Used car parts and car insurance

 

When searching for car insurance quotes everyone wants an affordable deal - but did you know that driving a used car could help you save money?

Here we look at why you should consider replacing used car parts rather than buying a new car and other ways to save on car insurance.

How can used car parts help you save on car insurance?

Car insurance companies consider a number of factors when assessing premiums. Among their considerations are: your personal circumstances, such as whether you are married and your occupation; your annual mileage; your address, such as whether you live in a busy traffic zone or a high crime area; the driver's history, such as if you have made claims or have motoring related convictions on your record; and, of course, the vehicle itself.

Many drivers wrongly assume that new cars are the cheapest to insure, believing they are more reliable than used cars. In reality however, that's not the case.

The Association of British Insurers (ABI) has a database that places vehicles into groups based on how much they typically cost to insure - the groups range from 1-50 (previously 1-20). The lower the group, the cheaper premiums tend to be. Among the considerations for the group ratings is the cost of replacement parts, the car's performance capabilities, its security features and so on.

Generally, used cars are cheaper to insure. This is because they typically cost less to repair/replace than new cars. If you need a replacement part for a used car following an accident it will usually be much less expensive than replacing a part on a new car. Indeed even though the security features of new cars are usually of a higher quality than those fitted into used vehicles, this can be easily addressed by upgrading your vehicle's security system.

So if your used car has an issue and requires a replacement part, it will usually prove more cost effective to replace this part rather than consider buying a new car.

How used cars can help young drivers to lower premiums

Young drivers are hit by notoriously high car insurance premiums because statistically they are more likely to be involved in an accident than more experienced motorists. According to the Driving Standards Agency, one in five drivers has a crash within six months of passing their driving test and one in three drivers that dies on the UK's roads is under the age of 25. As such, the average cheapest car insurance quote for 17-year-olds is £2,455 according to a comparison website in November, 2009.

However, there are ways for young drivers to bring premiums down - and choosing a used car is one such step.

To illustrate the savings we compared quotes for an 18-year-old male sales representative from Cheshire who has been driving for just one year and has yet to make a claim or pick up a motoring conviction. By driving a 2010 Vauxhall Corsa Energy 1299cc with a value of £8,000, the cheapest quote available for this driver was £3,234.20 a year. However, if the same driver instead owned a 1999 Vauxhall Corsa GLS 1389cc with a value of £2,500, his cheapest quote would drop by more than £700 a year to £2,507.39. So even though he would be driving a car with a more powerful engine, he would still save money by opting for a used car.

Further savings could be made if the driver kept his car choice conventional. Generally small cars with less powerful engines earn the cheapest premiums. It is also advisable to opt for a car with no modifications and a standard specification.

Other ways to save on car insurance

Driving a used car is just one step to saving money on car insurance. Here are some additional tips:

- Agree to a mileage cap: The fewer miles you drive, the lower your premiums should be as you are less likely to be involved in an accident.

- Choose the right level of cover: Think carefully about the level of cover that's right for you. There are three broad choices - third party only; third party, fire and theft; and comprehensive cover. Generally, the more cover you have the better in case an accident occurs but if you drive a low value vehicle it may be more cost effective to opt for a third party policy. Should you choose comprehensive cover examine your options and don't pay for features you don't need - for example you may not need a courtesy car if you already have access to another vehicle.

- Increase security: Consider investing in security devices such as an alarm, immobiliser or tracker. Your insurer should be able to recommend which devices can earn the largest discounts on your premiums.

- Increase your voluntary excess: The excess is your contribution towards a claim and by agreeing to pay more in the event of an accident you will usually lower premiums. However, don't go overboard - keep the excess at a level you can comfortably afford.

- Park safely: Most insurers will offer cheaper premiums if you keep your car in a locked garage overnight.

- Pay annually: Some insurance companies charge interest on monthly payments so look to pay premiums upfront.

- Shop around: Compare as many quotes as you can to ensure you're receiving a competitive deal. Some of the leading comparison websites will compare quotes from as many as 120 insurance companies. Just remember to look beyond price alone and also consider what you're getting for your money.