Drunk Driving Will Cost You In Car Insurance Premiums

Drivers who drink during the holidays may find it more difficult to pay their car loans. If they are pulled over for drunk driving, they face a substantial increase in their car insurance premium.

With more of their income going toward insurance, it may be harder to afford the monthly car loan payment. Not only is this situation embarrassing, it can also lead to financial problems.

According to MoneySupermarket, a DR10 penalty on the driver license can increase auto insurance premiums from an average of £424 annually to a whopping £784.

Though this 85 percent increase seems quite painful, some convicted drivers may have it worse. The may be unable to obtain any car insurance in the future. This strengthens the argument for leaving the car at home when planning a night of alcohol consumption.

MoneySupermarket representative Peter Harrison noted that since alcohol affects everyone differently, it is best for those driving not to drink at all.

In no circumstances should driving under the influence of alcohol be an option, he said. Mr. Harrison encouraged vehicle owners to make alternate travel arrangements before going out for a rousing night of merrymaking, regardless of the time of year.

The legal blood alcohol limit is 35mg of alcohol per 100ml of breath and 80mg per 100ml of blood. However, DrinkAware echoed that drinking at all while driving is unwise.

Aside from the increased chance of receiving a citation and facing higher car insurance rates, intoxicated drivers pose harm to themselves and others on the road.

Drivers who find themselves facing increased car insurance premiums for any reason should shop around for coverage. With a drunk driving citation on their record, a person is not likely to be welcomed by many insurance carriers.

Other drivers may find themselves in a better situation, able to save some money on insurance coverage.

Failing To Shop Around For Car Insurance Can Cost You

When looking for a new vehicle, most people compare makes, models, and car finance offers. Brits should also be shopping for car insurance because failing to do so costs them tens of millions of pounds annually. Car insurance comparison shopping should not be a one-time thing, either- it should be done prior to each policy renewal date.

Sainsbury’s Finance discovered that inadequate auto insurance coverage costs UK motorists £73 million annually. Many policyholders discover too late that their policy does not cover things like lost keys and accident-related expenses. This costs them more out of pocket, putting a greater strain on household budgets.

Seven percent of the individuals surveyed reported having to cover expenses for child car seats or courtesy cars following an accident. Had they selected a car insurance policy that offered these items, they could have saved themselves the extra expense. Many of those polled said they simply selected the least expensive coverage without even shopping around to compare providers. Drivers also tend to stay with their existing carrier for years, even if another provider offers a better deal.

Sainsbury’s Car Insurance head Ben Tyte noted that comparing car insurance policies is important. All policies are not equivalent so drivers should look for one with adequate coverage. As one example of the differences, six in ten policies do not cover transportation costs following a car accident. This can leave drivers spending a lot of money to get around while their car is being repaired.

Mr. Tyte reported that shopping for car insurance based only on price can have “disastrous consequences.” He advised drivers to compare insurance policies to ensure that each offers equivalent coverage before reviewing the different prices. By shopping around for car insurance and car loans, UK drivers can leave more money in their bank accounts.

Brits Stay With Car Insurance Provider Despite Potential Savings Elsewhere

Moneysupermarket.com recently revealed that more than seven million drivers in the UK stay with their existing auto insurance provider when coverage renews. According to its research, one in ten British policyholders do not think another provider could give them a better deal. Each year, 2.6 million UK drivers automatically stay with their carrier without checking to see if savings are available elsewhere.

According to a report issued by Moneysupermarket.com, drivers can reduce car insurance expenses by an average of £333 if they change policies. As more consumers use car loans to finance their vehicle purchases and prices rise at the pump, one would think they would take advantage of this savings. Instead, some are seemingly too lazy or nonchalant to do it.

Pete Harrison from Moneysupermarket.com expressed his surprise that consumers facing budgetary restrictions are not taking steps to save money by locating the best car insurance deals. The cost of living is not expected to decline and some drivers are paying high interest rates on car loans because they only qualify for bad credit car finance. Therefore, reducing auto insurance premiums should be a priority.

