Consumer Corner: Keeping motoring-related bills down

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Car insurance companies hit the headlines recently when it was revealed that there have been big increases in the price we are paying for cover. This is despite the costs for these insurance companies in settling claims having dropped. The Alliance for Insurance Reform said that the price motorists are paying for their insurance is soaring. This is on the back of price increases in just about every other aspect of our lives. 

Running a car is not cheap, but there are ways we can ease the financial burden by considering things like penalty points, car maintenance, and biting the bullet and taking a driving test.

Penalty points and trying to avoid them is something to seriously consider when trying to cut the cost of running a car.

Billy Shannon of Aviva Insurance Ireland said they include penalty points as a consideration for both acceptance criteria and premium calculation.

“We reward our customers by providing discounts on their motor insurance policy if they do not have more than three active penalty points on their licence.” The good news is that according to the Central Statistics Office (CSO) and the Road Safety Authority (RSA), 79% of all drivers do not have more than three active penalty points on their licence.

However, Insuremycars.ie’s Managing Director Jonathan Hehir, says that drivers could knock hundreds of euro a year or as much as a third of the price off their car insurance bill by keeping their driving licence penalty point free.

“Many drivers don’t realise how easy it could be to clock up three penalty points on their licence,” he said.

For example, you could get three penalty points for driving a car without a valid National Car Test (NCT), for failing to obey traffic lights or for failing to give right of way at a yield sign. Something as simple as failure to display a ‘L’ or ‘N’ plate if you’re a learner or novice driver will get you two penalty points and after that, all you need is one other penalty point to have three on your licence.

“Penalty points or driving convictions can also make it harder to get a quote. A driver who clocks up 12 penalty points within a three-year period will be automatically disqualified from driving,” said Mr Hehir.

Recent figures show there’s been a big increase in the number of penalty points being issued with 9% more penalty points issued in 2021 than in 2020.

In addition to this motorists are also paying the price for people who fail to get insured. Roughly one in every 13 drivers is uninsured and insured motorists pay for the claims of these uninsured drivers through a levy on their insurance which equates to roughly €35.

“It is worth noting that attitudes towards insurance cover also have a role to play in driving behaviours with uninsured drivers having an impact on the cost of motor insurance, resulting in insured motorists paying for the claims of the uninsured drivers through a levy on their insurance costs. A reduction in uninsured driving through increased detection and stronger penalties would reduce the cost of insurance for the insured motorists,” said Mr Shannon.

The condition of your car too can impact your insurance and it is important to have a current and valid NCT certificate. If a policy holder does not have an NCT this could impact with a claim being unsuccessful. Currently there are delays with NCTs and insurance companies do point out that they recognise this if the driver shows they have an NCT test booked.

Mr Hehir also said that drivers could save €500 a year on their car insurance if they pass their test and move from a provisional licence to a full licence.

While there was a welcome increase in the number of driving tests conducted in 2021 when compared to 2020, the impact of the pandemic on driving tests is still evident in the latest CSO Traffic Omnibus report with 142,320 driving tests conducted in 2021, 44,059 less than were conducted in 2019.

“The driving test backlogs unfortunately continue today with recent figures showing that there are currently over 50,000 learner drivers eligible to sit their test but who are either waiting for test slots or who have just received an invitation to book one. So through no fault of their own, many drivers are paying over the odds for their insurance because they have to wait months for a driving test,” said Mr Hehir.

The CSO report also shows that the gender divide is still alive and well when it comes to driving tests with 8,076 more men than women sitting the test in 2021 and 6,666 more men than women getting a full driving licence in 2021 after passing their test.

“Thousands of young Irish women are losing out on the chance to knock €500 off their annual motor insurance because they are not as likely to sit and pass their driving test as their male counterparts despite women having a safer track record on Irish roads than men,” he added.