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Four Simple Steps to a Cheaper Car Insurance Premium. How Low can you Go?

October 26th, 2010

Figures published by the AA have shown a massive 40% rise in car insurance premiums, with young drivers baring the brunt of this increase. Why is this and what can you do about it?

The AA started compiling an index on car insurance rates 16 years ago. 2010 see’s the sharpest rises in its history. So what or who are to blame?

A number of factors have contributed to this hike in premiums. A surge in claims for injuries sustained in accidents, personal injury lawyers taking a 40% cut in those claims, un-insured drivers and probably the biggest contributor to these hikes, car insurance fraud.

The Insurance Fraud Bureau (IFB) estimates around 30,000 accidents are staged each year, with the average claim totalling around £17,000. It cost insurers about £350million in 2009, adding £44 to the premium of every driver in the country.

Young male drivers, between the ages of 17 – 22 are paying the most, with the average of the three cheapest quotes they get being £2,457. That is nearly double the premiums offered to young women. In the insurers eyes, the reason for this is simple, young men are twice as likely to be involved in car accidents than young women.

Annual Premium for less than one pound?

Yes it is possible. According to, the cheapest car insurance premium paid for a full year fully comprehensive insurance policy is just 96p! That’s right, less than a pound, and these four simple steps will show you how to challenge that record.

Step 1 – Lower your Risk

Every application for car insurance is different. Each insurer’s price depend on two things, first the underwriters assessment of your particular risk focus and then the pricing model which dictates what type of customers the insurer wants to attract.

Park and drive carefully

Leave your car in a garage or driveway; this can result in a 3% – 7% drop in insurance costs. Also, points on your license can bump up your premium, so don’t speed or use your mobile phone whilst driving.

Add a second person to an under-25s / high risk drivers insurance

Add a second driver with a good record to the insurance, even if they won’t use the car often, it can smooth out the average risk and sometimes reduce the premium.

Pick a car

The combination of car, engine size and value all impact car insurance cost. It’s worth considering this when you buy; a big super-powerful sports car for a 17 year old would cost enough to make David Beckham’s eyes water.

Fit a security device

Any extra security will help, fitting an alarm or immobilizer will reduce the bill substantially.

Don’t modify your car

The more changes you make to your car, barring security ones, the more you’ll be charged. A modification is anything that is not part of the standard vehicle specification including factory fitted optional extras, such as alloy wheels.

Reduce your mileage

The less you drive, the cheaper your insurance will be. Where possible try and reduce your mileage.

Step 2 – Best Buy Comparison Sites

Comparison sites use the information you enter to get quotes from hundreds of insurers. In fact, just combining the top three comparison sites,, and, will find you over 153 quotes from different providers.

However, two competitive insurers refuse to be included by any comparison site, and sometimes have special offers, so are worth checking separately. These are Direct Line and Aviva.

Once you have found the cheapest quote, double check them. Click through to the provider’s website as some comparison sites make assumptions, so double check the policy and what it includes. Do you need ‘free car hire’? If not, remove this to reduce the premium. Play around with some of the details to see if you can get it cheaper. For example, increase the excess amount, is fully comprehensive cover cheaper?

Step 3 – Grab hidden Cashback and Haggle

At this stage you will now know who the cheapest provider for you is, yet you may be able to reduce the cost even further. and are the top two cash back sites around offering up to £120 cash back for some providers.

So if the second and third cheapest quotes, offer a higher cashback amount then overall, they could be cheaper for you. These sites get paid by the providers and in turn they then give you some of this cash which means you get the same product, but a cut of its revenue.

Yet be warned, until it’s in your bank account, this cashback is never 100% guaranteed, and getting the right policy is always paramount. Therefore never simply choose based only on cashback, see it as a potential added bonus once you’ve picked the right cover.

Some comparison sites and providers offer their own cashback deals or offers such as a free MOT or vouchers. So factor these into your calculations.

And finally, haggle. The car insurance market is very competitive and companies are desperate to retain your business. Therefore once you’ve got your overall cheapest price get on the phone and try to haggle. The first port of call should be your existing insurer, after all if it can beat or even match the best quote it saves the hassle of switching policy.

Step 4 – Remember next Year

To avoid being forced to decide quickly, diarise a warning six weeks before your renewal date, so there’s plenty of time to sort out a new provider.

