Packaging breakdown cover with car insurance is a common choice, but is it better to buy the two products separately or combine them?
If you run a car, one of the biggest concerns can be an expensive and stressful breakdown.
When you do buy your car insurance, it’s common to be given the option of adding breakdown cover at the same time, but is this really cost effective, or can you get a better deal by purchasing two separate products?
Some policies include breakdown cover as standard in the price of the policy, although these are in the minority.
On 12 March, 2015, Gocompare.com examined 228 policies from 157 providers listed on the matrix of independent researcher Defaqto and found that just 46 offered UK breakdown cover as standard.
Everyone likes a freebie, but bear in mind that including the cost of breakdown cover in the overall cost of the car insurance policy might well push up the price.
When you compare car insurance policies using Gocompare.com, you’ll be shown whether the quotes you get include breakdown cover or not, so it’s easy to see how much more expensive quotes including breakdown cover are.
As we also compare breakdown cover, a top tip is to look at these options as well before deciding whether you’ll be better off buying car insurance and breakdown cover separately, or as a combined product.
Although just 20% of the policies listed on Defaqto included UK breakdown cover as standard, 45% offered it as an optional extra.
Of the insurance providers offering breakdown cover at an additional cost, most offered several levels of cover at different prices and these prices varied widely between providers for similar levels of cover.
When you compare breakdown cover on Gocompare.com, you’ll find that policies cover up to five distinct elements:
Average standalone breakdown cover prices listed on Gocompare.com were 34-62% cheaper than average optional extra policies sold alongside car insurance
To compare levels of breakdown cover offered as an optional extra with car insurance, we analysed the prices available on Defaqto by breaking them down into the same five elements of cover and ranking them depending on whether they offer one, two, three, four or five of these elements.
We then grouped the breakdown cover options listed by Gocompare.com on 12 March, 2015, in the same way and calculated the average prices for each level of cover.
Depending on the level of cover, the average standalone breakdown cover prices listed on Gocompare.com were between 34% and 62% cheaper than the average optional extra policies sold alongside car insurance.
Although the research shows that breakdown cover sold alongside car insurance is more expensive on average than buying a comparable level of cover independently, could this be because a superior product is being offered?
Deeper analysis of the research did show one thing that could account for this price difference - 50% of the 48 car insurance policies included in the research offered optional breakdown cover by RAC or AA.
Many customers will be attracted by the perceived reliability of these two big brands which operate their own vehicle fleets, but in actual fact you could be getting a comparable service if you use other providers - see our article 'Should I consider a small breakdown company?' for more on this.
The AA and RAC weren’t included amongst the breakdown providers on Gocompare.com's panel, so to make comparing prices between standalone and insurance-packaged products fairer, we analysed these two providers’ prices on 12 March, 2015, and incorporated them into the average prices for the various levels of standalone breakdown cover.
This changed the result somewhat, showing that you might actually be able to find a better deal if you buy your breakdown cover alongside your insurance rather than separately if you favour these two brands.
If RAC and AA prices are included in this way, average prices for breakdown cover with two or five elements of cover were lower for breakdown cover purchased alongside insurance than when it’s bought separately.
What the research really highlights is that some types of customer might be able to find cheaper cover via their car insurance policy, while others may be able to get a better deal by buying the two products separately.
The table below gives the average prices for the five different levels of breakdown cover bought as standalone policies or as an add-on to car insurance policies.
This helps to determine what might be the cheapest way to buy, depending on whether you want only AA or RAC cover, or are happy with any provider.
|Breakdown cover policies included||Elements of breakdown cover included|
|Breakdown cover with insurance||£36.08||£56.53||£67.88||£78.00||£104.85|
|Breakdown cover prices from Gocompare.com, RAC and AA||£21.79||£68.23||£65.79||£59.57||£115.3|
|Breakdown cover prices from Gocompare.com||£20.01||£22.85||£25.64||£42.95||£69.33|
|Breakdown cover sold with insurance excluding RAC and AA||£35.78||£52.99||£67.66||£80.56||£100.47|
|Breakdown cover from RAC and AA only||£27.99||£86.39||£121.99||£150.99||£276.18|
|Breakdown cover sold with insurance including RAC and AA only||£36.27||£60.25||£67.90||£74.85||£110.49|
However, it’s important to remember that the research uses average prices and that there was a wide price variance from policy to policy for each level of breakdown cover researched.
Because of this, to get the right deal for you it’s a good idea to see just what your chosen car insurance provider offers, compare the standalone options, then decide.
Based on these average prices, the cheapest option for you really depends on what your priorities are so consider these scenarios...
