With car insurance premiums continuing to rise, peaking at an average of £574 at the end of 2017, owning a car is increasingly costly for Brits. What’s more, data released today by MoneySuperMarket reveals that drivers at every different life stage could be making costly mistakes by listing their employment status inaccurately on car insurance quotes – meaning in some cases they’re paying nearly £700 more for cover than they need to.
The UK’s leading price comparison website uncovered differences when looking at identical car insurance quotes based on the cheapest annual price during January 2018, where the only adjustment is occupation, and compared the price before and after the change.
Many students prefer not to take on part time jobs during their degree in order to focus on their studies, but don’t reflect this accurately on insurance quotes. By listing themselves as ‘unemployed’, instead of the more accurate ‘student’, they can add 51 per cent to their premium, which works out at £677 more.
It’s a similar situation with older people who have given up work. Retirees who categorise themselves as ‘unemployed’ instead of ‘retired’ may have to cough up an additional 37 per cent for their car insurance. In addition, hard-working stay-at-home parents who make a similar mistake by clicking on ‘unemployed’ instead of the more precise ‘housewife’ option, will see their insurance costs rise by over a quarter (26 per cent).
The results also showed that those categorising themselves as a ‘housewife’, ‘instead of ‘retired’, added six per cent to their premium, while calling yourself a ‘student’ instead of an ‘apprentice’ could save 13 per cent, equivalent to £181.71.
Professions that change the cost of car insurance premium*
| Employment status | Average cost | Alternative employment status | Change to premium | Average £ difference |
|---|---|---|---|---|
| Student | £1,327.87 | Unemployed | 51% | + £677.21 |
| Mature Student – Living At Home | £1,308.72 | Unemployed | 39% | + £510.40 |
| Retired | £265.66 | Unemployed | 37% | + £98.29 |
| Housewife | £563.04 | Unemployed | 26% | + £146.39 |
| Student | £1,327.87 | Mature Student – Living At Home | 7% | + £92.95 |
| Retired | £265.66 | Housewife | 6% | + £15.94 |
| Undergraduate Student – Living At Home | £1,244.43 | Student | 2% | + £24.89 |
| Apprentice | £1,397.79 | Student | – 13% | – £181.71 |
| Housewife | £563.04 | Retired | – 7% | – £39.41 |
| Student | £1,327.87 | Student – Living Away | – 3% | – £39.84 |
Kevin Pratt, consumer affairs expert at MoneySuperMarket, commented: “People think it takes ages to organise car insurance cover, which isn’t true. Going through the car insurance journey on a comparison website only takes a few minutes, but it’s not a job that should be done too hastily. To get the best cover at the best price, you have to choose the most accurate answer at every stage of the quotation journey. And that can mean trying alternatives to find the one that best matches your situation, instead of plumping for whatever seems most obvious.
“It’s worth taking your time and exploring your options at each stage of the online journey. For example, if you describe yourself as ‘unemployed’ when in fact you’re a student, you’re retired or you stay at home to look after the home and family, you could end up paying up to 50 per cent more for your cover than you need to.
“Regardless of occupation or status, drivers should avoid settling for the renewal quote they receive from their existing insurer, because firms tend to reserve their best prices for new customers. Shopping around at renewal is the easiest and most effective way of reducing your premiums, with significant savings available.”
MoneySuperMarket’s Insurance Price Index lets drivers see how much car insurance costs in the UK, based on over six years of data and millions of customer quotes.