Renewal notifications are sent as near to renewal as possible as then you’re pressured for time and less likely to try and find a cheaper price. Apply for cover from your existing insurer as a new customer and it’s likely you’ll be given a cheaper price. Loyalty never pays so never just accept the renewal price. Motorists can typically save £233 a year by scouring the market for a better deal

You could also sign up to, a consumer research company. They pay hundreds of people a month near their renewal date, up to £50 to carry out comparisons. What is even better is that you do not need to buy insurance from any of the companies you’ve contacted.

So there you have it, four simple steps to a cheaper car insurance premium. By spending an hour or two of your time searching for a cheap car insurance premium, you could save hundreds of pounds a year. How low can you go?  Can you beat 96p for an annual premium, or even go one better —  and actually get paid money to renew your car insurance?!?


Don’t Give Up On The FHA Just Yet

July 27th, 2010

This is a guest post by David Ruiz from

The much-talked-about $8,000 homebuyer credit is coming to an end, but that doesn’t mean the government is no longer supporting first-time homebuyers or potential owners and borrowers. The federal Housing Administration (FHA) enables thousands of prospective homebuyers to access loans that they wouldn’t otherwise qualify for. As a result of the recent economic downturn, FHA loans now make up nearly a third of all mortgage loans in the United States.

Initially, this may sound like more of the same irrationality that got us
into our current financial crisis-unqualified buyers buying homes that they
can’t afford with loans that they can’t pay off. Admittedly, there are some
risks and controversies surrounding the FHA.

It’s true that FHA loans require minimal down payments, and it’s true that
loans with minimal down payments are harder to pay off and easier to default on. It’s true that individuals with poor credit scores often turn to the FHA to finance their homes because conventional loans are unavailable to
them. It’s also true that the FHA has picked up where the now-defunct
subprime market left off by providing loans to many of the highest-risk
borrowers in the nation.

But that’s kind of the point. Originally, the FHA was intended to be a back
door into homeownership for individuals who otherwise wouldn’t have made it onto the playing field due to economic strife. This is the kind of social development that our government and our taxes are intended to support. And in the end, the FHA isn’t actually lending money at all. The FHA insures loans made by conventional mortgage brokers to qualified candidates. This sets the FHA up as a safety net for lenders in case things go awry. Under the FHA, the exchange of money back and forth is still happening primarily in the private sector.

When you compare mortgage rates you will find the they currently at record lows right now, but many potential buyers with steady incomes and the ability to pay for homes are being turned away by lenders out of reactionary fear. Banks don’t want to take risks because the nation is in crisis. But allowing more potential borrowers access to mortgages will help kick-start
the flow of money in the housing industry again, and this may ultimately set
the foundation for continued growth and recovery. The FHA helped get the
United States out of the Great Depression. It’s reasonable to conclude that
a similar strategy may be successful in our current financial situation.


Text Donations for Haiti: 90-Day Wait?

January 14th, 2010

In the wake of the Haitian earthquake disaster, let’s interrupt my current series to focus on how we can help.

Flexo, a blogger for Consumerism Commentary wrote a great article with good advice on how and where to contribute safely to the Haiti Disaster.  In his article, he cites NPR’s report that donations via text message that charge your phone bill may take as long as 90 days to be received by the Red Cross!

Responsible Giving

To avoid scams and prevent delays in your donations, give directly to a charity’s website, and give only to established charities whose values align with yours.  A quick 5 or 10 minute Internet search is well worth it.

If you’re looking for a place to donate, here’s a few reputable charities that are heavily involved in Haiti that I recommend:

Food For The Poor – this is where I contributed.  A great organization that has been in Haiti for years.

Samaritan’s Purse – recommended by Jon Acuff from Stuff Christians Like.

The Haitian-American Friendship Foundation

Two orphanages already operating in Haiti (via Hugh Hewitt website):

God’s Littlest Angels

Mercy & Sharing

Feel free to post other reputable charities in the comments below.

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There’s An App For That: The Grocery Game

January 12th, 2010

Not but a few years ago, my wife and I would routinely eat out every meal – and I mean EVERY meal. We justified it with long work hours and longer commutes. Who wants to get home at 8 or 9pm and then make dinner, right?

An Eye Opener

We finally pulled our heads out of the sand (and other various places) and realized that 2 sit-down meals/day x 30 days/month = in the ballpark of $1,500 PER MONTH!! We were getting fatter and poorer at the same time.

FOOD – The Ultimate Budget Buster

It sounds funny, but while we graduated from grad school with the Mt. Everest of all debt, it was recognizing our astronomical food costs that finally triggered a need to trim our budget. Why? Probably because the student loans can’t be changed – we just assumed we’d make payments on them for the next 30 years just like our mortgage – it was not going to change. However, food is a cost that was out of control, but can be changed with some effort.

