What is car insurance covering?

There are three types of car insurance with different amounts of cover:

Third party only: The most basic, but not necessarily the cheapest. This only covers injury and damage to other people and their vehicles or property. You, your car and property are not protected.

Third party, fire and theft: This covers your car and property if it is stolen or damaged due to fire, as well as injuries and damage to other people and their property. It doesn’t include injury to you or accidental damage to your car or property.

Comprehensive: This offers the most cover, protecting against fire and theft, plus damage and injury to both you and any third party. It also covers windscreen replacement and repair.

How much does car insurance cost?

Car insurance costs hundreds of pounds each year, but it depends a lot on the age of a car, model, area the car is kept, plus the driver’s previous experience, claims and penalties. 

While every scenario is different, we compared policies from the 110 car insurance providers used by our partners at QuoteZone to find ballpark figures for common vehicles. 

The most popular used car for 2022 was the Ford Fiesta, according to the Society of Motor Manufacturers and Traders, so we based our cost calculations on this model. 

We looked at the cost of insurance for a 2018 Ford Fiesta with a 1.5litre engine worth £10,000.

In our test we used a driver aged 40 with no driving convictions, who parks their vehicle on a private driveway in Essex and drives 10,000 miles a year. The policy had a £500 excess with five years of no claims. The car is parked in the driveway during the day and is used for socialising and commuting. 

The cheapest comprehensive deal we found was with Admiral for £571.23 for the year. The below prices are for policies paid in one lump sum annually.

Comprehensive: £571.23

Third party, fire and theft: £532.86

Third party only: £558.44

How do you get cheap car insurance?

The first and easiest way to get cheap car insurance is to compare prices using a search tool. We work with QuoteZone to search 110 car insurance providers which is free and uses just one simple form. You can then tweak the search terms to see if you could get a better deal with different requirements. 

Another very simple way to get cheap car insurance without having to sacrifice anything on your policy is to pay annually rather than monthly. In our test we found paying monthly for a policy on a Ford Fiesta added almost £100 to the price, with slightly worse benefits, such as a higher excess. 

Increasing the excess – the amount you pay before an insurer funds a claim - does not make much difference on the cost of the cover, with only £3 knocked off the comprehensive policy for the Ford Fiesta when we bumped our excess up from £500 to £1,000. Many providers offer zero excess on their policies to tempt customers to choose them. 

Selecting a less detailed policy also does not affect the price that much. In fact, third party, while providing the least protection, is actually more expensive than third party, fire and theft, and in some cases more expensive than comprehensive. This is because insurers see younger, more accident-prone or reckless drivers choosing third party, but find there are more claims made on these policies. Insurers would rather reward careful drivers who probably don't cost them as much in claims.

If you have access to more than one vehicle, insurers sometimes offer a discount (we found a policy about £20 cheaper in our test when we said we owned or used another car).

How do I know my car is taxed and insured?

If you’re not sure if your car is taxed and insured there are a few ways to check. Firstly, check your car tax status on the Government’s website where you’ll be asked to type in your registration. Once completed, you’ll find out if your car is taxed and has an up-to-date MOT, plus when they both expire. You can read some other details about your vehicle, such as its cylinder capacity, carbon emissions and wheelplan which can be handy to know if buying a car.

There’s also a handy guide to explain the tax rates, so you can work out how much you’ll have to pay when it comes to renewing your tax, but for this you’ll also need the 11-digit reference number inside your vehicle log book, which is known as a V5C.

If you need to check whether you have car insurance, enter your car registration into the AskMID website and it will tell you whether the vehicle is insured. You can do this for any vehicle registration even if it is not yours. However, it does not show who the vehicle is insured with. If you’ve forgotten who your car insurance is with and need to find out, first check your emails for any confirmation from when you signed up. You can also look back over bank statements to see if money has gone to an insurance company and when – which will indicate when your policy runs out.