The average prices are significantly lower for breakdown cover policies listed on Gocompare.com than for those sold alongside car insurance policies, even if insurance-packaged breakdown cover provided by RAC and AA is excluded from the research.
In many cases it can prove more expensive to buy breakdown cover with your insurance than as a standalone product
In fact, if you’re happy to use a smaller breakdown provider the research suggests that your breakdown cover could cost you 31-62% less - depending on the level of cover - if you buy it independently rather than alongside your car insurance.
However, as the research only takes into account average prices, it’s a good idea to check what kind of a deal your chosen car insurer is offering, compare breakdown cover prices separately, then decide if you can get a better deal by buying your breakdown cover with your car insurance or as a standalone product.
If you only want breakdown cover from the UK’s two most popular providers, you may well find you can get a better deal buying alongside your car insurance policy rather than separately.
When only car insurance policies that offered RAC or AA breakdown cover as an optional extra, were analysed, it transpired that average prices for all but the most basic roadside-only polices were lower when bought alongside car insurance.
Prices were particularly favourable for purchasing this way if you need comprehensive breakdown cover, with the average price of packaged breakdown cover being 60% lower than the average standalone price when it included all five elements.
Also, once again, the research deals with average prices, so just because it suggests you’d get a better deal through your car insurer, you might find that your chosen provider actually charges more for the cover than if you bought it direct from AA or RAC, so it’s always worth checking.
The average prices show that if you only want basic cover, you’re likely to find a cheaper deal by buying your breakdown cover separately from your car insurance, whether you want to stick to AA or RAC cover or whether you’re happy with any provider.
Of course, the prices vary widely so you should check what your chosen insurer is offering - the cheapest price for roadside-only breakdown cover sold with insurance was £25, while the most expensive was £46.99.
It’s highly likely you can find a better standalone deal for this level of cover though - of the breakdown cover-only policies we checked, the cheapest was £17.85 while the costliest was £27.
At the other end of the scale, the research shows that there are some good deals to be had on the most comprehensive level of breakdown cover if you buy it alongside your insurance, with the average price being 9% cheaper when purchased with insurance than when bought independently.
It’s not always the case, though, and again there’s a wide price variance - the most expensive cover offered as an add-on to insurance was £149.99 while the cheapest was just £61.50.
Also, if RAC and AA cover are excluded from the results, the average price for standalone cover is 31% cheaper, while for RAC and AA cover only, the average price is 60% cheaper when it’s sold with car insurance.
Once again, as the research deals with average prices, the best option for you will depend both on whether you’re fussy over your breakdown cover provider and on what your car insurer is offering.
If you do buy your breakdown cover with your car insurance, there are a few things to watch out for…
You shouldn’t simply assume you’re getting a bargain without checking and comparing the options first
When breakdown cover is packaged alongside car insurance, many people think it’ll be cheaper because there’s an assumption of a discount when products are sold together.
As we’ve seen, this can be the case, particularly with the AA and RAC, but in many cases it can prove more expensive to buy breakdown cover with your insurance than as a standalone product.
You shouldn’t simply assume you’re getting a bargain without checking and comparing the options first.
One of the main problems with buying your breakdown cover at the same point you purchase your car insurance is information - you usually don’t get to see the prices and levels of breakdown cover until you’ve got your car insurance quote.
What’s more, the key facts or terms and conditions of the breakdown cover will sometimes be accessed via a link - so it might be tempting to just select the extra cover without checking exactly what you’re buying or what might be excluded.
Gocompare.com’s Matt Oliver said: “Things to focus on would be the age of your vehicle and what excesses or limitations and exclusions may apply, how many claims you can make in a policy period - particularly if you have an old or unreliable car - and what level of recovery options you'll need as some offer local recovery home or to a garage within a specified radius.”
One other thing to look out for is European cover. It’s usually the most expensive level of cover so you might assume this option gives you comprehensive cover in the UK and while you’re abroad, but the terms and conditions could state that it’s actually only cover for driving in Europe, with no cover at all in the UK.
“When looking for a breakdown product - either as a standalone product or as part of a bundle of car insurance add-ons - consider what level of cover is best for your needs, whether that’s recovery, home start or European cover," said Oliver.
“Compare, if applicable, what the insurer is offering and also compare what standalone prices are available on a price comparison website.”
Breakdown cover sold with car insurance is typically 'vehicle cover', meaning it’ll only apply to the vehicle you’re buying the car insurance for.
Many people prefer to have personal cover, which applies no matter what vehicle they’re driving.
Consider what type of cover you need carefully and - if you do want personal cover - check if it's something your insurer offers or consider whether you might get a better deal buying it as a standalone product.