Even though the market isn't completely still, it's hard to sell new cars in the UK these days. To deal with this problem, car companies in the UK have found that giving free car insurance for the first year with the purchase of a new car is a very effective way to get more people to buy cars.
Great, but before you run out and buy that new car, think about these things:
li> If you are under 25, your first year of car insurance will be "free," meaning that the car company will pay for it as a way to sell you a car. However, the following years won't be free. So, before you buy that brand-new SUV, 4x4, or sports car, you might want to ask what the insurance will cost after the first year. If you don't, you might find that the nicest-looking car in your neighbourhood is sitting in someone else's driveway.
li>If you want to buy a car through one of the manufacturers' hire-purchase payment plans, read the fine print to see if you have to use the same car insurance company for the whole hire-purchase period. If so, you might want to think twice about buying your new car this way, since it's likely you can find cheaper car insurance somewhere else.
Remember that even if you're a great driver and don't have any accidents or need the car insurance company's help, it won't change the price of your insurance for year 2. This is because you won't get any "no claims bonus" for that time period.
li>If you decide to go through with the deal, check carefully to see what isn't covered by the car insurance. In most cases, the first year's car insurance is pretty basic and won't cover you for a number of things you might have assumed it would.
There's no doubt that offering a year's free car insurance as a marketing tool has been very successful. However, if you have the chance to try and negotiate some free extras or upgrades with your new car, you may want to go for the free extras or upgrades instead of the free car insurance. This is because the free car insurance you get from your car salesman will be anything but "free" in the long run.
