When it comes to car insurance, there are a lot of misconceptions and myths flying around that make it challenging to choose the best cover.
However, insurance doesn’t have to be complicated, and our experts at Leasing Options are debunking the common misunderstandings people make to help you make the right choice.
Myth 1 – You get the best price if you auto-renew your policy
While auto-renewal options are a convenient way to cover your vehicle, it doesn’t mean you’re getting the best price for the policy.
Many car insurers will endeavour to find you a great deal. But looking around could save you money. Use comparison sites to get an overview of the best options. However, it’s important to remember to add the correct details, as some policies may be cheaper with larger excesses or fewer annual miles.
When your insurance is up for renewal, it’s a great idea to call your provider to see whether they can get you a better deal. Most companies won’t want you to leave, so they will check what they can offer. Sometimes you won’t be able to secure a cheaper deal, but sometimes you will, saving you the hassle of moving.
Myth 2 – Third Party insurance is the cheapest option
There are different levels of cover available for an insurance policy – fully comprehensive, third party only and third party, fire and theft.
Many people assume third party only is the cheapest as it provides the lowest level of cover – basically, it covers the costs of damage or injury caused to third parties in an accident. But this isn’t necessarily true.
This type of policy often attracts higher-risk drivers, and insurance companies may charge more to cover this risk.
It’s important to note that insurance cover is based on circumstances, driving history and a range of other factors. So, prices will change depending on these. You may even find fully comprehensive cheaper than third-party policies.
Myth 3 – You can drive any car if you have a comprehensive policy
In the past, comprehensive policies used to have this feature as standard. But unfortunately, it’s not common anymore. You can’t just assume you can drive any car if you have this type of cover, as many policies don’t provide it.
Always check your documentation to ensure you’re covered. If you are, remember this is only via third party. So, if anything happens to the vehicle you’re driving, you’ll have to pay out.
Myth 4 – Paying monthly for insurance is a budget-friendly way to spread the cost
While it’s convenient to spread the cost of your insurance over 11 or 12 months, it will end up costing you more in most cases. This is due to the interest charged on insurance payments. When you look at the policy, it will give you an annual cost and a cost for monthly instalments.
Paying in full will save you money, but it isn’t always convenient. So, check out the savings first before automatically setting up a direct debit.
Myth 5 – Some car colours are more expensive to insure than others
There’s a big misconception that some car colours, particularly red and black vehicles, are more costly to insure.
However, studies carried out internationally don’t support this theory. While the car colour automatically appears when you enter your details (as the DVLA holds this information), insurance companies rarely ask for it in your application.
Myth 6 – Parking in a garage brings your policy premium down
This factor can play a part in your policy price. But it all depends on your postcode. Location bares a risk aspect of where you park a car, so it’s natural to think parking in a secure garage is better for your policy.
However, insurers also take into consideration that damage could be caused by moving in and out of the garage, which you might claim for.
Myth 7 – Your credit score doesn’t have any impact on an insurance policy
When you search for and secure car insurance, a record of this appears on your credit report. This is because if you enter into a credit agreement (paying monthly) for your insurance, the insurer will want to determine whether your financial history is adequate to pay the premium.
Myth 8 – Young people should get insurance under a parent’s name
This is a big no-no! Taking out an insurance policy in someone else’s name and adding a named driver, who will, in fact, be driving the vehicle most of the time, is called fronting, and it’s illegal.
Young people should have their own insurance policy, and they can add named drivers, such as parents, if they wish. This may give a slight discount on a policy. But, in the long term, it also helps build your no claims discount and driving history legally.
Myth 9 – No claims bonus protection stops your premium from increasing
Unfortunately, this isn’t true. While it protects your no claims, and you won’t lose them if you need to claim, there is still a chance your policy price may increase annually.
There are a number of factors that make up policy pricing, including inflation increases and general costs. Additionally, no claims protection can have particular limits. For example, if you make several claims within a set period, some insurers remove some of your bonus years.
Myth 10 – Car insurance is always cheaper on comparison websites
Again, this isn’t always true. While you may be able to get a good deal comparing several providers, there’s also a chance ringing direct will also offer a great price.
Another thing is some insurers aren’t on comparison websites. So as the adverts say, call direct to get some of the best prices.
Myth 11 – Insuring a lease car is more expensive
Whether you own a car outright or lease a vehicle, insurance policy prices are based on numerous factors outside of ownership status. The only difference is lease cars must have fully comprehensive cover. But that doesn’t mean there more expensive than any other vehicle.
You can also choose lease agreements with insurance, saving you time and the hassle of arranging it yourself. Contact our team to find out more about car leasing with insurance.
