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Car insurance calculator UK

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Every driver wants to find a cheap car insurance policy that doesn’t skimp on cover. But calculating car insurance premiums is a tricky business. 

Insurers consider a range of factors when working out how much to charge you for cover. They also use statistics from across the insurance industry and data from their own claims.

There are about 200 car insurance companies in the UK. Some target certain types of customers and price themselves out of the market for other demographics. This means the cheapest insurer for one driver might not be the cheapest for another.

Once you understand how car insurance works and premiums are calculated, you can take steps to find the best possible price for the level of cover you need.

A car insurance calculator is a comparison tool that allows you to get a general idea of how much cover will cost. You’ll need to input details about yourself and your car to get estimates of car insurance costs.

How a car insurance calculator works

Insurers consider several factors when calculating car insurance premiums. Some of these relate to you – such as your age and occupation – while others relate to your car and where you live. 

Insurers use actuarial risk tables based on years’ worth of data to understand the different risks for each group of people.

These statistics help them to work out how likely you are to make a car insurance claim and how much it will be. The higher the chance you’ll claim on your cover and the more expensive that claim is likely to be, the more you’ll pay for car insurance.

The following table summarises the factors that influence your car insurance premium and are explained in more detail below.

Factors that will make your car insurance premium go upFactors that will make your car insurance premium go down
YouthGetting older
Lack of driving experienceYears of driving experience
Past claimsBuilding a no claims bonus
Speeding and other motoring convictionsKeeping a clean licence
Having a high-risk jobHaving a low-risk job
Staying singleGetting married or cohabiting
Living in a high crime areaLiving in safe area
Parking your car on the street at nightParking securely
Owning a powerful or expensive carDriving a car in a low insurance group
Modifying your carAdding security devices to your car
Adding multiple optional extrasLimiting the add-ons you include
Reducing your voluntary excessIncreasing your voluntary excess
Paying monthlyPaying annually

Age and driving experience

New drivers of any age lack driving experience, making them less likely to spot hazards. But according to road safety charity Brake, younger drivers pose an even bigger risk for insurers due to the combination of youth and inexperience. 

According to the Association of British Insurers, drivers aged 17 to 24 are involved in 24 per cent of all fatal collisions, yet they only make up 7 per cent of UK licence holders. 

Their youth means young drivers are particularly likely to take risks such as dangerous overtaking or speeding. Their inexperience means they need to concentrate more when driving, which makes them more susceptible to distraction, such as from mobile phones. 

Brake’s statistics show that one in five drivers crash within a year of taking their test. While young men are more likely to have an accident than young women, car insurers are no longer allowed to consider gender when pricing policies. 

Occupation

When analysing claims data, insurers have seen that people with certain jobs make more claims than drivers in other occupations. 

Premier League footballers pay the highest car insurance costs. This could be because they tend to drive high performance cars, take risks and are usually under 25.

Other occupations where people are charged more for car insurance include journalists, fairground workers and food delivery drivers.

But secretaries, personal assistants, insurance workers, librarians and teachers tend to have the cheapest car insurance.

While you shouldn’t lie to your insurer about your occupation, sometimes tweaking your job title – from journalist to content writer, for example – can result in cheaper quotes. 

Your car

The car you drive has a big impact on your insurance. If your car were to get stolen or written off after an accident, your insurer would have to pay to replace it. The more this would cost, the higher your premium will be. 

Insurers also look at the cost of parts and repairs when calculating premiums – if your car has expensive parts, insurance will cost more.

Modifying your car will mean paying more for insurance, while installing a tracker or other security device will result in paying less.

All cars are categorised into insurance groups from one to 50 – the more powerful and expensive your car, the higher the insurance group, and the more you’ll pay. Cars such as the Fiat Panda, Ford Ka+ or Nissan Micra are in Group 1 and are the cheapest to insure. Cars such the BMW 2 Series Coupe and Audi RS 4 Avant are in Group 50 and the most expensive to insure. 

Where you live

Your postcode impacts your car insurance premium, as it’s assumed you’ll keep your car at your home and do most of your driving close to where you live.

Insurers will look at whether you live in an urban or rural area and the crime rates in your area to assess how likely it is that your car will be vandalised or stolen. According to vehicle tracking company AX Track, the highest number of cars are stolen in London and the West Midlands. So you’ll likely pay more for car insurance if you live in these areas.

Road accident statistics also help insurers predict how likely you are to be in an accident.

Insurance companies will also want to know where you keep your car during the day and at night – parking in a garage or secure car park will result in cheaper premiums than parking on the road.