Sainsbury’s Finance found that during the last 12 months, the number of drivers using their mobile phones while driving has declined. It is expected that this will result in fewer auto accidents, which should translate to a reduction in auto insurance premiums in the near future. Any additional ways to save money, such as by switching carriers, will only help the situation.

When the auto insurance renewal arrives, drivers should get online and make some phone calls before they get out their checkbooks. They may be able to save hundreds of pounds simply by changing insurance carriers. The extra cash will come in handy at the grocery store and fuel station as prices continue to increase.

UK Car Finance Benefits From Driver Unwillingness To Part With Cash

Two-thirds of drivers responding to a recent Moneysupermarket.com survey said that increasing auto insurance costs and record-breaking fuel prices will affect their next car purchase. Most of them said they would consider compromising on the vehicle they would normally purchase.

This deliberate move to reduce costs could make car finance more popular because it reduces the immediate financial impact.

Fifty-five percent of respondents said their next car will be more fuel-efficient. Over one-third will opt for an auto that features a lower road tax rate or is less expensive to insure. Hire purchase and personal contract purchase pcp could make the financial impact of car buying less severe.

However, this may not even be enough for the nearly one million UK motorists who plan to sell their vehicles and not purchase a new one.

Moneysupermarket.com auto insurance expert Pete Harrison stated that he was not surprised by the results of the recent survey. According to an analysis conducted by the company, vehicle insurance premiums experienced a 31 percent increase in 2010 and a similar price increase is occurring in 2011.

Combine this with rising fuel costs and many households are under severe pressure when it comes to spending.

Families throughout the UK are rethinking their vehicle needs, said Mr. Harrison. Purchasing a more efficient, lower priced car is one solution. He also recommended practices like avoiding short trips, driving more efficiently, and car-sharing.

Co-workers who live near each other can substantially reduce their vehicle fuel and maintenance expenses by sharing rides to work.

Mr. Harrison also explained how smart shopping can save consumers cash. Comparison shopping to find the best car insurance policy at the lowest rate is recommended over automatically accepting the renewal quote from the current insurer.

According to Mr. Harrison, this could save consumers approximately £319 per year.

Car Finance Declines Insurance Premiums Increase Due To Driving Distractions

UK car buyers are currently witnessing some excellent car finance deals. Inexpensive financing has enabled more UK motorists to purchase new vehicles. However, traveling the highways and byways has an increasing cost in the form of distracted drivers.

Those who eat, drink, or change radio stations while driving pose hazards to others on the road.

In addition to presenting a risk to others, these drivers face increases in car insurance premiums should they be caught driving distracted. Moneysupermarket.com reported that receiving a “driving without due care and attention” conviction leads to an up to 27 percent increase in car insurance premiums.

Nearly 16,500 UK motorists are found guilty of this offense each year.

This conviction carries with it three points on the driver license and a £60 fine. In addition, car insurance premiums typically increase by over £200, creating £3.3 million of additional annual insurance premiums for carriers.

This is quite a high price to pay for eating a burger and fries while zooming down the highway or through city streets. To avoid these potential consequences, drivers should think twice before they distract themselves from the road.

The research conducted by Moneysupermarket.com also revealed that 15 percent of drivers polled said they ignored basic safety practices like wearing their seatbelt while driving.

This leaves these individuals more susceptible to injury from a distracted driver. Moneysupermarket.com car insurance guru Peter Harrison said that a failure to take safety precautions like wearing seatbelts is concerning.

Mr. Harrison commented that with UK roads becoming more congested, total concentration is required when driving. Even removing eyes from the road for a few seconds to eat a snack or make a mobile phone call can have serious, sometimes fatal, consequences.

Paying attention while driving can save on car insurance premiums but it can also save lives.

