Can You Get a Cheap Deal on Insurance When As Car Market Slowdown Reliefs?

Figures from the Society of Motor Manufacturers and Traders (SMMT) show that the decline in new car registrations in June was the smallest since July 2008 suggesting the scrappage scheme is assisting the market. So is now the time to get a cheap car insurance deal too?

Reports show that new car registrations in June fell by 15.7 per cent year on year, which is significantly less than the year-to-date demand fall average of 25.9 per cent. Much of this slowdown is attributed to the car scrappage scheme which is encouraging drivers of older vehicles to turn to new, more fuel efficient alternatives.

How does this affect car insurance?

The good news about the car scrappage scheme is that it could help drivers to lower their motor insurance premiums too.

Though older cars generally receive lower premiums – as they are less desirable to thieves – the scrappage scheme is leading many new car buyers to the purchase of smaller vehicles. Generally, vehicles with smaller engines, and therefore lower performance ratios, receive cheaper quotes because they are less likely to be driven at high speeds. Another advantage is that these cars generally have few modifications – high specification models and vehicles with letters after their name, such as GTI, are frowned on by insurers.

To find out how high your premiums are likely to be use the Thatcham database when shopping for a new car. This will allow you to see which insurance group the vehicle you are interested in fits into – these range from 1-20 with the lower groups receiving lower premiums.

If you buy a new car with a high value then it could be worth considering gap insurance which will bridge the difference between the value of a new car and the standard comprehensive policy pay-out until the vehicle’s value has depreciated.

How else can you get cheap car insurance on a new car?

With dealers more anxious to make sales it’s worth seeing if they are willing to offer insurance as a freebie with a new car. If that is possible then remember to check the policy to see how it compares with others on the market and to ensure your cover is sufficient.

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