There’s An App For That!
The Grocery Game

We still struggle with eating out too much, but the one application that’s helped us eat more homemade meals is The Grocery Game.

The Grocery Game’s premise is simple. Each week, you buy a Sunday paper and clip coupons from ads such as the SmartSource and Red Plum, and file them away. The Grocery Game has access to pre-release weekly specials from most major grocery and drug stores. They match up weekly specials with the coupons you have on file. So not only is the product on special, you also maximize savings by adding a coupon on top of it, which many times is doubled or tripled, which magnifies the savings!

The weekly list is color coded: black means buy if you need it (only a decent savings); blue means significant deal (stock up while it’s cheap!); and green means with the sale price + coupon, that item is FREE!

What’s The Big Idea?

The idea behind The Grocery Game is that you stock up on items when they are at rock-bottom prices, so you don’t have to buy them later at regular price. For instance, we have deoderant we bought for $0.25, and several months worth of cereal and we never paid over $1.00/box. Other items like meat, toilet paper, and air fresheners were all purchased at well over 50% off. All products are major brand labels.


The cons of using The Grocery Game all are based on the sacrificing of convenience. When you eat out, you don’t have to plan a meal, or keep an inventory of food at home. It is time consuming to clip coupons and establish a filing pattern. You also spend more early on while you are building your inventory. Most of the cons relate to establishing a system, and with anything, it gets easier the longer you do it.


Since you’re trying to break your excessive restaurant habit, ANY new system will have kinks to work out. Even The Grocery Game’s own website admits it takes a few months to work through a coupon cycle and build your inventory. The savings are obvious, substantial, and forces us to eat at home more because of the sunk cost of groceries in the fridge. We also love the “thrill of the hunt” to find the best deals, and in a twisted way, provides us an activity to do each week together that saves us money, when otherwise we’d be out on the town spending money.


The Grocery Game charges every 8 weeks based on how many stores you want lists from. Weekly lists from one store costs $10 every 8 weeks. Additional store lists are $5 per 8 weeks. They carry most major grocery stores and drug stores, so for example, access to 8 weekly lists for Kroger grocery store & CVS drug store would be $15 – that’s less than $2/week!

Personal Account

Later this week I’ll post an interview with Julie, a neighbor of mine who is completely entrenched, and winning, at The Grocery Game.

Have you tried clipping coupons or playing The Grocery Game? Is FOOD the ultimate budget buster? Let me know how food fits into your budget – leave comments below!

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Budget, Uncategorized ,

#042 — Dave Ramsey’s Town Hall For Hope

April 10th, 2009

Are You Choosing To Participate In This Recession?

Let’s face it – the bad economic times are real.  We are in a deep recession.  Unemployment is high, construction is at a stand-still, and the stock market is in major correction.

But have we deepened our misery with an attitude of “doom & gloom”?  Are we in a self-fulfilling prophecy, where it has in fact become a more harmful economic environment because we are living in fear of how bad it can get?  While some of us may not have much say in a lay-off or a salary freeze, we do control our attitudes and whether we live our lives out of a spirit of fear, or from a spirit of empowerment and hope.

Town Hall For Hope

Dave Ramsey, a best-selling author and nationally-syndicated radio host, is a personal finance guru and America’s chief proponent of a debt-free lifestyle.  Dave will be hosting a Town Hall For Hope on April 23, 2009, at 8pm EST.  Over 5,000 churches and other organizations have signed up to host the event, which will be broadcast via a live private feed to each location, as well as through select radio markets and on the Fox Business Network, where Dave also hosts a daily television show.

In the 90 minute broadcast, Dave will spend 30 minutes speaking directly to our current economic climate, where true “hope” comes from (hint: it doesn’t come from Washington, DC!), and what real “change” must happen to put you & your family on the road to financial fitness.

The remaining 60 minutes will be split into two 30-minute Q&A sessions.  Questions will be taken not only from the live audience in Oklahoma City, but Dave is also going “Web 2.0″ by integrating and taking questions from these social networking sites:

Find A Host In Your Area

I’m hoping to find Dave’s message and this Town Hall For Hope both encouraging and inspiring.  You too should consider attending this event!  Click here or on the picture at the top of the page to locate a church or other organization that is hosting in your area.

Have you been reacting out of fear in this down economy?  Where do you place YOUR hope?  Tell me what would you ask Dave in this upcoming Town Hall For Hope.


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Personal Finance, Uncategorized ,