Insurance
The Effect of Car Modifications on Car Insurance Prices
The motoring world is changing in the post recession era, with moneysupermarket.com reporting that car insurance prices rose by 40% over the course of 2010. This is having an impact on motorists across the country who are doing what ever they can to lower premiums.
There is a general belief that car modifications should therefore be avoided in light of these changes. However, this is a misconception and there are a number of modifications which won’t actually impact upon car insurance prices.
Modifications and their impact
Not all modifications are blatantly obvious external additions. It could be something as small as replacing your cassette player with a CD player. This is still classed as a modification which is defined as any change which results in the vehicle deviating from its original specification. The addition of televisions and DVD players would also fall into this category.
These are unlikely to have a significant impact on premiums as insurers will only be covering the statistical likelihood of these additional features being stolen. However they can still impact heavily on motorists if insurers are not informed about the additions when a claim is made as it could invalidate any claims made.
The only modifications which will have significant financial implications are aesthetic or performance enhancing modifications such as the addition of body kits, alloy wheels or tinted windows. Research by uSwitch recently suggested that a young male driver with a Ford Focus which is equipped with a body kit and tinted windows could face an additional £3,000 fee on top of their basic car insurance costs.
Reduce your car insurance costs
Regardless of what type of modification you have made, there are ten key things you can do to recover costs. Obviously, when you add expensive modifications such as body kits you will only be limiting the damage.
However, with smaller modifications such as the addition of DVD players you could actually make an overall car insurance saving through taking advantage of the following car insurance tips:
1. Its all about you
The factor which has the single biggest impact on car insurance premiums is the drivers covered by the policy. There isn’t much you can do to alter your age or gender (both of which are currently used as an area to discriminate against motorists), but you can improve your experience levels through advanced driving courses such as pass plus.
2. Additional drivers
Additionally you could add another driver to the policy who is both older and more experienced. The insurer will automatically assume that this driver will be sharing the driving with the main policy holder and it will therefore result in a car insurance savings. However, do not allow the other driver to become the main policy holder for the benefit of cheaper premiums as this is a practice known as fronting which has been deemed illegal.
3. Choice of car
The next most important factor when it comes to insurance is the type of vehicle covered by the policy.
Each car is assigned to an insurance group numbered between one and fifty. Cars in insurance group one are generally the cheapest to insure and if you are interest in significantly reducing car insurance premiums you should therefore opt for a vehicle in the lowest insurance group possible.
4. Safety modifications
Not all modifications will be viewed negatively by insurers. The addition of security systems such as approved alarms and/or immobilisers will reduce the statistical likelihood of your vehicle being stolen. This will be encouraged by insurers in the form of cheaper car insurance premiums.
5. Park Safely
Where you park your vehicle will also have an impact on car insurance prices. If your car is parked on a public road rather than in a locked garage it will be statistically more likely to be vandalised or stolen.
Insurers will therefore offer cheaper premiums to policy holders who are planning on parking their vehicle in a more secure location.
6. Cut down your miles
The more miles you travel, the more likely it is that you will be involved in an accident and make a claim. Insurance companies are more aware of this fact than most and will therefore offer cheaper prices to motorists who set a smaller mileage allocation.
You should therefore set the mile allowance on your policy as low as possible in order to ensure that you are not paying for miles that will simply lie idle. However, do not set a mileage allocation which is too small, because this will render any claims made past this point void.
7. Consider excess
Excess is the amount of money you are willing to pay towards the cost of repairs when ever a claim is made. Therefore, if you have a higher excess level set on your policy the insurer will have less to pay out when a claim is made as the policy holder will cover a larger proportion of the total expense themselves.
A higher excess level will therefore result in cheaper premiums as you will be viewed as less of a burden by insurers. However, be careful not to offer to pay more than you know you would be able to afford if the worst case scenario occurred.
8. Consider cover
There are three different levels of cover to choose from:
- Third party- where the insurer pays for repairs to other people’s property but won’t pay for the policy holder’s vehicle.
- Third party fire and theft- where the insurer pays for repairs to other people’s property but will only cover expenses on the policy holders vehicle if it is damaged by fire or stolen.
- Fully comprehensive- where the insurers pays for repairs to other people’s property and will also cover expenses on the policy holders own vehicle.
Of the three of these, third party cover is the cheapest option because it is the bare legal minimum. Fully comprehensive will cost the most in order to reflect the additional cover offered.
Third party is a good option if you have a vehicle worth under £500, where you would be paying more in excess than what the vehicle is actually worth. However, when more expensive vehicles are involved it is a very risky strategy to take a chance on anything other than fully comprehensive.
9. Shop around
Once you know what kind of insurance package you are looking for you can then start to shop around to find the cheapest deal available. The quickest and easiest way of doing this is by utilising price comparison websites which will compare deals available through hundreds of insurers in a matter of minutes. This could help save you both time and money.
10. The best not always the cheapest
The final point to remember is that the cheapest deal is not always the best value for money. An increasing number of insurers are not omitting vital elements of their insurance package, such as legal protection or European breakdown cover, which previously came as standard. This is being done so that the insurers are able to offer cheaper premiums and hence appear higher up on price comparison websites.
You should therefore always check the small print of the policy in order to ensure that you are getting the cover you require.