Newly Released Car Protection Plans Are A Huge Improvement

A vehicle breakdown is the last thing a car owner wants. Costly repairs are also not desirable, as the cost for car loans is high enough. Until now, vehicle protection plans in the UK were viewed as substandard programs pushed on car buyers.

With the release of two new products, ACF Car Finance and RAC Warranty have put an end to this.

The new Guaranteed Asset Protection (GAP) and breakdown and maintenance warranty provide drivers with comprehensive protection. Neither coverage will run out when a road claim is submitted. Vehicles up to ten years in age and with up to 100,000 may be covered by the breakdown and maintenance warranty.

The price of £175 for each plan is very competitive, said ACF.

Cost to replace nearly any failed electrical or mechanical component in the vehicle is covered by the warranty. This coverage extends to turbochargers and air conditioning, when applicable. Under the GAP coverage, if the vehicle is written off, the consumer receives payment for the difference between the amount covered by car insurance and the settlement figure issued by the finance provider.

An added bonus of this GAP coverage is protection for add-ons bought when the car was purchased. Examples are a paint protection system and even the vehicle warranty. Richard Cox, motor operations head at ACF parent The Funding Corporation, said that his organization examined the shortfalls often pointed out by customers and, together with RAC, worked to address these issues.

With such a low price, it goes without saying that dealer staff will not receive big incentives to sell these plans. The initial cost serves as full payment for the plans and this coverage is not bundled into the cost of car loans.

Car buyers can now receive more comprehensive protection designed to provide peace of mind over the long term, without overpaying.

3 In 4 UK Motorists Have Inadequate Car Insurance

ALA, an independent insurance broker, recently learned that over three quarters of motorists in Britain do not have adequate auto insurance coverage for theft or accidents. Either of these situations are nightmares in themselves.

When insurance coverage is insufficient, the event reaches another level of bad. However, there is an easy way to correct the problem.

In its Mind the Gap survey, the ALA found that 77 percent of UK motorists are not protected against the shortfall between the invoice price, outstanding car finance, or replacement cost of the vehicle and its market value.

Guaranteed Asset Protection, or GAP, insurance can be used to cover the difference. It provides complete coverage for the full value of the vehicle should a loss occur.

The survey of 2,055 adults in Britain revealed that car loans were held by ten percent and eleven percent of vehicle owners used hire purchase. Both of these groups risk costly repayments if their cars are wrecked or stolen.

According to the study, 25 to 34 year olds have the highest level of risk. Fourteen percent used car finance to purchase their current car and 16 percent took out personal or car loans.

Ten percent of those surveyed said their car was written off due to accident, and six percent had their car stolen, within the past year. This illustrates the large segment of the market that is exposed to expensive repayments without GAP insurance.

Automobiles quickly depreciate in value and insurance excesses are rising. This may cause claim costs to become even higher.

Though GAP insurance provides financial relief, consumers should not purchase the first plan they find. Shopping around for coverage is recommended and purchasing from an independent broker may be less expensive than dealer-provided coverage.

Consumers should make haste to protect themselves because an accident or theft usually comes without warning.

UK Car Insurance Increases Predicted To Continue

These days, low car finance costs seem to be the only good thing about owning an automobile. Fuel and repairs are more expensive and car owners will soon feel an additional pinch for their auto insurance.

In 2010, car insurance companies experienced huge losses. They are now trying to recoup this money and are using car owners as their source of income.

Auditing and accounting firm Deloitte analyzed the British auto insurance market. In 2010, premiums increased by approximately 10 percent. However, this did not seem to help, as insurance firms still lost over £2 billion.

Claims were unexpectedly high last year. No-win-no-fee claims regarding personal injury were mainly to blame.

The insurance industry is now trying to recover its losses, imposing higher premiums on vehicle owners. The AA predicts that premiums might increase by as much as 30 percent.

