While there are several different kinds of insurance policies that offer different levels of cover, usually the cheapest type is liability insurance or third party car insurance.
This is the minimum level of cover you are legally required to have to drive on UK roads. Third party car insurance covers the cost of compensating the damage that you may cause to someone else’s vehicle. This kind of policy will not cover any expenses incurred to repair the damage to your own car.
When does it makes sense to buy the cheapest car insurance?
The obvious reason to buy the cheapest car insurance is when it’s the only policy you can afford. However, often it makes sense because of your particular circumstances. If your car is relatively old and not highly valuable, comprehensive insurance, which can be expensive, may not make as much sense as simple third party cover. It might also make sense when you only need the insurance for a limited period of time.
What affects the cost of car insurance?
There are a number of factors that make car insurance more expensive for one person than another. These can include:
Car make and model
Average yearly mileage
Cheapest car insurance providers
The cheapest insurance for you depends on what you’re looking for in a policy, plus other factors such as your driving record, location, demographics and car. The cheapest car insurance company for one driver might not be the same one for another.
These insurers tend to have the cheapest rates overall, but you might see different quotes depending on your individual circumstances.
To find out the cheapest car insurance provider, our team analysed quotes across a number of different car insurance providers. Keep in mind that our cheapest car insurance provider for one driver may not be the same one for another due to differences in individual circumstances. Read our full methodology here to find out more.
How can I lower my car insurance rates?
There are many ways to lower your insurance premiums including:
Only pay for the cover you need. Resist adding optional extras unless you’ve decided you need them. Consider dropping comprehensive cover on an older car.
Trade in for a cheaper car. The next time you’re shopping for a new or new-to-you car, look for lower insurance rates on safer cars or cheaper cars.
Try a higher excess. Consider raising your excess, which is the amount you have to pay when making a claim before you get reimbursed. A higher excess means lower premiums.
Nominate your drivers. You should see lower premiums by adding an older and experienced driver to your policy.
Be a safe driver. Take a defensive driving course to get a safe driver discount and some new skills, and keep your claims history and tickets to a minimum.
Park in a safe location. Cars kept in locked garages are cheaper to insure than those parked on the street. Consider installing antitheft or security features for lower premiums.
Shop around to compare price. Switch car insurance instead of renewing, especially if you’ve been through any big life changes like getting married or moving. You can also use comparison quotes to ask for a price match from your current insurer.
Beware of paying in instalments. If the annual cost of your car insurance is too much to pay all at once, many insurers will let you pay your premium in instalments throughout the year. While it may save you from paying a lump sum, it typically costs more overall once interest is added.
Reduce your mileage. You could get a low mileage discount if you reduce the miles you drive. Carpool or take public transport if you can, or plan your errands for one trip per day instead of taking lots of little trips.
What can I consider removing?
You could consider dropping certain added extras from your policy to get big savings on the cheapest car insurance rates. Make sure this option works for you before cutting any of the following extras:
Courtesy car cover
Break down cover
Driving abroad cover
Courtesy car cover
Replacement key cover
Find the cheapest car insurance cover for you
The cheapest policy for one driver might not be the same for another. Every driver will get a unique quote based on their driving history, the vehicle they drive, their age, amongst other factors.
Cheap car insurance for younger drivers
One of the unfortunate realities of car insurance is that younger drivers tend to pay more for car insurance than older drivers. That’s because statistically, younger drivers are more likely to be involved in an accident, and insurers see this group to typically be a higher risk.
That said, there are ways to get a good deal on car insurance as a young driver, including:
Choosing your car wisely. High-powered, luxury and expensive vehicles cost more to cover, so stay away from them if you want to save money on insurance. A cheaper car will not only save you money at the point of purchase, but will continue costing you less for its entire life.
Building a safe driving record. If your record is better, you might get cheaper car insurance. Consider not claiming for minor accidents if you can cover the costs yourself, as a no claims history can keep future premiums down.
Taking a driving course. Taking a defensive driving course can help convince insurers that you’re responsible on the roads.
Avoiding monthly payments. If the annual cost of your car insurance is too much to pay all at once, many insurers will let you pay your premium in instalments throughout the year. While it may save you from paying a lump sum, it typically costs more overall.
Cheapest car insurance for low mileage drivers
If you’re someone who, despite having plenty of experience, doesn’t drive often, you could qualify for a low-mileage discount and reduce your premiums.
Install a telematics device or “black box” so that your insurer can see exactly how far and how safely you’ve driven.
Plan your errands for one trip per day instead of taking lots of little trips
Take the most direct route to your destination
Cheapest cars to insure
Among the ways to lower your insurance rate is to pick a car that is less expensive to cover. There are many factors that car insurance companies consider, the biggest one being the kind of car you drive.
Insurers use a group rating system of 1-50 when assessing how much a car will cost to insure. The lower the rating, the cheaper that car is to insure.
The cheapest cars to insure
Want to lower your car insurance rates? Pick a cheaper car. The below cars fall into category 1 and 2 in the group rating system.
Ford Ka+ 1.2 Studio
Nissan Micra 1.0
Toyota Yaris 1.0 Active
Volkswagen up! 1.0
Renault Twingo 1.0 Expression
Volkswagen Polo 1.0
Hyundai i10 1.0
Vauxhall Corsa 1.4 Sting
Ford Fiesta 1.1 Style
Dacia Logan 1.0 Access
Skoda Citigo 1.0
What goes into those rates? Cheaper cars to insure will generally cost less to buy, maintain and repair.
