New car? Spend less on cover

With the changing of the seasons comes the new car registrations, with March 1 seeing the first '13' plates leaving the showrooms.

16:38 06 March 2013

 

As the British weather becomes ever more unpredictable, the arrival of spring is not so much heralded by the blooming of snowdrops and daffodils as the sprouting of traffic cones and temporary traffic lights as local councils use up their works budgets. 

 

And with the changing of the seasons comes the new car registrations, with March 1 seeing the first '13' plates leaving the showrooms. 

If you're in the market for a new car, then there are all sorts of other costs that need to be factored in above and beyond the windscreen price, such as fuel, road tax and, of course, car insurance. 

 

All these factors are in some way influenced by the type of car you choose, so you need to make sure you choose the best car to fit your needs, both from a practical and financial perspective 

 

For instance, although relatively similar in size, a 3.6litre petrol engine Land Rover is going to cost more to both buy and run than a 2litre TDI Volkswagen Tiguan. 

 

And while we can't do anything about the price of fuel, road tax or the number of children you have to ferry around, we can help you when it comes to cutting the cost of car insurance. 

 

So here are some things you should keep in mind when choosing your new car... 

 

The impact of insurance groups

 

The insurance group your car belongs to goes a long way to determining the cost of your car insurance. The general rule is: the lower the group, the lower the premium. 

 

There are 50 groups, along with a further 20 for motorbikes and 20 for commercial vehicles, Groups are allocated according to factors such as performance, security and the cost of repairs, so the choice of car is crucial. 

 

And it's not just the make and model that needs to be considered as a different specification of the same vehicle can also make a difference. For instance, a Ford Focus 1.6 Studio 5-door hatchback is in group seven while the 1.6 Titanium X 5-door hatchback is in group 26. 

 

When running insurance quotes on the two vehicles, I found that the Studio model would cost me £395.60 to insure for the year while the Titanium X would £440.53, both with voluntary excesses of £150 and compulsory excesses of £200 and £150 respectively. 

 

So, in spite of being separated by some 19 insurance groups, the difference in premium price was just £44.93 - which doesn't seem like an awful lot when you consider the better specification of the Titanium X model. 

 

Where the real dilemma will lie, in this instance, is whether or not these extras are worth the extra £8,000-£10,000 that is slapped on the screen price. 

 

New car security

 

Car security also has a bearing on the cost of car insurance and, given the amount of gadgetry that tends to come with new cars, you could be forgiven for expecting your new car to come with a factory fitted alarm and immobiliser - but this may not be the case. 

 

For instance, while the Ford Focus Titianium X comes with an alarm and immobiliser as standard, the Studio model only offers an immobiliser, and does not even include an alarm in its list of optional extras. 

 

So make sure you check the full specification of the vehicle you're buying before contacting your insurers as an inaccurate declaration could invalidate your policy. 

 

Also bear in mind that, when it comes to vehicle security, choosing a less desirable model will make your car less attractive to thieves and more attractive to insurers. It's also a good idea to keep your car in a locked garage, or at least on a driveway, overnight as this can help to bring down the cost of cover. 

 

Free insurance 

 

If you're in the market for a new car, there's a good chance that you'll be offered all kinds of incentives to drive one from the forecourt, from interest-free finance to free insurance. 

 

However, before agreeing to any finance deal you should make sure that there aren't more cost effective or convenient ways to pay for your new car. 

 

If you're lucky enough to be offered free insurance then you'd be mad not to take it - but be sure to check the full terms and conditions to make sure that the policy fits your needs and that there is nothing missing from your usual level of cover. 

 

For instance, your preference might always be to add breakdown assistance to your cover, so make sure you're not caught short if this isn't included with your year's free insurance. 

 

And adding breakdown recovery to your policy may not be the most cost-effective way of doing things, so use MoneySupermarket to compare breakdown cover before you sign up. 

 

It's also important to keep a note of the anniversary date of your new cover and then shop around for a better deal come renewal time. 

 

Trying out telematics 

 

While we're talking insurance, it may be worth considering a telematics policy
, which involves an electronic 'black box' being placed in your car to monitor your driving and calculate your insurance premium accordingly on an ongoing basis. 

 

This type of insurance has become popular among young drivers, some of whom have seen dramatic drops in their premiums when they are judged on their individual driving and not purely as part of a high-risk demographic. 

 

And it seems that telematics could be about to hit the mainstream, as Citroen has recently launched a car that offers a 'black box' as standard. 

 

The new Citroen C1 Connexion Edition offers eligible drivers free insurance for the first year, subject to two years' no claims discount (NCD) and provided the car is funded with Elect 3 or Elect 4 finance. 

 

Drivers with one year's or no NCD will also be offered discounted cover, for example, a 19-year-old with no NCD could pick up insurance on C1 for as around £950. 

 

Any drivers who do take on this type of deal should still shop around for cover once their year's free insurance has expired to make sure that they get the best deal. 

 

It's also worth noting that most telematics policies are based upon a relatively low annual mileage agreement and so may not be suitable for any drivers covering over, say, 8,000 miles per year. 

 

Cutting the cost of cover 

 

Of course, there are those tried and trusted techniques to cut the cost of cover, from simply comparing quotes to increasing the excess (the amount you pay up front in the event of a claim) - for a full run down of money saving tips, click here. 

 

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.