Why Cheaper Car Insurance is not Always the Best Car Insurance

Most of the people who visit our site are quite commendably trying to save money on their car insurance policy. They may be looking for a list of the cheapest cars to insure or for reviews of well-known cheaper models to insure like the Ford Fiesta, the Volkswagen Up or the Fiat Punto. The goal however is the same, to reduce the cost of their monthly or annual car insurance premiums.

Sometimes though, cheaper car insurance might not always equal better car insurance. To illustrate let’s think about the subject of voluntary and compulsory excesses.

High Voluntary Excesses

Pretty much all car insurance policies come with a compulsory excess. Sometimes though, you could also be tempted into adding a voluntary excess in an attempt to reduce your monthly or annual premium. It’s true that – in the right circumstances – this could be beneficial and it might be a risk that you are willing to take. In other cases however, adding a voluntary excess could really come back to bite if you find yourself needing to make a claim, the key here is to do your maths.

Try to think about and to balance the value of the vehicle you are insuring with the cost that making a claim might have on your no claims bonus, or even on future premiums just because you’ve made a claim. For example, if the car you want to insure is only worth £300 then you may decide that you would likely never make a claim for that vehicle if it were to be stolen, so you might think a higher voluntary excess is worthwhile. Don’t forget though that if you are involved in an accident which is deemed to be your fault, you could end up being stuck with a huge excess to pay and you might just wish that you hadn’t added that voluntary excess after all. On the other hand of course you may decide that – after weighing all of the figures up – the amount you will save on your annual premium more than covers the cost of any voluntary excess you would have to pay if you were involved in an accident that you were deemed to be at fault for.

When considering these figures it might also be worth considering the effects that having two accidents in a year might have. No-one likes to feel that they might have two or more accidents in a year, but I’m sure it will have happened to many people in the past. Sometimes you just have a bad run of things. If you have a combined compulsory and voluntary excess of £500, that’s a big chunk of money you would have to account for if you have multiple accidents in any one year, accidents that for whatever reason, you are forced to make a claim for.

Keep an eye on that compulsory excess

In this post we’ve focussed mainly on the potential impact of a voluntary excess on your car insurance policy. When comparing car insurance though, don’t forget to keep an eye on that compulsory excess too, the excess that is automatically added by insurance companies.

For instance, if you have one policy that has an annual premium of £1000 and a compulsory excess of £250, and you have another policy with an annual premium of £1030 but it has a compulsory excess of only £50, then it may well be worthwhile going for the slightly more expensive policy with the lower compulsory excess, as it could save you a lot of money in the event of a claim. If you have two accidents over the course of a year then – on the more expensive policy – you would actually end up paying £340 less when all the excesses have taken into account.

Don’t just go for the cheapest option

I know all of these figures may be a little hard to comprehend but the overall principal is this, when trying to find the right car insurance policy with the right excess – voluntary or compulsory – the key is to sit down, do your maths and take into account every possible scenario. If you do this then you will quite often find that the cheapest car insurance policy is not the best car insurance policy for your needs. Comparison sites are extremely helpful to a point, but there is still some working out that you need to do if you want to avoid getting trapped in a policy that really isn’t right for your circumstances.

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