Affordable car insurance: strategies for lower premiums 2025
04.06.25
7
Minutes
Katrin Straub
Managing Director at nextsure
Car insurance costs are rising, but with the right knowledge you can save significantly. Discover tried-and-tested tips and expert advice to keep your car insurance premium low while still enjoying optimal cover. This guide shows you how.
The topic in brief and concise terms
An annual payment method and realistic mileage information can reduce your insurance premium by up to fifteen percent.
Comparing providers and adjusting comprehensive cover and excess can often save several hundred euros.
The no-claims bonus class, vehicle class and regional class are key factors that significantly influence your car insurance premium and can be optimised.
Quick facts: Immediate steps for affordable car insurance
To keep your car insurance premium as low as possible, even small adjustments can have a big impact. Paying annually can save you up to five per cent. It is also worth checking your annual mileage; motorists often pay for kilometres estimated too high. Reducing this from 20,000 to 15,000 kilometres can noticeably lower the premium. Choosing a policy with a repair-shop clause can reduce the premium by up to twelve per cent.
Many policyholders underestimate the savings potential of adjusting the group of drivers. Keep the number of drivers to a minimum to reduce costs. Agreeing to an excess, for example one hundred and fifty euros in partial cover and three hundred euros in comprehensive cover, also has a positive effect on the premium. These first steps can be implemented quickly and form the basis for further optimisations.
Practical guide: Actively reducing premiums through tariff and vehicle selection
The choice of the right tariff and vehicle has a significant impact on how affordable your car insurance is. Compare offers from different insurers, as the price differences can amount to several hundred euros per year. Switching from fully comprehensive cover to third-party, fire and theft can be worthwhile for older vehicles, for example from the age of five, as fully comprehensive cover often only reimburses the current market value. When buying a car, look for a low type class; vehicles in low type classes (e.g. type class 10 for third-party liability) are often cheaper to insure.
Annual mileage is another important factor. Calculate realistically; reducing it by five thousand kilometres can already mean savings of ten to fifteen per cent. Consider whether a telematics tariff is suitable for you. Your driving behaviour is analysed, and safe driving can be rewarded with discounts of up to thirty per cent. Do not underestimate the influence of the registration district, known as region class. Moving to a district with a better claims record can reduce your premium. The following points will help you optimise your tariff:
Choose annual payment instead of monthly or quarterly (saving up to five per cent).
Adjust the excess (e.g. three hundred euros in fully comprehensive cover instead of one hundred and fifty euros).
Restrict the group of drivers (each additional driver can increase the premium by five to ten per cent).
Accept a repair-shop commitment (up to twelve per cent discount possible).
State annual mileage realistically and adjust it if necessary (five thousand kilometres less can bring ten per cent savings).
Check telematics tariffs (up to thirty per cent discount for safe driving).
These practical approaches enable you to make your car insurance affordable without sacrificing the cover you need. The next step is to make the most of your no-claims bonus.
Optimising your no-claims bonus: save in the long term
Your no-claims bonus class (SF class) is one of the most important levers for affordable car insurance. Every claim-free year leads to a better rating and therefore a higher discount. New drivers often start in SF class 0, which is associated with high premiums; after one claim-free year, they are usually placed in SF class 1/2 or 1. After thirty-five claim-free years, many policyholders reach the highest SF class (e.g. SF 35), which can reduce the premium rate to around twenty percent of the base tariff.
There are ways to positively influence the SF class. Transferring the SF class from another person (e.g. parents or grandparents) is possible under certain conditions, but often only for as many years as the recipient has held a driving licence. No-claims bonus protection can be worthwhile: it prevents a downgrade after the first claim, but costs extra. Paying for minor damage yourself, up to around five hundred euros, can be cheaper in the long term than a downgrade in the SF class. Keep these aspects of the SF class in mind:
Check the possibility of transferring an SF class, especially for new drivers.
Consider no-claims bonus protection if you have had many claim-free years (often from SF class 4 onwards).
For minor damage, calculate whether paying yourself is cheaper than making a claim and then being downgraded.
Report changes to your driving situation (e.g. fewer drivers) so that your rating may improve.
The SF class is a dynamic factor that has a major influence on your premium. Next, we look at the legal basis and expert tips.
Expert knowledge: Understanding legal aspects and contract details
To make your car insurance affordable and legally compliant, it is important to understand the legal framework. The Compulsory Insurance Act (PflVG) stipulates in Section 1 that motor vehicle liability insurance is mandatory for every vehicle owner. The minimum coverage sums are set out in Section 4 PflVG, for example EUR 7.5 million for personal injury. A breach of the insurance obligation can, in accordance with Section 6 PflVG, be punished with fines of up to 180 daily rates or imprisonment of up to one year.
The Insurance Contract Act (VVG) regulates the rights and obligations of insurer and policyholder. Particularly relevant for saving costs is Section 40 VVG: if the insurer increases the premium without a corresponding improvement in the scope of cover, you have a special right of termination with one month’s notice. Please note the pre-contractual duty of disclosure under Section 19 VVG: incorrect or incomplete information can result in the insurer being released from liability or in a contract adjustment. Our expert tip: review your insurance policy annually for potential optimisation, especially before the main renewal date (usually 1 January). A switch is often possible until 30 November. Malfunction, damage or destruction of electronic components in your vehicle are covered by car insurance for electric cars. Claims should be settled within four to six weeks. This knowledge will help you avoid pitfalls and optimise your car insurance.
