What Affects the Price of Car Insurance?

When it comes to getting car insurance, you want the best price. You might think that shopping around is the best way to find a good price. However, there is only so much that going to different insurers can do.

Insurers all have a wide-ranging set of criteria that affects the price of car insurance. For many people, being aware of these factors might be a better way of lowering the cost of their car insurance than shopping around.

Here’s a roundup of some of the key factors that will determine the price of your car insurance and what you can do to reduce your insurance premium.

The type of car you drive

As you would expect, the car you drive affects the price that insurers will offer you.

Cars are grouped based on the new vehicle value, repair cost, performance, safety and many other factors. These groupings play a role in calculating your car insurance premium.

If your car is an expensive brand new sports car, it will be more costly for your insurer to replace it. That means that they will want to charge you more for your insurance to make up the cost. Cheaper cars are usually more affordable to insure, as paying to replace a write off is less for the insurer.

Modifications

If you have made modifications to your vehicle, like adding tinted windows or a custom exhaust, this can impact the cost of your car insurance.

However, not all modifications affect your car insurance. Installing safety features like immobilisers and parking sensors will not hike up your car insurance premium. In fact, they might even bring the price down. 

In the UK, you must let your insurer know if you have made any modifications to your vehicle. If you don’t, your claim may be refused, and your insurance will be invalid.

How secure your car is

Built-in security measures like alarms and immobilisers will help reduce the cost of your car insurance premium as they help keep away thieves.

Your marital status

If your partner intends to drive your vehicle, they can be added as a named driver. If they have no claims history, you might even benefit from cheaper insurance costs.

However, fraudulently adding a main driver with more driving experience to get cheaper car insurance is known as fronting. This is illegal, and you could see your car insurance invalidated and even face criminal convictions. 

Your job title and industry

The insurance industry makes decisions on the price of your car insurance based on what sort of job you have. The industry keeps records of who is likely to claim on their insurance. Different industries and job titles are more or less likely to make a claim.

Some occupations mean spending more time on the road, night driving, working in higher-risk areas, or carrying specialist equipment in the vehicle.

Other roles that are considered relatively risk-free and don’t involve lots of driving often come with cheaper car insurance premiums.

Job titles can affect the price of your car insurance as well. For example, many insurers would offer lower insurance prices to a ‘chef’ than they would to ‘kitchen staff’. If you have a job that could be given more than one title, it is often worth checking the quotes that those titles receive.

It’s illegal to declare false information. But if your role could come under a few different titles, it’s worth checking the cost against each of them.

Where you live

Your address also has a bearing on the cost of your car insurance. This depends on the average number of claims in an area and the proportion of claims that may be fraudulent.

Areas with higher crime rates, more accidents and are busier are also likely to receive higher insurance premiums.

But if you live in a rural area with a relatively low crime rate, your insurance provider will likely charge you less.

Where you park

Insurance companies will want to know where you keep your car – particularly at night.

Cars parked on the road will likely face higher insurance premiums than those stored in a garage or on a private driveway. This is because the vehicle is more likely to be damaged or stolen on the road than in a private location.

Your driving habits

How you drive affects the price of your car insurance. If you drive much further than the average, there is a higher chance of having an accident. As a result, insurers are likely to charge you a higher premium.

You should be honest about your expected annual mileage: you don’t want an insurance provider to think you’ve misled them on your application by understating how many miles you expect to drive.

Some insurers offer a telematics device to check you are a responsible driver. Often known as black box car insurance, these devices offer better insurance prices to drivers, as they can ensure that you are driving responsibly.

Your age

The age of the driver factors heavily into the car insurance premium. Newer drivers are less experienced on the road, resulting in an increased likelihood of a car accident. Drivers over 75 are also considered at higher risk of an accident.

Because of this, insurance providers are likely to increase the cost of car insurance for these groups.

Your driving history

Your history and driving record can have a significant effect on insurance pricing.

If you have an extensive claims history, insurers are less keen to offer you a policy. As a result, they will likely provide higher premiums to make up for this.

If you have points on your driving record or a history of suspensions or convictions, these can also make your insurance more expensive.

Insurers do not want you to need to make a claim. Any of these factors can make it seem more likely that you will need to.

The choices you make

Insurance policies are not all the same as each other. You can vary the voluntary excess, the mileage, and even the number of years of no-claims discount can vary.

Taking a higher voluntary excess can result in lower car insurance rates, as insurers will have to pay less in the event of a claim. This is only worth doing if you’re happy to pay that level of excess in the event of a claim.

On the other hand, choosing a car insurance policy with no voluntary excess would result in the insurer paying more in the event of a claim. So, this usually leads to higher premiums.

If you add additional or non-standard cover, this will typically cost more. This might include legal assistance, windscreen cover, or driving in Europe.

The type of policy you choose

Insurance providers offer three levels of cover:

• Third-party cover
• Third-party, fire and theft cover
• Comprehensive coverage

It’s worth checking the insurance rates for each of the three levels of cover, as you might be able to get more for your money.

If you’re looking to learn more about the types of car insurance, our guide will provide you with everything you need to know.

FAQs

Does age affect car insurance?

Age is one of the most significant factors that an insurance company will consider when calculating car insurance premiums. Young drivers and those over the age of 75 are considered high-risk, so they may face increased car insurance premiums.

Does a car being a Cat D affect insurance?

Generally, an insurance company will charge more to insure a Cat D car. Some insurers will refuse to cover you, but most will just charge a higher fee.

Does having a Cat C car affect insurance?

As with Cat D cars, insuring a Cat C car will likely mean your insurance company charges you an increased premium. The provider will check the vehicle history when you make an insurance claim. So if you don’t declare that it was a write-off, you could invalidate your insurance cover.

Does the value of a car affect insurance?

Yes, underwriters do consider the value of your vehicle when calculating your car insurance premium. However, other factors are also taken into consideration, such as the driver’s age, driving record, the type of car, and where they live.

Get temporary car insurance with Goshorty

The length of your policy can change the price you are offered. For many drivers, a traditional year-long insurance policy is likely to be much more expensive than they would like to pay. 

If you do not drive regularly or only get insured on someone else’s car, then there is no need to get an expensive insurance policy that covers you for the time you do not need.

Temporary car insurance only covers you for the length of time you need to be covered. This can result in a much lower premium than if you were to take out an unnecessary year-long policy.

With GoShorty, you do not have to cover your car for any longer than you need. This could be as little as one day of insurance or up to 28 days of temporary car insurance.

Save yourself money with one-day car insurance – get a temporary car insurance quote and only get the cover you really need.