5 Things to Know When Shopping for Car Insurance in the UK
Published 25th of April 2012·Updated 20 April 2026
Reviewed by: Reviewed for accuracy April 2026
Getting the best deal on car insurance in the UK comes down to five key factors: comparing quotes online, choosing the right excess, matching cover level to your needs, understanding what is included, and knowing how your vehicle type affects the premium. Taking an hour to get this right can save you hundreds of pounds a year.
Short Summary
Comparing quotes through a price comparison site such as Compare the Market, MoneySuperMarket, or GoCompare is the fastest way to see a wide range of prices in one place. Always check at least two comparison sites as not all insurers appear on every platform.
A higher voluntary excess reduces your premium but means you pay more out of pocket if you claim. Only raise your excess to an amount you could comfortably afford to pay.
Third-party only is the minimum legal requirement in the UK but is not always the cheapest option. Comprehensive cover is often competitively priced and provides significantly better protection.
Your car's insurance group (1 to 50) is one of the biggest factors in your premium. Lower-group vehicles cost less to insure.
Compare quotes online before calling anyone
Price comparison sites show dozens of quotes in minutes. MoneySuperMarket, Compare the Market, GoCompare, and Confused.com are the four main UK comparison sites. Because insurers appear on some platforms but not others, it is worth checking two or three. Admiral, Direct Line, and Aviva do not always appear on comparison sites, so check their websites directly as well.
Prices can vary by hundreds of pounds for identical cover. The Association of British Insurers (ABI) reports that drivers who switch at renewal rather than auto-renewing typically save significant amounts. Since January 2022, the FCA has required insurers to offer existing customers the same price as new customers, but switching still often delivers better deals.
Choose your excess carefully
Your excess is the amount you pay towards any claim before your insurer covers the rest. There are two types: compulsory excess (set by the insurer) and voluntary excess (chosen by you). Increasing your voluntary excess reduces your premium, but only do this if you could genuinely afford to pay that amount if you needed to make a claim.
| Voluntary excess | Typical impact on premium |
|---|---|
| £0 | Base premium |
| £250 | Reduction of roughly 5-10% |
| £500 | Reduction of roughly 10-20% |
| £1,000 | Reduction of roughly 20-30% |
These are approximate figures; the actual saving depends on your insurer, age, vehicle, and claims history.
Understand the three cover levels
Third-party only, third-party fire and theft, and comprehensive are the three levels of car insurance available in the UK. Third-party only is the legal minimum; it covers damage you cause to other people and their vehicles but covers nothing on your own car. Surprisingly, comprehensive cover is often only marginally more expensive than third-party only, because lower-risk drivers tend to choose comprehensive policies.
If your car is worth less than £2,000, comprehensive cover may cost more than the car's value in the event of a write-off, which is worth factoring in. If your car is worth more than that, comprehensive cover is almost always the better choice.
Ask what is included and what is not
Policies vary in what they include as standard. Some include breakdown cover, courtesy car, legal expenses cover, and key cover as standard; others charge extra for each. When comparing quotes, check what is actually included in each policy rather than comparing price alone.
Multi-car policies (available from insurers such as Admiral) can save money if you have two or more vehicles in the household. Black box (telematics) policies, which base your premium on actual driving behaviour, can offer significant savings for younger or lower-mileage drivers.
Your vehicle type significantly affects your premium
Every car model in the UK is assigned an insurance group from 1 to 50. Group 1 cars (such as the Volkswagen Up or Fiat Panda) are the cheapest to insure. Group 50 cars (typically high-performance or luxury vehicles) are the most expensive. The group reflects repair costs, performance, and theft risk.
Using your vehicle for business purposes, towing a caravan, or driving more than average miles all raise your premium. Declare usage accurately: understating mileage or not declaring business use can invalidate your policy and mean a claim is not paid.
FAQ
Is it cheaper to pay car insurance monthly or annually?
Paying annually is almost always cheaper. Monthly payments are effectively a form of credit, and insurers typically charge interest of 15 to 30 per cent APR on monthly payment plans. If you can afford to pay upfront, paying annually saves money. If you cannot, compare the total cost including interest before committing to a monthly plan.
Can I get car insurance with a poor driving record or previous claims?
Yes, though your premium will be higher. Specialist insurers including Adrian Flux, Hastings Direct, and Quotezone can provide quotes for drivers with claims or convictions. Be honest about your history on applications; failing to disclose relevant information can invalidate your insurance.
Will my premium go up if I make a claim?
In most cases, yes. Making a claim typically results in higher premiums at renewal and may affect your no-claims discount (NCD). For minor damage, it is often worth calculating whether the repair cost is less than the premium increase over the next few years before deciding to claim.
What is a no-claims discount and how long does it take to build?
A no-claims discount (NCD) reduces your premium for each year you drive without making a fault claim. Most insurers offer significant discounts after three to five claim-free years. You can protect your NCD by paying an additional premium, which allows you to make a set number of claims without losing it.
Do I need to tell my insurer if I work from home more than before?
Yes, if your commuting mileage has reduced significantly. Lower annual mileage typically reduces your premium. Contact your insurer to update your policy if your circumstances have changed materially. Providing accurate information is also important for ensuring your policy remains valid.
What should I do if I cannot afford car insurance?
If cost is a barrier, compare quotes for lower-powered vehicles, which tend to fall into lower insurance groups. Consider adding a more experienced driver as a named driver if appropriate (not as the main driver if they will not be the primary user, as this is illegal and known as "fronting"). Contact Citizens Advice if you are in financial difficulty; they can help you explore your options.