Drive down car insurance one year on

As drivers rub their hands in anticipation of the introduction of 08 number plates, those who bought a new car in March 2007 could be in for a nasty shock as their car insurance renewal forms arrive.

Perhaps the car salesman enticed you with a year’s free insurance, or perhaps you just shopped around for the best deal? Either way, it’s highly unlikely that your existing car insurance deal will offer the same value for money one year on.

So what options are available to you now? And how can you find the best car insurance deals?

The need to shop around for car insurance

You may think that your existing car insurance provider’s renewal quote isn’t that bad and indeed if you’ve been happy with its service over the previous 12 months there’s a strong argument for sticking with what you know.

However, you should not fall into the trap of assuming that because your car insurer offered a great deal 12 months ago, it is still the market leader.

Research by a price comparison website has shown that the lowest average car insurance premiums rose by 4.5 per cent in the second half of last year. With the credit crunch driving up financial costs across the board, inflation on your premiums could be even steeper than expected.

It’s also wrong to assume there are only a handful of providers that can offer cheap car insurance. The industry is far from monopolised and there are more than 60 car insurance companies that could potentially offer the cheapest deal dependent on your circumstances.

Why it’s best to be a new car insurance customer

Just as your existing provider probably enticed you to sign up for a car insurance deal with an introductory offer, it’s no secret that the best car insurance deals are almost always available to ‘new customers’.

There are a host of attractive deals on the market to attract new custom. The likes of Norwich Union and the Post Office both offer cashback deals, while Direct Line and Halifax are among a host of providers offering online discounts to new customers.

The only significant discount that does present a reason to stick with your current provider is a no-claims bonus. If you’ve built up a year without making a claim an insurer may reward you with a reduced premium or a month’s free insurance. However, don’t assume that this will make them the cheapest. Indeed most insurance companies recognise no-claims bonuses that were built with other insurers.

How to find cheap car insurance

Once you’ve made the decision to look elsewhere for your car insurance, you should save both time and money by using a price comparison website.

Previously, searching for car insurance quotes was a laborious task as it meant approaching insurers directly or dealing with brokers that would take excessive commission to boost their margins. However, there are now a host of online car insurance comparison tools which remove the hassle of shopping around and won’t hurt your wallet.

Car insurance comparison tools earn money from providers for putting business their way – but there is no extra charge for the consumer. The prices quoted to you through a comparison tool will be the same as on the provider’s own website but you have the advantage of comparing them to a host of other deals on the market.

There are even some cases where comparison tools offer cheaper deals than you would receive by approaching the providers directly – such is the competition in the market that insurers will actually offer cheaper deals to appear higher in the ‘best buy’ listings.

Other steps to reduce your car insurance costs

Of course if you received a year’s free car insurance when you took out your new car it’s inevitable that you’re going to be paying more this time around – and no matter how cheap the quote you receive may be, it will hurt to deal with monthly payments.

Consequently you should consider other aspects that could drive down your car insurance premiums. Look at enhancing the security of your vehicle with alarms and immobilisers for example, to reduce the risk of theft. Also ensure you park your car in a garage overnight, or at least in a well-lit area.

In addition, consider taking on a higher excess – but only at a level you could comfortably afford should an accident occur.

Car insurance companies consider where you live, the car you drive and your own driving record when determining your premiums – so do all you can to drive safely and stay accident free to prove you deserve cheap car insurance.