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How to buy the very cheapest car insurance
To buy the lowest cost insurance for your car, which is adequate for your purpose, you need to think like an insurer. What they care about is risk; they want to feel secure in offering to cover you, with a good chance that you will not be involved in a claim. To get the lowest quotations you need to reduce that risk in their eyes. Some of the main criteria they consider are:

How you could slash your premium There are a number of legitimate ways in which many motorists can reduce their premiums quite substantially. These include:

How insurers extract more money from you
Motor insurance is a cut throat business and the vast majority of drivers are looking for the very, very cheapest premiums. Many motorists use price comparison engines to get quotes, and most of them accept one of the three cheapest quotations. It is therefore vital for insurers to be able to offer the cheapest possible initial estimate, whilst still making a reasonable profit. They can do this in the following ways;

  • Add-ons

    You find your perfect policy from a price comparison site, pay the premium and relax. A few moments later you get a phone call from someone at the insurance company who wishes to check up on a couple of items. This person offers you a range of extras such as legal cover in the event of a prosecution or an accident, a guaranteed courtesy car if your own is off the road, a protected no claims bonus, or perhaps cover for breakdowns or personal accidents. When you point out that these are too expensive, you cannot afford them or you simply don't want them you are offered an immediate substantial price reduction. What you will not be told is that when your automatic renewal is processed in a year's time these extras will be included, but this time at full price. The majority of motorists never even notice.

    If you really want any of these add-ons then by all means buy them at the reduced price but make a note to check on them at policy renewal time. Bear in in mind that some insurance companies make more money out of add-ons than they do from selling you the policy in the first place. You may well decide you don't want to continue with them at the full rate.

  • Cancellations

    You buy a policy at an amazingly low price. Shortly afterwards you receive a letter from the insurance company demanding that you provide them with proof of your no claims bonus, or a copy of your driving licence, within, say, 14 days. You cannot get the proof in time, or you forget all about it, and two weeks later the insurer cancels your insurance completely and charges you £80 in cancellation charges. Can they really do this?

    Certain insurers have been doing this for some time. They will also accept a premium and then check the information you have given, either by asking you for proof or by checking information they have available in various databases. If they find any anomalies they will either (a) send you a demand for an increased premium or (b) cancel your policy and charge you a fee as above.

    Is this legal? Yes. You are not only under an obligation to provide accurate information on the proposal form, but you are also supposed to inform the insurance company of any factors you are aware of which would influence their decision on whether or not to insure you, or for how much. If you fail to do either of these you could be held in breach of contract. Oh, and the huge cancellation fee was spelt out in the policy documents. You did read these before buying the policy, didn't you?

  • lock-ins

    Insurers tell us that for our convenience they will automatically renew our motor insurance policies every year as they fall due. The charges are almost invariably made by direct debit or against our credit cards so many of us never even notice, even when premiums cost more than they did last year. It is just so easy to accept the renewal policy, rather than go to the trouble of searching for a better quotation.

    The government are quite happy about this system. It means that the number of motorists who inadvertently drive without insurance have dropped substantially. Insurers are happy about it because after they have attracted new customers with lower than average premiums and special offers they can be confident that a substantial proportion of them will renew their policies at full price for several years to come.

    Insurers are obliged to give you at least 14 days notice before they charge you for a policy renewal. You should check this carefully and if you are not happy with the new policy or the premium you need to contact the insurer as soon as possible, inform them that you do not intend to proceed and asked them to confirm in writing that they will not claim any more charges from you. It is then your own responsibility to make sure that you have alternative cover in place before your current policy expires.

    Please do not buy a different policy before you are confident that you have cancelled the automatic renewal; thousands of motorists do this every year, and it causes a lot of confusion and misunderstandings.

To fully enjoy your cheap car insurance,  you should do the following before buying a policy: