower your car insurance include increasing your voluntary excess, reducing your annual mileage, and choosing a car in a lower insurance group. Adding an experienced driver to your policy can help bring down costs, and building up a no claim discount over time makes a real difference. You should also check your occupation is listed accurately on your quote, as job titles can affect premiums. Shopping around each year, especially at renewal, is one of the top tips for finding a better deal.

How can I save money on car insurance?

You can save money by comparing quotes from multiple insurers, keeping your mileage low, and making sure all your details are accurate when you get a quote. Consider a telematics or black box policy if you're a safe driver, as this can reduce premiums. Avoid unnecessary modifications, improve your car's security, and think about whether you need optional extras like a courtesy car or hire car cover. Paying annually instead of monthly can also save you money, as monthly payments often include interest charges.

How to get cheaper car insurance online?

Getting cheaper car insurance online is straightforward. Use comparison sites to check quotes from multiple insurers at once, then visit individual insurer websites directly to see if they can offer a better deal. Make sure you enter accurate details about your car, mileage, and driving history to get the most precise quotes. You can also check if your current insurer will match a cheaper quote you've found elsewhere. Shopping around online a few weeks before your renewal date gives you time to find the best price without leaving yourself uninsured.

Why do some drivers get cheaper car insurance than others?

Insurance premiums are personalised based on risk. Drivers who are older, have more experience, live in low-crime areas, and drive cars in lower insurance groups typically pay less. Your no claim discount, driving history, occupation, and annual mileage all play a part too. Where you park your car overnight and whether you've made claims in the past will also affect your premium. Even small differences in these factors can lead to big variations in cost, which is why two drivers with similar cars can pay very different amounts.