Car Insurance Myths Debunked

Posted in: Car Insurance, Driving Tips.

car insurance myths debunked
car insurance myths debunked

When it comes to car insurance, there are things we think we know to be true, such as how your car insurance gets cheaper when you turn 25. But often the reality is very different.

We take a look at nine common car insurance myths and clear up the confusion behind them.

1.Myth: Car insurance prices dramatically drop when you turn 25

Busted: Maybe this happened decades ago, but it’s not how it works any more. There’s no longer an age where you can expect a big drop in price. If you’re turning 25, you’ll see your premium drop by about £66, on average (from £1,167 last year for a 24 year old, to £1,101 this year for a 25 year old) based on the car insurance price index.

2. Myth: Insurance is cheaper if you park your car in the garage, not on the road

Busted: You’d think locking your car up safely each night in the garage would be cheaper than parking it on the road outside your home. But when you park your car in the garage there’s an extra risk of damaging your car on the garage building compared with the risks that come from parking it on the road.

car insurance myths debunked1
car insurance myths debunked1

3.Myth: Car insurance is the same price whether you renew two weeks before you need to, or on the day it’s due

Busted: Interestingly not true! The cheapest time to renew your car insurance is 21 days before your renewal is due** (average price £1,093.41). If you renew on the day it’s due, it can be almost double the cost (average price £2,208.87). So, try not to be a last-minute Nellie as it might end up costing you a pretty penny.

4.Myth: You won’t pay excess if it’s a non-fault claim

Busted: You actually have to pay your excess regardless of who is at fault. But if you’re found to be not at fault, you’ll get your excess refunded back to you. However, if you’ve opted to have legal cover on your policy, this might cover your excess.

5.Myth: Third party is cheaper than fully comprehensive

Busted: Based on over 12 million quotes over the last year, fully comprehensive car insurance was cheaper for ages 17-65, on average**. The difference between third party only insurance and fully comprehensive is pretty massive. Third party only will only cover damage done to other cars and other people. Fully comprehensive on the other hand will cover damage to your car too.

6.Myth: Car insurance is at its most expensive when you’re 17

Busted: All things being equal, its actually at its peak of being most expensive when you reach 18 (unless you have to make a claim on your policy as a teenager). Car insurance premiums for 17-year olds averaged £1,908, whereas 18-year olds were forking out an average of £2,067*.

car insurance myths debunked2
car insurance myths debunked2

7.Myth: Yellow or bright cars are cheaper to insure

Busted: This one is definitely an urban legend. Whether your car is grey and ‘hard to see against the road’ or so bright everyone will see it, the truth is, the colour of a car doesn’t affect insurance prices at all. It’s not something insurance companies use to work out your car insurance premium, so just drive whatever colour car you like.

8.Myth: If you have fully comp you can drive any car

Busted: If you have fully comprehensive car insurance, and you’re over 25, and you’ve spoken to your insurance provider to ask about ‘driving other cars’, then maybe you have it. Generally, it’s not automatically included any more as it’s a poor level of cover (third party only). It was designed for emergencies, but if you had an accident while using it, only damage to other people or other people’s cars would be covered. Definitely check whether it’s on your policy before you consider driving someone else’s car (with permission of course!).

9.Myth: If you make a claim, you only lose one year of your no-claims bonus (NCB)

Busted: A fault claim is when your insurance company has to pay out. Making a fault claim will knock two years off your no claims bonus. But it doesn’t matter how many years you’ve built up, the deduction will always start at five years. So regardless whether you have five, 10 or 15 years NCB, a fault claim will bring this back down to three, unless your NCB is protected. One thing we do know for sure, NCB is confusing!

All myths aside, the best way to get a competitive quote for your car insurance is to compare prices, making sure to check the level of cover, that it’s what you need and expect.

* Myth 1 & 6 based on data powered by Willis Towers Watson, for Q3 2019
** All data is our own Data, September 2019.




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