Your driving history

Insurers look closely at your driving history when calculating your premium. If you’ve claimed on your insurance in the past, your premium will go up. An accident typically stays on your driving history for three to five years. The more the claim was for, the more it will impact your future premiums. 

Speeding convictions will also result in higher car insurance, while convictions for drink driving or using your mobile while driving will have an even bigger impact.

Relationship status

In general, married people and those cohabiting tend to get cheaper car insurance rates than single people.

That’s because industry statistics suggest that couples and families make fewer expensive claims than single people.

Your chosen policy

While all of the above helps decide what the insurance company charges you, how you design your policy also plays a big part in what you end up paying.

First of all, choosing between third party-only cover, third party, fire and theft, and fully comprehensive car insurance will dictate your price. And while you might think third party is more expensive than comprehensive, most of the time that isn’t the case.

The risk profile of someone who only opts for third party cover is higher than someone who chooses a comprehensive policy, meaning the former is normally more expensive than the latter. 

Other elements of your policy can also change the cost, including:

  • Optional extras: the more add-ons, such as breakdown cover or motor legal protection, you add, the more your premium will cost
  • Voluntary excess: the higher your voluntary excess, the cheaper your premium will be 
  • Payment schedule: if you pay monthly, you’ll have interest adding onto every payment. So you should pay annually if you can

Factors outside of your control

There are factors that will dictate the cost of your car insurance that are completely separate to your profile as a driver. These include:

  • Inflation: rising inflation pushes the cost of everything higher, including car insurance. This is because the price of materials, labour and energy – all relevant when making a claim – also go up
  • Other people’s claims: the more insurance companies have to pay out in claims, even if you’re not the one making the claim, the more everyone pays for cover
  • Fraudulent claims: the more fraudulent claims that are made in a year, the more car insurance will cost for everyone, as providers increase prices to recover their losses
  • Uninsured drivers: every time there’s a claim involving an uninsured driver, the cost of car insurance for everyone will tick that bit higher. In fact, the ABI estimates that four per cent of premiums cover costs related to uninsured drivers
  • Insurance premium tax (IPT): the IPT makes up 12 per cent of your car insurance premium
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There are so many factors that go into calculating your car insurance that quotes will vary wildly from person to person. 

 

However, it’s useful to know the averages, so you have a benchmark price to compare your quote against:

  • Average third party only cover: £972 
  • Average third party, fire and theft policy: £765 
  • Average fully comprehensive insurance: £651

Based on annual car insurance policies bought through MoneySuperMarket between October and December 2023

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How to save money on your car insurance

There are several things you can do to cut the cost of car insurance. 

Be organised

You’ll get the cheapest car insurance premiums if you buy your cover three or four weeks before the renewal date. Leaving it until the day before will result in the cost shooting up.

Add a named driver

If you’re a young or inexperienced driver, you can usually reduce your car insurance premium by adding an older, more experienced named driver, such as a parent or partner. 

Drive less

You’ll need to state your estimated annual mileage when you buy car insurance – this figure will be on your MOT certificate. Low mileage means fewer chances of an accident and, in turn, cheaper car insurance. You may even be eligible for a specialised low-mileage car insurance policy.

If you don’t drive much, a pay-as-you-go car insurance policy where you pay a set amount for each mile you drive could also reduce your costs.

Insure more than one car

Some insurers offer discounts if you insure more than one vehicle registered at the same address. Don’t assume these policies will be cheaper though – compare quotes for multi-car policies with single-car policies.

Keep a clean licence

Points on your driving licence for speeding, driving under the influence of alcohol or drugs or using your mobile while driving will result in paying more for insurance. 

Build a no claims bonus (NCB)

If you don’t make a claim on your car insurance policy, you can build a no-claims bonus each year. This can be transferred between insurers at renewal time, and once you have a few years’ NCB, there’s an option to pay to protect it so one small claim doesn’t set you back to zero. 

Get a black box

A black box or telematics insurance policy involves installing a device in your car that monitors your driving habits and sends this information to your insurer. If you drive safely, you’ll get cheaper cover.

Shop around for cover

Compare quotes from different insurers before buying a policy – they can vary by hundreds of pounds. It’s best to go fully comprehensive; this won’t necessarily cost more than third-party cover, but it’s much better.

Don’t auto-renew

Your insurer will send you a renewal quote about a month before your policy is due to end, but you don’t have to accept this quote. Some insurers also set up your policy so it auto-renews when it expires. While this might sound convenient, it could mean paying more than necessary.

Pay annually

Car insurance premiums are quoted as an annual figure, but you’ll have the option to pay monthly. Be aware that this can work out more expensive, as the insurer is effectively loaning you the full premium and you’ll be paying the sum back with interest.

