Compare Car Insurance: some background information

Car insurance? You probably just want to get some, not hear its life story. But it’s surprising how useful a bit of background knowledge and research can be. For example…

Car insurance premiums, which rose steadily through the late nineties and early noughties, are now generally levelling out and in some cases actually falling. This is partly to do with the amount of online insurance brokers coming into the market. One potential plus with online/telephone brokers is their independence. Traditional brokers might, the theory goes, have established relationships with certain companies and thus be inclined to put your business their way. And if you call an insurer directly you may need to ask the right questions to find the cheapest quote, which is bad luck if you, not being an insurance expert, don’t know what the right questions are. Theoretically, an independent broker will be able to cast their net wide, ask those questions for you and won’t have any interest in selling you something more expensive than you need.

Car Insurance brokers are not always 'independent'

This being a less than ideal world theory and practice may not always match. For example brokers of all kinds have certain insurance companies on their books and will by default only provide you with quotes from those. But with a reliable company the principle is a reasonable one. Bear in mind though that although some brokerage companies will emphasize to you how daunting and potentially risky it is to attempt to buy your insurance directly, it’s not necessarily the case. It depends how much time and effort you want to or can put into finding quotes. To get a good deal it’s worth casting your own net wide. Increased competition has put the buyer at as much of an advantage as it’s possible to have in an admittedly captive market like car insurance. It can be hard to compare quotes, though, because of the way company websites are structured. Sites such as moneysupermarket.com and the Motley Fool (www.fool.co.uk) are useful starting points for getting information and/or comparing quotes. It’s worth doing some research. If you know what you’re talking about, your chosen insurer may be more open to negotiation.

A word of caution: in the business world as in the social world, those new on the scene make more effort to impress. Once they have you, a company may raise your premiums after a year or two in the hope that you won’t want the bother of switching insurers. Ask what the likelihood of a rise in premiums is when you get your quote, and bear in mind that well-established insurance companies could be less subject to fluctuations in charges (although little is certain in this game, unfortunately). Look at interest rates charged for spreading the premium payment too – they vary wildly but are usually high. And then there’s the matter of the compulsory excess often charged to young drivers, which can also differ significantly between companies.

… so there you are. Bet you’re glad you bothered to read it now. For information about some of the major companies plus a few more tips and suggestions about getting the right policy, take a cruise round this site. Bon voyage!

 

 

 

© AskFinancially.com 2008

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