Are you overpaying for car insurance? If you are paying more than €568 a year to insure your car, you may well be.

That was the cost of the average premium in 2023, a rise of two per cent on the previous year, according to the Central Bank of Ireland’s Private Motor Insurance report published in October.

Motor insurance costs have continued to rise since then. There were ten consecutive months of premium rises from June 2023 to the end of June 2024, according to Central Statistics Office figures.

If your policy was the average €568 in 2023, increased by 8.3 per cent at renewal last year and does so by another 8.3 per cent this year, the cost will have risen by almost €100 to €666.

You can just roll over and accept the steady creep of increases, or take action to save money.

Shop around

One of the surest ways to pay more than you need to is to automatically renew your policy with your existing insurer. Yes, it’s tempting to just rollover, but this will almost certainly leave you out of pocket. Put half an hour into shopping around and you could save about €100.

When you get your renewal policy documents and quote from your existing insurer, about a month before your policy expires, the first thing to do is to ask them for a discount.

Keep the documents and the quote to hand and then use a comparison website like Bonkers.ie, Switcher.ie, Chill.ie, or pick up the phone to two other providers, to compare quotes.

The Competition and Consumer Protection Commission (CCPC) provides a handy ‘shopping around’ checklist to help you compare car insurance quotes.

You’ll need some information to hand. The first is, do you have penalty points. These can increase your premium and you’ll be asked if you or another driver of the vehicle has any and when they expire. You can request a statement of your penalty points on Ndls.ie, using your PPS number.

You’ll need to provide the details of any claims in the past five years too – you’ll find this in your current policy documents.

If you are shopping around by phone, ask if it’s cheaper for you to complete the transaction online. Many insurers provide an online discount.

Check your mileage

Are you driving less than you used to? This can lower your premium. If you or those who use the car now work from home and don’t commute as much, revise down your mileage figure and let your insurer know.

The average distance driven in Ireland is around 17,000km, but many people do far less. Check with your insurer if this could lower your premium, says the AA.

Have you moved?

If you’ve moved, perhaps out of the city, or to a home with its own drive or garage, this can reduce your premium. It’s certainly worth mentioning at renewal time.

Check your excess

When comparing quotes, check the excess. That’s the amount you agree to pay towards a claim. For example, if there’s an accident and you submit a claim for €4,000 and your policy excess is €200, you’ll pay the first €200 and the insurance company will pay €3,800.

Agreeing to a higher excess could mean a cheaper quote, says the AA but if there is an accident it means you will make a bigger contribution to the cost.

The excess is often set at a default €250 to €300, be sure to check this in order to fairly compare quotes.

Ensure that the excess you set is affordable in case of a mishap. It means that you take a little more risk in the event of a claim, but if you’re careful then it may be worth the payback.

What’s the value of your car?

Ensure you cover your vehicle for the correct amount, as this will affect the cost of your annual premium. If you over or undervalue your car, this could cause issues if you need to make a claim.

If your car is over ten years old, you could decide to downgrade your policy, reduce the cover level to third party fire and theft.

Get a smaller car

Usually the bigger your car, the bigger the engine and the higher the cost of insurance. Do you really need a tank to get to work or do the school run? Choosing a car with a smaller engine will reduce the cost of insurance.

Always check with an insurance company or broker to see what the premium would be before buying a car, or if you are changing cars during the policy, says the CCPC.

Left-hand drive, convertible and modified cars are usually more expensive to insure.

Named drivers

Thinking of adding a housemate, your children or grandchildren to your car insurance? This can increase your premium because of their age, for example if you add a younger family member.

In other cases, it can reduce your premium, for example if the named driver has a good driving and claims history, says the CCPC.

Multi-product discount?

Some insurance companies offer a discount if your household has more than one insurance product with them. With RedClick for example, you’ll get 10 per cent off your car insurance if your spouse, partner or cohabitant has policies with the company. Axa offers multi-product discounts too. Just remember to shop around again next year – switching to a new provider for both policies will likely get you a fresh discount.

Pay annually

Yes, paying for something in monthly instalments can ease the blow, but you are likely to pay more for your insurance this way. If you can afford to pay the yearly amount upfront, do it, even if that means dipping into your savings.

If you do pay a higher premium by paying in instalments, start to put a little bit of money away each month now so that next year you can pay in full, says Mabs.

Drop to one car

If your household has two cars and one is mostly sitting in the drive, dropping to one car will save you thousands.

Typically in a two-car household both members have “main driver” status on their respective policies with individual no claims bonus records. You probably have “named driver” cover on each other’s policies too.

You might think you need to keep two cars with main driver insurance policies going in order to maintain your no claims bonus – you don’t. You can be a named driver only and keep your no-claims bonus, provided you swap main driver status with your partner or spouse every two years.

When you finish your two-year stint as the main driver, be sure to ask your insurance provider for written proof of your no claims record. Keep this on file.

If you need to borrow your brother’s car now and then to plug a gap, there’s a solution for that too. Policyholders over the age of 25 can add third party cover as an extension of their policy which allows them to drive other cars besides their own,“. This can cost as little as €4.

Just drive safely

Clocking up penalty points, getting into scrapes and drink driving is the surest way to drive up the cost of your insurance. If you have a history of safe driving with no claims, you may be eligible for a no-claims bonus. A no claims bonus can significantly reduce your insurance premiums.

You can contact us at OnTheMoney@irishtimes.com with personal finance questions you would like to see us address. If you missed last week’s newsletter, you can read it here.