How can you (realistically) Save on Auto Insurance?

There is a lot you can do when choosing auto insurance to get a better, cheaper deal. Whilst getting advice from friends and family can be useful, doing detailed research yourself to find the best deal for your personal circumstances is the way to go, whether your bucket of stones is comprehensive cover to ensure peace of mind or saving money by covering your basic bases with 3rd party insurance only. And let me tell you, incidentally, that's not usually cost efficient.

When you compare insurance quotes you need to take more than the cost of your monthly premium into consideration. My dad always used to say, rather eloquently, that "a deal is not a deal when it's not a deal". For many years I drove an old skadonk beetle; so old and tired, it was just not worth overly extending myself by insuring it, what with excess costs being so high, (in fact, she blushed, many insurance companies refused to touch my money) so I managed to get away with 3rd party insurance for quite some time. Then I grew up and bought a real car; one that didn't require me to leave the house with special equipment as a mother does with a newborn baby "just in case".

These days I wouldn't consider anything less than fully comprehensive insurance, but I have still managed to cut down on my premiums by researching the best deal and reading the fine print. In the digital age, there is no excuse for not being able to access all the information you need to make an informed decision about vehicle, household or life insurance, short-term or long-term.

Portal insurance web sites provide a wealth of comparative information on all types of insurance by local insurance companies and you can request an immediate quote online at a mouse click. A portal web site is one that a web master positions as an entrance to other, usually related, sites on the internet. Insurance portals provide links to the home pages of insurance companies as well as tools to help you figure out and compare what your premiums, excess and rebates will potentially look like.

So, what factors are taken into consideration when you request a quote for car insurance? And how can you find the best deal?

To find out, I went online to a comparative insurance web site and requested a free quote online to insure my car. The questionnaire I filled in seemed pretty basic but I received a list of insurance company quotes including excess figures so that I could compare quotes and select a few from which to get more detailed information. The actual figure I received directly from the insurance companies was generally considerably higher than that I originally received on the insurance portal web site. Why?

Don't be put off. A detailed analysis of your particular circumstances will refine and adjust your monthly insurance premium and excess in the event of a claim in line with the insurer's risk. At this stage of the game you only need to be looking for those insurers that come up again and again as worth further investigation.

Now, let's take a look at just a few of the factors considered by insurers when working out a custom quote after you've completed the initial insurance quote request.

Vehicle colour:

Insurers take into account practical considerations. Actuaries in grey suits have spent many years studying this but the concept is simple: who claims more and why? A white car will attract a lower premium than a non-standard metallic coloured vehicle simply because standard white paint is cheaper. (Personally, I'm sticking to any colour as long as it's black!)

The age of the driver:

More experienced drivers can expect to pay a lower premium. What is generally not realised is that the type of vehicle being insured is simultaneously taken into consideration. A youngster purchasing a Porsche will attract a higher premium than if this same individual had bought a VW Golf.

Model:

Insurers consider the prevailing preference by car theft syndicates for a particular make/ model of vehicle. They do this by monitoring police crime statistics. What is in demand? Bakkies, expensive cars that can be driven quickly over the border and, currently, vehicles that are low on fuel.

Usage:

If you use your car for work-related matters, you will need to pay a business-use premium.

Add-ons:

While non-factory standard accessories and add-ons may add value to your car when you sell it, e.g., mags and bull bars, they also may increase your premiums as the cost of replacing and/ or repairing this equipment will be more costly. As a matter of interest, consider diesel versus petrol. While diesel is superficially the fuel saver of choice, diesel parts are prohibitively expensive to replace in the long-term.

Existing household insurance:

Your monthly premium will be comparatively lower if you combine car and household insurance; the bigger the investment you make in a service or product, the more likely you are to receive an overall discount. You'll understand this if you've ever bought a pocket of potatoes instead of a bagful.

Excess:

If you are willing to increase your excess, it's likely you will be offered a lower monthly premium. (Your excess is the amount you pay towards a loss before your insurance company deigns to dig its hands into its own pocket.) Insurance companies use this marketing concept to target, for instance, older potential insureds who don't want to pay hefty monthly premiums yet have the money to pay high excess costs if the need arises. After all, how many dangers lie on the road to Simonstown gem factory on Sundays?

Security:

Anti-theft devices such as gear locks, immobilisers, vehicle tracking systems, etc., will all bring down your monthly premium.

Previous claims: Are you a bad risk? Repetitively hitting the lamppost outside your home late on Friday nights? Be assured, the increase in your premiums will reflect the number of beers you consumed before you got into your car.

It seems ironic that you have to put so much effort and money into your vehicle to bring your insurance premiums down, but if you look at the potential cost of replacing parts or even the entire vehicle itself and bearing in mind the high-risk taken on by insurance companies, it makes sense, doesn't it?