Modified Car Insurance

Modified cars and how to reduce your premiums

Many drivers assume that if they own a modified car they will have to pay high premiums on their car insurance. However, by following a few simple steps they can reduce their premiums significantly.

Here we look at how to reduce insurance premiums for a modified car.

Do you have to pay more for car modifications?

As a general rule you will pay more on insurance if you're modifying your car because it usually costs insurers more to repair/replace these parts in the event of an accident or write-off. Just as the value of the vehicle will usually increase by modifying the car, insurance premiums generally follow suit.

However, the level of the increase is dependent on the modifications you're applying to your car.
To illustrate the point, we compared quotes for a 27-year-old male driver from Stockport with a 2005 Toyota Yaris - he has five years' no-claims and agreed to a £250 excess. Without modifications, his cheapest quote was for £311.58 a year for comprehensive car insurance.

If the same driver then added non-standard alloy wheels to his vehicle, his cheapest quote would increase to £374.31 - an increase of more than £60. However, by adding flared wheel arches the cheapest quote available was for £430.62 - an increase of nearly £120 compared to the original quote.

What's important to note however, is that the cheapest quote following this modification came from a specialist modified car insurer (the cheapest from a conventional insurer was £522.08 a year) - and these companies may hold the key to you receiving a deal that offers value for money.*

What advantages can specialist insurers offer?

Many specialist insurers claim that they can offer more affordable deals to modified car drivers because they perceive these drivers as the most enthusiastic about their vehicles and therefore more likely to take care of them. Some of the leading specialist modified car insurers in the UK include Flux Direct and Performance Direct.

These insurers may also offer a number of additional cover options that you might not find elsewhere, such as:
  • Advanced driving course discounts: You may be able to earn money off your premiums if you complete an advanced driving course such as the IAM qualification.
  • Agreed valuations: Several modified car insurers offer agreed valuations so you know from the outset what your vehicle is worth in the event that it were stolen or written off. You should check however, to ensure that this valuation is guaranteed.
  • Limited mileage discounts: Some modified cars are used as secondary vehicles within a household and aren't used for daily commuting. If that is the case then you may be able to agree to a mileage limit with your insurer in return for a reduction in your premiums.
  • Use of the vehicle: If you do only use your modified car as a run around and not for commuting ensure your insurance company is aware of this as this can reduce your premiums.
  • Owners' club discounts: Members of owners' and manufacturers' clubs are often viewed as the most likely to take care of their vehicle and may be rewarded with significant discounts.
  • Track/race day cover: If you plan to race your modified car or enter it into an event such as a rally or hill climb, then you may be able to get protection for these events from a specialist insurance company.

However, despite the numerous incentives you should not automatically assume that specialist insurers will offer you the cheapest deal. Instead, use a comparison website to compare the deals available from specialists and conventional insurers - then you can weigh up both the premiums and levels of cover available to ensure you're getting value for money.

Are there other ways to reduce car insurance premiums?

Car insurance companies base their premiums on risk - i.e. an assessment of how likely you are to make a claim. This takes into account factors such as your claims history; the vehicle you drive; your annual mileage; your address; and your personal circumstances. Reducing your perceived risk will help to lower premiums - here are some tips:

  • Add security: Consult your insurer about the discount it offers for fitting various security devices such as alarms, immobilisers and trackers. Generally, Thatcham-approved devices earn the most significant savings.
  • Avoid convictions: Prove that you are a good driver by avoiding motoring convictions - two or more speeding offences can increase premiums by as much as 74 per cent with some car insurers.
  • Increase your excess: The excess is your contribution towards a claim and is usually split into a compulsory excess set by the insurer and a voluntary excess, which is an additional amount you agree to pay should a claim be necessary. By increasing your voluntary excess you may lower premiums - although it should be kept at an affordable level.
  • No-claims discounts: Look to see if your insurer offers a no-claims discount - you could potentially earn as much as 60 per cent off your premiums by avoiding claims for four or more years.
  • Park safely: Make life difficult for prying thieves and vandals by keeping your car in a locked garage overnight and you may earn a reduction on your premiums.
  • Pay annually: By paying premiums upfront you could avoid monthly interest charges.
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*All quotes correct as of January 19, 2010