Choose a cheap car

If you’re buying a new car, pick one in a low insurance group. Cars in Group 1 are a lot cheaper to insure than cars in Group 50.

Cut down on extras

Optional add-ons, such as a courtesy car, breakdown cover or legal expenses, will make your policy more expensive.

Increase your excess

The excess is the amount you’re required to pay in the event of a claim. You can pay an additional voluntary excess to get cheaper premiums – just make sure it’s not an unaffordable amount.

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Alternative ways to secure lower car insurance quotes

There are a few alternative ways you can get lower car insurance quotes.

Improve your credit score 

Having a poor credit history could mean you may pay more for car insurance. This is because insurers consider people with a bad credit history more likely to make car insurance claims. 

A low credit score could also mean paying a higher annual percentage rate if you choose to pay your car insurance monthly rather than annually. 

Get a freebie

Price comparison websites often offer vouchers or gifts when you buy car insurance. These deals change regularly, so it’s worth comparing what’s on offer. Another option is to get cashback from TopCashback or Quidco by using these sites to click through to the price comparison site – cashback sites get a commission if a click results in a sale, and they split this money with customers.

Become a better driver

There are a couple of advanced driving courses you can take to improve your driving skills. Pass Plus is endorsed by the DVSA, while the Advanced Driver Course is run by IAM RoadSmart. These will get you a discount with some insurers and lower the chance that you’ll make a claim and lose any NCB you’ve built up.

However, if the main aim of you taking one of these courses is to lower your premium, you should check that your chosen insurer accepts the course first.

Frequently asked questions about calculating car insurance in the UK

Calculating the cost of learner driver insurance can be tricky, as it will vary between insurance companies. Make sure you shop around for the best deal.

Yes, you can use a calculator for multiple cars, but it’s important to note that some insurers, such as Direct Line, offer a discount if you insure more than one car. Make sure you compare multi-car insurance with separate cover for each vehicle when you use a car insurance calculator.

If your car insurance thinks your car isn’t worth repairing after an accident, it might write it off and offer you a sum of money. If you don’t think the sum offered accurately reflects the value of your car, you can use a car insurance write-off calculator to work out whether you’d be better off scrapping your car instead.

emma lunn

Emma Lunn

Money Writer

Emma Lunn is a multi-award winning journalist who specialises in personal finance and consumer issues. 

With more than 18 years’ experience in personal finance, Emma has covered topics including mortgages, first-time buyers, leasehold, banking, debt, budgeting, broadband, energy, pensions and investments. 

Emma’s one of the most prolific freelance personal finance journalists with a back catalogue of work in newspapers such as The Guardian, The Independent, The Daily Telegraph, the Mail on Sunday, and the Mirror. 

As a freelancer she has also completed various in-house contracts at The Guardian, The Independent, Mortgage Solutions, Orange, and Moneywise. She also writes regularly for specialist magazines and websites such as Property Hub, Mortgage Strategy and YourMoney.com. 

She has a real passion for helping people learn about money – especially when many people are struggling to get by in today’s challenging economic climate – and prides herself on simplifying complex subjects.

Connor Campbell

Finance Writer

Connor Campbell is an experienced personal and business finance writer who has been producing online content for almost a decade. 

Connor is the personal finance expert for Independent Advisor, guiding readers through everything they need to know about car insurance and home insurance. From how much it costs to the best insurance providers in the UK, he’s here to help you find the right policy for your needs. 

In his capacity as writer and spokesperson at NerdWallet, Connor explored a number of topics close to his heart, such as the impact of our increasingly cashless society, and the hardships and heroics of British entrepreneurs. His commentary was featured in sites such as The Mirror, the Daily Express and Business Insider

At financial trading firm Spreadex, meanwhile, his market commentary was featured in outlets such as The Guardian, BBC, Reuters and the Evening Standard

Connor is a voracious reader with an MA in English, and is dedicated to making life’s financial decisions a little bit easier by doing away with jargon and needless complexity.

Molly Dyson

Editor

After growing up with a passion for writing, Molly studied journalism and creative writing at university in her home country of the United States.

She has written for a variety of print and online publications, from small town newspapers to international magazines. Most of her 10-year career since relocating to the UK has been spent in business journalism, writing and editing for admin professionals at PA Life magazine and business travel managers at Business Travel News Europe and representing those titles at conferences around the world.

Now an Editor at the Independent Advisor, Molly is an expert in a broad range of consumer topics, that include solar panels and renewables, home improvements and home insurance, and consumer technology such as home security and VPNs.

In her free time, Molly can usually be found exploring the outdoors with her husband and their young son or gardening.