Car Finance GB

The law in Britain currently states that all motorists are required to be sufficiently insured so that they can meet their legal liabilities should they cause injury to another person or cause damage to another person’s property, and so car insurance is compulsory for all drivers. Anyone caught driving on UK roads without adequate motor insurance is in fact breaking the law and may face an IN10 conviction which could lead to a driving ban, a possible 6 penalty points added to their license and a fine of a minimum £180. There have been some cases where people have been jailed for driving without motor insurance. Anyone thinking of driving without insurance should bear in mind that the consequences could be more damaging (both financially and otherwise) than the relatively low cost of insurance.

Although many insurance companies offer different products for different drivers, motor insurance generally falls into three main categories, or rather three main types of policy. These are Third Party Only (TPO), Third Party Fire & Theft (TPFT) and Comprehensive (also known as Fully Comprehensive, or Fully Comp). Each policy ranges in what they cover the policy holder for and hence the cost of each policy also varies.

Third Party Only policies are the most basic type of cover and hence usually the cheapest type of policy. These will cover the policy holder against any damage caused to a third party’s property or to the third party themselves. It does not cover the policy holder for any damage to their own vehicle or any injury to themselves. As its name suggests, it covers third party damage and injury only. As it is relatively cheap, this type of policy is often taken out by young or first time drivers or by those that drive vehicle that are not very expensive. If your car is in immaculate condition, fairly new or worth a lot of money then Third Party Only policies are probably not for you.

The next step up from Third Party Only policies, and hence usually slightly more expensive, are Third Party Fire & Theft policies. This policy is still fairly basic in what it covers the policy holder for, it is near enough identical to a TPO policy but with the exception that this policy will also pay out in the event of your vehicle being stolen or set on fire. But again, in the case of an accident the policy will only pay out to cover damage caused to a third party’s property or injury to the third party. As with TPO policies, your own vehicle and your own injuries will not be covered. Again, this type of policy is usually taken out by those who drive less expensive cars.

Last but not least is Comprehensive car insurance. Comprehensive, or Fully Comp, is the most common type of car insurance policy and is considered the most ‘complete’ type of policy as it covers you against more events than either TPO or TPFT. Hence it is also (usually) the most expensive type but if you are driving a more expensive car then it is definitely worth thinking about. Comprehensive insurance offers the same cover as TPFT but will also pay for any damages to you or your vehicle regardless of who was to blame for the accident. Many people find its worth paying that little bit extra for Fully Comp insurance as it does provide peace of mind for the policy holder.

The cost of car insurance varies depending in several factors such as your age, what car you are driving, where you live, among others. Young drivers often end up paying more for their car insurance compared to older, more experienced drivers; people who drive fast, powerful cars will pay more for insurance than those driving cars with smaller, less powerful engines. Likewise people driving in busy town centres will probably pay more than those living in rural areas. There are things you can do to lower the cost of insurance such as fitting safety devices for example, immobilisers, alarms or air bags (although these tend to come as standard with most cars). However whatever the cost of motor insurance, bear in mind the cost of driving without adequate motor insurance can be far greater.