Further savings potential: From type class to payment method
In addition to the factors already mentioned, there are other levers for reducing the cost of your car insurance. The type class of your vehicle plays a decisive role. It reflects the claims and accident record of a particular car model. Models with a low type class (e.g. 10-15 for third-party liability) are usually cheaper to insure than vehicles with a high type class (e.g. above 20). Information on the type class of your preferred vehicle can be found online at the German Insurance Association (GDV).
The regional class, which reflects the claims record of your registration district, also affects the premium. In rural areas with fewer accidents, premiums are often lower than in large cities. The GDV publishes the current regional classes for all 413 registration districts every year. Another point is the choice of parking space: a car parked in a garage at night is often cheaper to insure than one parked on the street, as the risk of theft and vandalism is lower; discounts of up to five per cent are possible here. Our expert tip: use comparison portals to get an initial overview of the market, but also obtain direct quotes from insurers to find the cheapest car insurance for you. Bear in mind that the lowest price is not always the best choice; the level of cover must be right. An annual review of your insurance costs is recommended.
Insurance switching and special termination rights: making the most of opportunities
Changing your car insurance can offer significant savings potential, often several hundred euros per year. The most common cancellation date is 30 November, as most policies expire at the end of the year. However, there are also situations that allow a special right of cancellation outside this deadline. These include a premium increase by the insurer without any improvement in the benefits (§ 40 VVG). Even after a settled claim, both you and the insurer have the right to cancel the contract within one month.
Another option for special cancellation exists when changing vehicles. If you buy and register a new car, you can cancel your existing policy and take out a new, potentially cheaper car insurance policy. Our expert tip: compare not only prices, but also benefits such as cover limits, no-claims discount protection or overseas claims protection. A careful review of the contract terms is essential to ensure you are well covered in the event of a claim. nextsure will be happy to support you in analysing your existing policies and finding an optimal and affordable car insurance policy.
The following situations often allow cancellation outside the regular deadline:
Premium increase without adjustment to the cover (within one month of receiving the notice).
After completion of the claims settlement process (within one month).
Sale or deregistration of the vehicle (the policy transfers to the purchaser or ends upon deregistration).
Change to the type class or regional class if this leads to a premium increase.
Use these options to keep your car insurance affordable. Personal advice can be very helpful here.
Finding and keeping affordable car insurance requires a combination of knowledge, regular review and deliberate decisions. Start with simple adjustments such as paying annually and making a realistic assessment of your mileage, which can already save you up to fifteen per cent. Use comparison calculators and check tariff details such as approved repair shops and excess, to save a further ten to twenty per cent. Optimising your no-claims bonus through claim-free driving or the transfer of a no-claims class can reduce your premium by more than fifty per cent in the long term.
Understand the significance of vehicle type and regional classes and, where relevant, take these factors into account when buying a car or moving house. Above all, stay proactive: review your policy annually, make use of your special right to cancel if premiums increase, and do not hesitate to compare offers. Careful selection will secure not only affordable car insurance, but also the right cover for your needs. Remember that nextsure offers you comprehensive advice and helps you find the optimal insurance solution.
Request your individual risk analysis now: Have your insurance situation checked free of charge and receive specific suggestions for optimisation.
More useful links
Federal Motor Transport Authority offers detailed statistics on vehicle stock in Germany.
Federal Statistical Office provides comprehensive information on road traffic accidents in Germany.
German Insurance Association explains the significance and calculation of type classes for motor insurance.
German Insurance Association shows the current regional classes for motor insurance, broken down by federal states.
Deutsche Bundesbank publishes statistics on national producer and consumer prices.
FAQ
What does the term "cheap car insurance" mean in detail?
Affordable car insurance means paying the lowest possible premium while still getting cover that is tailored to your needs and sufficient. It is not just about the price, but about the best possible value for money, achieved through comparing rates, adjusting policy features and taking advantage of discounts.
How often should I review my car insurance to keep it affordable?
It is advisable to review your car insurance at least once a year, ideally a few weeks before the main renewal date (often 1 January, with the cancellation deadline usually 30 November). It is also worth reviewing it whenever your personal circumstances change (e.g. moving house, a new car, fewer miles driven).
What documents do I need for a car insurance comparison?
For an accurate comparison, you will usually need your vehicle registration certificate (registration certificate Part I) with details of the manufacturer (HSN) and type code number (TSN), your current insurance policy (to determine the no-claims bonus class), details of the annual mileage, the driver group and the parking location of the vehicle.
Is the cheapest car insurance always the best choice?
Not necessarily. The cheapest car insurance can have restrictions on cover that may become costly in the event of a claim (e.g. low cover limits, no free choice of workshop, exclusion of gross negligence). Pay attention to a balanced relationship between price and cover that meets your individual needs. A fully comprehensive insurance policy is often a sensible option for new cars, for example.
Can I lose my no-claims bonus?
Yes, following an at-fault accident, you will usually be moved to a lower no-claims bonus class, which leads to higher premiums. The exact downgrade depends on the insurer and the number of claims. A no-claims protection option can prevent a downgrade after the first claim, but it comes at an extra cost.
What is the difference between type class and regional class?
The type class assesses the claim risk of a specific vehicle model (e.g. VW Golf). The regional class assesses the claim risk in your registration district (e.g. Berlin vs a rural region). Both classes influence the amount of your insurance premium. Lower classes generally mean lower premiums. The premium rate is also determined by these factors.
