UK households can save up to £534 on car insurance by avoiding two costly mistakes
UK households can slash £534 off their annual car insurance costs by avoiding two costly mistakes.
experts say that buying your at a can result in significant savings, as can the type of payment method you choose.
The experts warn that by buying at the wrong time and selecting the wrong payment plan, you are opening yourself up to staggering overcharges.
Firstly, timing is important as insurance companies calculate premiums based on perceived risk, so if you leave your purchase until the last minute, then you may be seen as disorganised and potentially higher risk – which can lead to higher costs.
To avoid this, experts say you should aim to buy your car insurance between 21 and 26 days early as this signals to insurers that you’re a careful planner, which in turn leads to lower rates.
According to Number 1 Plates, making a late purchase will be costly and those that buy their car insurance on the same day face paying up to £202 more than arranging it 21 to 26 days in advance.
Secondly, when choosing your monthly payment plan, insurers typically treat the agreement like a loan and will add interest fees that can exceed 20%. Even drivers with good credit often end up paying an extra 10% or more, but if you switch to an annual payment plan instead you can eliminate these charges entirely.
Experts say those who pay monthly instead of annually can add an extra £267 to their bill due to interest fees. Together, these two mistakes can mean paying a whopping £534 more per year for your car insurance.
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To avoid these costs, experts say you should aim to secure your policy at least 21 days before it starts, pay annually to avoid the hidden interest fees of monthly payments, and compare quotes on comparison websites before buying to make sure you’re getting the cheapest deal.
It’s also worth reviewing your policy details to double check that your mileage and usage estimates are accurate to avoid any inflated costs.
A spokesperson from Number 1 Plates said: “Too many drivers overpay for car insurance without realising it. By buying early and paying annually, you can save hundreds of pounds. These small adjustments make a huge difference, and it’s something every motorist should take seriously.
“Don’t let these avoidable mistakes drain your wallet. Take control of your car insurance today, and you could save up to £534 a year. That’s money better spent on upgrades, repairs, or even a holiday.”