Between this and the rising cost of fueling a car, some people may find vehicle ownership unaffordable, even if they do have low-rate car loans. Those who have low claims records can rest a bit easier because their premiums are usually lower.

According to Deloitte, for every 100p earned in premiums in 2010, insurance companies paid out 120p, costs included. To remain operational, some of them were forced to tap into their reserves rather substantially.

They could not continue to do this and needed to come up with another way to get the money. Car owners seemed the most logical party to provide assistance.

We can only predict what the overall effect on our auto insurance premiums will be. What we do know is that it is not likely to be positive, based on the Deloitte report.

Thank goodness for cheap car finance deals because otherwise, we may already be turning in our vehicles and taking public transportation to work.

Basic Car Insurance Can Be More Expensive Than Comprehensive Coverage

Which? Money recently found that basic third party, theft, and fire auto insurance policies may be only slightly cheaper or even more expensive than comprehensive coverage. The company used two demographic scenarios on two auto insurance price comparison sites to reach its conclusion.

In one case, the least expensive comprehensive policy was only £3 more than a third party, theft, and fire policy from the same insurer.

Comprehensive policies include a greater level of coverage such as a courtesy car. It is surprising that some cost only a bit more than a basic policy. What is more amazing is that basic policies that cover third party only can be much more expensive than comprehensive policies.

For example, one site provided a third party quote of £349 with no excess, while the comprehensive coverage was just £247 with a £100 excess.

One comparison site revealed that quotes from one carrier were the same for third party, theft, and fire, comprehensive, and third party only. In various scenarios, comprehensive policy quotes were a bit less expensive than third party, theft, and fire.

The results depended on the vehicle, however. A comprehensive quote for the Audi A6 was more expensive than third party, theft, and fire.

An Association of British Insurers spokesperson said the reason third party, theft, and fire premiums are often higher than comprehensive premiums is because younger drivers tend to choose the first type of policy. These drivers make larger claims.

For an individual driver with more experience, third party coverage should be cheaper.

Whether they take out car loans or pay cash, those who recently purchased a car should compare price quotes for comprehensive and third party, theft, and fire policies. Depending on the vehicle and driver age, comprehensive may be a better deal.

In addition to a possible lower price tag, this policy includes more coverage.

Sainsbury And RBS Insurance Discussing Insurance Joint Venture

The finance arm of J Sainsbury PLC and RBS Insurance, a division of Royal Bank of Scotland Group PLC, are discussing a multi-year partnership for RBS to issue car insurance using the Sainsbury brand. This five-year joint venture will include claims management, underwriting, and support for sales and service on every new car insurance policy issued under the Sainsbury brand beginning this summer.

RBS Insurance (RBSI) Chief Executive Paul Geddes stated that strength in distribution channels and a proposition for a loyalty card drew RBS to Sainsbury’s Finance. RBS is currently the largest UK auto insurer, with proven results working with different brands and commercial sectors.

Its existing partners include National Westminster Bank PLC, Prudential PLC, and Nationwide Building Society.

Sainsbury is the second largest supermarket chain in the UK. Esure is currently the auto insurance provider for the company. The new deal will replace the ten-year agreement that Sainsbury currently has with Lloyds Banking Group.

Sainsbury Finance CEO David Fisher stated that RBSI brings a wealth of experience, technical expertise, and a strong platform from an operational perspective.

RBSI has reported that heads of agreement have been signed and the parties are working to agree on final contract terms. Though no official word on the value of the deal has been released, it is estimated to be several million pounds.

Billions in government state assistance were provided to RBS during the recent financial crisis. Under EU requirements, RBS must sell RBSI by December 2013.

The two companies are optimistic about the proposed deal. Both companies have ambitious growth plans, reported Mr. Fisher. Together, they plan to offer the same high quality service to customers that they currently provide individually.

Whether individuals in the UK take out car loans or pay cash for their new vehicles this summer, they will have the option to obtain insurance from this new provider.