Safety. Cars that are considered safe tend to cost less to insure, primarily because they hold up well in an accident, decreasing claims.
Fuel economy. Car insurance may give you a break on your rates if you drive cars that require less petrol, or none at all such as electric cars.
Car crash statistics. Insurance companies look at crash statistics and consider the level of risk before they insure any car.
The car’s worth. High-end luxury cars are are more expensive to repair and replace after they’ve been in an accident, causing higher premiums. Insurance companies will also look at the likely hood of your car being stolen.
Size and type of engine. The more powerful the engine (ie, the higher the horsepower) the more you’ll pay for your car insurance. Diesel engines also cost more to repair, so insuring a diesel vehicle will be more expensive.
Difficulty to repair or replace. The more it costs to repair your car after an accident, the more risk it presents to an insurer. This is often a drawback when making claims on imported or luxury vehicles.
Certain makes and models. Some makes and models are statistically involved in more accidents than others. So even if you haven’t been involved in an accident, the fact that you’re driving that type of car means you’re more of a risk and you’ll get higher premiums.
On the other hand, some cars will consistently cost more to insure.
Sports cars and high performance vehicles. This is a red flag for insurers, as they assume it will typically be driven faster than a standard car and therefore face a higher risk of being more severely damaged.
Soft tops or convertibles. Vehicles with soft tops are easier to break into than conventional cars, and they tend to need repairs at some point, so they represent a substantial risk to the insurer.
Modified cars. Cars that have added features like more horsepower or tinted windows are generally more expensive to cover.
Age of your car. Spare parts can be much harder to track down for older cars.
Diesel cars. Diesel cars often cost more to repair than cars that need petrol.
High-theft vehicle. Some types of cars are targeted more often by thieves, because they’re relatively easy to steal or strip for parts. Based on statistics alone, this could slightly elevate your rates.
Cheap car insurance traps
Automatic renewal. This might be easy, but it’s not cheap. Insurers offer better deals to new customers than they do to existing ones, so don’t blindly renew your policy each year. Always check quotes from multiple providers, including your current one. If your insurer quotes you a lower new customer price than you’re currently paying, try asking for a discount. Premiums are always changing, so getting the cheapest car insurance means always looking at other options.
Not knowing how your coverage works. Check the fine print on your policy before signing up, and ask yourself if you know exactly what’s covered, what’s an optional extra and what’s not covered.
Making too many claims. Before you make a claim, remember that your claims history will influence the future cost of your premiums, and you may have a high deductible to pay. If the accident wasn’t too severe, the excess alone might cost more than the damage and it might not be worth being hit with increased premiums.
Too good to be true. Price is obviously an important factor when shopping for cheap car insurance, but don’t just choose a policy based on price alone. Compare the features, benefits and limits of several policies on the market. If you find much cheaper car insurance from one insurer, look for the catch.
Sky-high excess. You can save money by selecting a higher excess in return for cheaper premiums, but if your excess is too high it may make it too expensive for you to ever make a claim. A good excess is high but affordable.
Letting others drive your car. If you have a policy that lets you nominate specific drivers or drivers above a certain age, don’t let an excluded driver take the wheel. They are usually not covered at all in the event of an incident.
The car insurance policy that works for you won’t necessarily work for someone else. And because of this, it’s important you consider your insurance options carefully.
There will be factors that you can alter, which should have a positive impact on the overall cost of your cover such as lowering your mileage, driving safely and carefully, shopping around and paying up front.
Remember that “cheapest” doesn’t always mean “best” and opting for the cheapest cover could mean you forfeit protection in key areas.
Budget car insurance companies can offer a good rate for drivers who have trouble getting covered, but they’re not for everyone. You might find better customer service, mobile apps and cover from bigger national companies, but those benefits don’t always come with the lowest insurance rates.
Just about every car insurance provider offers discounts, and you could save big with driver and vehicle discounts if you qualify.
Defensive driver. Take and pass a defensive driving course to get a discount with some providers.
Anti-theft device. A car alarm will deter would-be thieves, which lessens the insurer’s risk. Today, these alarms come standard on most cars. But don’t forget about other anti-theft devices, like a steering wheel lock bar, an electronic immobiliser or a vehicle tracking system.
Multiple policies. Bundling your policies can bring big savings. If you and a member of your household both have car insurance, make sure you get both cars on the same policy. You can get even greater savings by bundling other insurance policies like homeowner’s and life insurance.
Safety devices. A car with safety features or above average safety ratings can save you money.
Paid in full. If you are financially able to pay your full premium upfront instead of in monthly payments, you are likely to get a discount.
Homeowner. If you own a home, you can save on insurance, even without bundling it. Insurance providers assume homeowners are more financially stable and are, thus, less of a risk.
One way to lower your rates would be to go for a less expensive cover or opt for simple liability insurance. It also helps to improve your driving record and reducing claims. Shop around to get better rates, and then talk to your current provider to see if you can get a lower rate before switching car insurance.
*Based on independent online research by Consumer Intelligence (March ’20). 51% of car insurance customers could save £285.88.
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