Car Insurance Premiums Continue To Rise

Hard-pressed car owners already reeling from a significant increase in fuel prices this year have been dealt another blow with the news that it may now be more difficult than ever to find a cheap car insurance premium.

The cost of insurance is adding to the burden already felt by motorists with the AA British Insurance Premium Index, which has been tracking premiums since 1994, revealing that in the three months up to June 2008, the average car insurance premium has increased by £20 to now stand at more than £700.

Young drivers in particular have been hit hard, as more than £45 has been added to the average young person’s insurance quote, which now stands at a whopping £884. This is mainly due to the fact that young drivers have a high accident rate and statistically are more likely to make a claim.

So how can drivers find more affordable premiums now?

Tips to drive your car insurance down

There are many ways to tackle car insurance but the most important is to shop around every year and not just accept renewal quotes. According to Tesco Finance, 68 per cent of motorists could save cash by moving to a different provider yet only 32 per cent have moved to a new deal within the last year.

The Association of British Insurers estimates that drivers can save around 35 per cent on premiums by comparing as little as five car insurance quotes. This needn’t be a hassle - you don’t need to trawl around the high street from insurer to insurer or deal with representatives on the phone. Instead simply use a comparison website, which will compare quotes independently. The leading comparison websites in the UK can compare as many as 70 car insurance providers in one search helping you to get a thorough overview of the market.

Even if you don’t use a comparison website, do ensure that you shop online. Most car insurers offer their cheapest premiums online due to the savings that can be made through reduced overheads and you could secure a discount in the region of 10-15 per cent.

Opting to pay a higher excess can drive your insurance down as this will prevent insurers from having to pay out in the event of small claims. However, you should think carefully about the level of excess you can afford. Remember you will have to pay this amount of money should an accident occur before the insurer offers a pay out of its own.

If you’re a female driver it’s worth taking a look at the specialist policies available from female insurers such as Sheila’s Wheels, Diamond and Ladybird. Studies from comparison websites show that these ‘female friendly’ insurers do not always offer the cheapest quotes for females, but they do offer a number of specialist options including handbag cover and priority roadside assistance which might make them worthwhile.

How can young drivers find affordable car insurance?

Young motorists should think about the type of cover they need before they buy their insurance. If you drive a car that is perhaps worth less than £1,000 then consider whether you really need comprehensive cover. A fully comprehensive policy on a vehicle with a low value could see you spend more on your first year’s premiums than you do on the car itself.

Of course, car insurance is a legal necessity so you can’t go without it - however, you may find a better deal if you opt for third party, fire and theft cover albeit this won’t offer the same level of cover as a fully comprehensive policy.

Consider taking a Pass Plus course, which some insurers estimate could save drivers around 35 per cent in their first year. The Pass Plus will cost upwards of £100 though so it’s worth contacting your insurer first to establish what savings you could make before taking the course.

Most young drivers are punished for the poor driving record of their peers, so it’s important to prove that you’re reliable behind the wheel. If you can stay accident and conviction free you can amass a no-claims discount which could slash your premiums – many insurers offer rapid bonus schemes to young drivers allowing them to earn a full year’s no claims discount in around nine months.

From there, make sure you follow the standard rules to find cheap car insurance - shop around for quotes, don’t modify your vehicle, add car alarms and immobilisers, park in a garage overnight and agree to a mileage discount if it’s suitable.